Become debt free!
Are you struggling with debt and can’t consolidate? Want to stop your creditors from chasing you? Get a debt agreement!
You may be eligible to have your debt reduced!
You propose the terms that best suit your needs and help you effectively manage your debt.
Read on to find out how you can get debt free today!
What is a Part IX debt agreement?
Part IX debt agreement is provided for under the Bankruptcy Act 1966. Instead of declaring yourself as bankrupt, you make a binding legal agreement with creditors to satisfy your debts in a stipulated manner.
The debt is paid to the creditors through an administrator.
Once you have met the terms of the agreement, the payment is taken as fulfilment of the entire debt amount and you are no longer required to pay anything.
This is not like debt consolidation which involves taking out another loan and rolling of your debts into one.
Qualifying for a debt agreement
Most people that are heavily in debt will qualify for a debt agreement. However, it is best to ask yourself the following questions to ascertain whether you are eligible:
- Can the debts be included in agreement?
This depends on the type of debts that you have. If they are credit card, tax debts or personal loans, they can be included. Car loans and mortgages cannot.
- Can you make the reduced repayments?
If you don’t have the financial capacity to commit to repayments, then a debt agreement may not solve your problems. However, some people make an agreement to sell an asset, instead of making the repayments.
Can I enter into a debt agreement?
A debt agreement is only made available to individuals who are insolvent. This means that you are unable to pay your debts, as and when they fall due.
You must also meet the other requirements under the Act including:
- Must not have previously entered into a debt or bankruptcy agreement in the past ten years.
- After tax income of less than $89,339.25.
- Unsecured debts of less than $119,119.00.
- Property that would be divisible among creditors if the debtor were bankrupt, valued at less than $238,238.00.
(figures are subjected to change)
Do you think that you qualify for a debt agreement? Speak to Debt Fix, qualified professionals who can help you get out of debt. Call Debt Fix today!
Are there any costs?
The administrator will charge a fee for their services. This is usually paid as part your repayments made under the agreement.
Will this affect my credit file?
We can assist you in getting approval for a loan, by helping you remove any defaults or blemishes on your credit file.
How do I enter into a debt agreement?
To enter into a debt agreement, you must complete a Part IX Debt Agreement Proposal which may detail:
- Who the administrator is and how they will be paid.
- If property is going to be sold – you must specify exactly what will be sold and transferred.
- Form must be lodged with the Insolvency and Trustee Service Australia (ITSA).
Creditors will then have a meeting and either accept or decline your debt agreement proposal.
If accepted: The agreement binds the creditor and they can no longer take action against you for recovery of unsecured debts. Administrator pays the creditor on your behalf.
If declined: You are entitled to re-submit your proposal and make changes. Otherwise, you may consider a Personal Solvency Agreement (Part X), or filing for bankruptcy.
If your circumstances change after you have entered into the agreement, you can apply to have the agreement varied.
Will a debt agreement impact my income?
In most cases, you can continue to work in the same job and your income will remain unaffected. However, you will need to live by a reasonable budget.
What happens if I break the debt agreement?
The agreement will be automatically terminated. Once this occurs, your only option is to file for bankruptcy or a Personal Insolvency Agreement (Part X).
When will the agreement end?
You will be discharged from the agreement when you fulfil your obligations under the debt agreement. It will also end if you breach the agreement.
Benefits of a debt agreement
Drowning in bills? A debt agreement is a great solution to solving your financial woes and has many great benefits!
- Once your debt agreement is accepted, creditors cannot further recover any debts from you.
- The interest on your loan/credit is frozen.
- You are not subject to the restrictions that are imposed during bankruptcy.
- You can continue to maintain your income.
- Reduce the stress and financial burden in your life.
- You can continue to maintain your income in some circumstances.
Applying for a debt agreement
Want to get out of debt? Need the right advice and expert help? Speak to professionals who can arrange a debt agreement and help you organise your financial affairs.
Specialists like Debt Fix will provide you with the solutions you need to solve your debt problems. Live the rest of your life debt free!