Take the collection companies off your back so you can enjoy life again As this can have serious repercussions when applying for a debt agreement, it`s important to get the right guide before making decisions. Declaring bankruptcy means explaining to your creditors that you can no longer afford the repayments you owe them. A successful insolvency application frees you from most of your debts. Ted & Josie are married and have four children. Ted works as a storekeeper and earns $25,000 a year. Josie used to work as an administrator, but that job ended a few months ago. Since then, it has been impossible for Ted & Josie to keep pace with its credit repayments. Ted & Josie feel like they`re falling further and further behind and will never catch up. Ted and Josie are considering going bankrupt. A person or organization called the debt agreement administrator would help you propose the agreement and then pay your repayments to your creditors. A portion of each repayment will be retained by the debt agreement administrator as a fee for the management of the agreement.
No no. It is your creditors who decide whether to accept or reject your proposal. However, as a debtor, it is your responsibility to have fully and completely disclosed your financial situation to your creditors; Make your best offer and commit to meeting the terms of the proposal. With the conclusion of your debt agreement, your unsecured debt will be frozen. This means that no interest or fees can be levied on your unsecured debt, while the debt agreement is in effect. This allows you to repay your debts over a set period of up to 3 or 5 years via weekly repayments based on accessibility. Once the terms of the debt agreement are successfully concluded, you will be released from any unsecured debt contained in the agreement. In many cases, we can come up with a financial plan to completely circumvent a formal debt agreement. Once the debt agreement proposal is drafted, your creditors will have the opportunity to vote. AFSA (also known as the Australian Financial Security Authority) sends your proposed debt agreement to each creditor and asks them to vote by a set date. The voting time is usually 5 weeks. Votes are counted when AFSA gets “yes” votes from a majority of dollar creditors, your proposal is accepted.
A debtor who proposes a debt agreement commits an act of bankruptcy. It is not the same as going bankrupt. A debt contract is an alternative to bankruptcy, but since it falls under Part IX of the Bankruptcy Act, the proposal of a debt contract is considered an act of bankruptcy. If you are unable to pay your debts, you may want to consider bankruptcy or an alternative to bankruptcy called a “debt agreement.” These will be formal legal options available under the Bankruptcy Act 1966. Private insolvency is a legal concept that describes your financial situation. If you are not able to pay debts when they are due, you are insolvent. . . .