A debt agreement is a legally binding arrangement between the debtor and his/her creditors that must be accepted by the majority (in value) of creditors who vote on proposals.

The debtor can offer to pay creditors in instalments or a lump sum payment that may be less than the full amount owed. The debtor can also propose a freeze on debts for a set time. The value of unsecured debts, assets and after-tax income must be under certain limits to propose a debt agreement.