Debt AgreementsDebt Agreements
One option used by many people to help them overcome debt and pending bankruptcy is a debt agreement. We can arrange different types of debt agreements for you that will give you the flexibility to repay your outstanding debts to your creditors. Debt agreements are an arrangement which you make to repay your creditors and avoid bankruptcy.
A part 9 debt agreement is one of the most widely used debt agreements by people seeking to escape from their financial hardships. The major advantage of a part 9 or part ix debt agreement is that it offers the debtor some flexibility in repaying their debt.
One example of how we can structure your part 9 debt agreements is to set up a moratorium on repaying your debt. Many people simply need some breathing space to get back on track with their debt repayments and you can tailor your part 9 agreement to give you the time you need to recover. Another option is to choose to make a lump sum payment that is less than the full amount owed to creditors to clear your debt.
It is important you understand that your part nine debt agreement will be a legally binding agreement between the debtor and the creditor. This agreement needs to be accepted by the majority of creditors in dollar value of debt before it can become a legal agreement.
A debt agreement is an effective way to manage your debt and avoid bankruptcy.
Frequently Asked Questions
What is a Debt Agreement?
A Debt Agreement is a legally binding agreement under the Bankruptcy Act of Australia. Debt Agreements can be an alternative to bankruptcy. A Debt Agreement is a legal offer by you to your creditors to make repayment of debts based on what you are able to afford. Repayment period is usually 2 to 5 years. If the Debt Agreement is accepted by 50% or more of the creditors in $value then it stops further demand for payment of those debts. Interest is frozen and the debt will not be charged any further interest. If the offer is not accepted then the creditors have the right to continue pursue you for payment of debt and interest.
What Debts Can be Included as Part of Debt Agreement ?
Unsecured debt which includes credit cards, store cards, personal finance, school fees, trade debt, utilises (power, water, gas , council), medical and rent.
Can you use a Debt Agreement?
After tax income less than $ 67,744.95
Unsecured debt less than $ 90,326.60
Assets available to repay debt (excluding mortgaged assets, assets under HP, Lease or Chattel Mortgage) less than $ 88,379.20
Can only enter into ONE debt agreement every 10 years.
Who administers the Debt Agreement?
We are registered by ITSA (Insolvency Trustee of Australia) to administer part 1X Debt Agreements.
How Do I Go About Setting Up a Debt Agreement?
We can advise you on the alternatives that are available to you to solve your debt problems. If a Debt Agreement is a recommended solution then we will we prepare on your behalf the necessary financial reports including budget of income and expenses and prepare the applications for Debt Agreement and lodge this with the ITSA (Insolvency Trustee of Australia). We will communicate with your creditors during the process. We will inform you of the creditors voting results. Once the Debt Agreement is accepted we will administer your payments on behalf of the creditors.
What are your Responsibilities Under a Debt Agreement?
- Full disclosure of all debts
- Full disclosure of all your income
- Full disclosure of all assets
- Make monthly repayments as provided by in the Debt Agreement
- What are the Costs of setting up Debt Agreement?
- No Fee for initial consultation.
We will charge a fee for preparing and setting up the Debt Agreement. We will charge a Fee as specified by ITSA for the ongoing administration of the Debt Agreement. ITSA charges a realization fee. All ongoing fees are included in the monthly repayment amount as calculated in the Debt Agreement.
What is the Next Step?
One of our Debt Agreement officers will discuss on a no obligations basis with you, the alternatives to your debt problems, and if suitable your eligibility to enter into Debt Agreement.
