An informal arrangement is just what it sounds like – a non-legally binding debt repayment agreement with your creditors that isn’t administered through the court.
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For this you have to negotiate with your creditors personally or get the help of a debt counsellor to do so on your behalf.
The disadvantage of this approach is that it can be difficult to reach an agreement that is suitable for you and also you don’t have the law to protect you and the agreement.
In other words, the creditors could change their mind at any time as the agreement is not legally binding, and you could be subject to less preferable terms or court action.
