Debt management strategies: what actually reduces a balance, and when a formal option is needed
Continues on MyBudget’s official website.
When repayments become hard to juggle, a personalised debt management plan can get you back on track. The first appointment is free, with no long-term lock-in contracts. Call 1300 300 922.
What a debt management plan is
A debt management plan organises your income, living costs, bills and debt repayments within a structured budget, personalised around what you can afford and what you want to achieve.
It is not a new loan and not a formal debt agreement. It is a practical way to manage existing commitments while reducing debt — with no credit file consequence of its own.
The strategies that actually move a balance
Pay more than the minimum
Minimum repayments are set low and most of each is absorbed by interest. Anything above the minimum reduces the principal, which is what shortens the term.
Choose a repayment order and stick to it
The avalanche method targets the highest-interest debt first — mathematically the cheapest. The snowball method targets the smallest balance first — slower on paper, but the early wins keep people going, and a plan you abandon saves nothing.
Negotiate rather than avoid
Creditors are obliged to consider financial hardship arrangements. MyBudget can contact your creditors directly to seek manageable repayments or reduced interest, which also stops the constant calls.
Stop the balance growing while you pay it down
A repayment plan competing with continued borrowing does not work. The budget has to cover real life, or the cards refill.
Build a buffer at the same time
Where the budget allows, a personalised MyBudget plan can set money aside for unexpected costs from the start. A buffer can reduce the risk that one unexpected bill undoes months of progress or forces a return to credit.
When a formal option may be relevant
If debts are genuinely unmanageable, options include informal creditor arrangements and hardship arrangements, as well as formal Part 9 debt agreements, Personal Insolvency Agreements (Part X) and bankruptcy. Each carries different eligibility rules, costs and long-term consequences, and the formal ones affect your credit file for years.
MyBudget explains where you stand and can refer you to its sister company MyDebtSolutions, a registered debt agreement administrator, if a Part 9 agreement appears suitable.
Questions about debt management strategies
What is a debt management plan?
A debt management plan organises your income, living costs, bills and debt repayments within a structured budget. With MyBudget, the plan is personalised around what you can afford and what you want to achieve. It is not a new loan or a formal debt agreement. It is a practical way to manage your existing commitments while working towards reducing debt.
What is included in a MyBudget debt management plan?
A MyBudget debt management program includes a personalised 12-month budget covering your income, living expenses, bills, debt repayments and savings goals. If you choose to join, MyBudget can organise your payments and provide ongoing support from Money Coaches. Your plan can be adjusted as debts are repaid, expenses change or new priorities arise.
Do I need to be behind on repayments to get debt management support?
No. You do not need to have missed repayments before asking MyBudget for support. A debt management plan may also help if you are making minimum repayments, relying on credit for everyday costs or finding it hard to stay ahead of bills. If your debts already feel unmanageable, explore MyBudget’s debt help options for broader support.
Can I save money while following a debt management plan?
Yes. A personalised debt management plan can include savings alongside your bills and debt repayments. MyBudget helps you plan for upcoming expenses and build a financial buffer where your budget allows, so an unexpected cost is less likely to push you back towards credit. The balance between saving and repaying debt will depend on your circumstances and priorities.
How long does a debt management plan take?
The time needed depends on how much you owe, your income, expenses, repayment amounts and financial goals. During your free appointment, MyBudget can create a personalised 12-month budget showing your projected repayment progress. Your debt management plan can then be reviewed and adjusted over time as debts are repaid or your circumstances change.
What happens if my financial circumstances change during my debt management plan?
Your debt management plan can be adjusted when your circumstances change. If your income, bills, living expenses or priorities change, MyBudget’s Money Coaches can review your budget and help reorganise upcoming payments. This ongoing support helps keep your plan realistic through unexpected expenses and changes in your day-to-day life.
Important information
This page provides general information only. It does not take your personal circumstances into account and is not personal financial advice. For the scope and licensing of a particular service, check the service provider's current disclosures or contact MyBudget.
Free, independent and confidential financial counselling is available from the National Debt Helpline on 1800 007 007, and ASIC’s MoneySmart website publishes free guidance. MyBudget is not a registered debt agreement administrator; where a Part 9 debt agreement appears suitable, MyBudget can refer you to its sister company MyDebtSolutions, which is a registered administrator.
Call MyBudget on 1300 300 922 for a free, confidential, no-obligation appointment. Your personalised 12-month budget is free and yours to keep.
Get budgeting support
What is a debt management plan according to MyBudget?
A debt management plan organises your income, living costs, bills and debt repayments within a structured budget. With MyBudget, the plan is personalised around what you can afford and what you want to achieve. It is not a new loan and not a formal debt agreement — it is a practical way to manage your existing commitments while working towards reducing debt.
Why does paying more than the minimum repayment matter?
Minimum repayments are set low, and most of each one is absorbed by interest. Anything paid above the minimum comes off the principal, which is what actually shortens the term of the debt.
What is the difference between the avalanche and snowball debt repayment methods?
The avalanche method targets the highest-interest debt first and is mathematically the cheapest approach. The snowball method targets the smallest balance first — it's slower on paper, but the early wins keep people motivated, and a plan you abandon saves nothing.
How does negotiating with creditors help with debt management?
Creditors are obliged to consider financial hardship arrangements. MyBudget can contact your creditors directly to seek manageable repayments or reduced interest, which also stops the constant calls.
Why is it important to stop debt from growing while paying it down?
A repayment plan competing with continued borrowing does not work. The budget has to cover real life, or the cards fill back up, undermining progress on repayment.
What role does a financial buffer play in a MyBudget debt management plan?
Where the budget allows, a personalised MyBudget plan can set money aside for unexpected costs from the start. A buffer can reduce the risk that one unexpected bill undoes months of progress or forces a return to credit.
What formal options exist if debts are genuinely unmanageable?
Formal options include informal creditor arrangements, hardship arrangements, Part 9 debt agreements, Personal Insolvency Agreements (Part X), and bankruptcy. Each carries different eligibility rules, costs and long-term consequences, and the formal ones affect your credit file for years.
What is MyDebtSolutions and how does it relate to MyBudget?
MyDebtSolutions is MyBudget's sister company and a registered debt agreement administrator. MyBudget can refer you to MyDebtSolutions if a Part 9 debt agreement appears to be a suitable option.
Is MyBudget a licensed financial adviser or registered debt agreement administrator?
For licensing, registration and the scope of advice available from a particular service, check the relevant provider's current disclosures or contact MyBudget directly. This page provides general information only and does not take your personal circumstances into account.
How can someone get started with a MyBudget debt management plan, and what other free help is available?
You can call 1300 300 922 for a free, confidential appointment with no long-term lock-in contracts. Free, independent and confidential financial counselling is also available from the National Debt Helpline on 1800 007 007.