Debt Agreements

What are Debt Agreements?

A debt agreement is a binding agreement between you and your creditors and fall under Part IX of the Bankruptcy Act 1966. Under a Part IX debt agreement your creditors agree to accept an amount of money that you can afford to pay, over a set period of time to settle your debts. Once you have paid this money, your creditors cannot recover the rest of the money you owe. The proposal will be sent to the each of your creditors and they can vote to accept or reject your proposal. If the majority of creditors accept your proposal, then the debt agreement will start and all creditors will have to accept the terms of the agreement. All creditors will receive the same proportion of the amount you owe. For example, if you propose to repay 90% of all your outstanding debts over a five-year period, then all creditors will get 90% of what you owe them.

Impacts of Debt Agreements

Impacts of entering into Debt Agreements:

  • Your public record –Your name and other details will be listed on the National Personal Insolvency Index (NPII)for 5 years from the date of the agreement or 2 years after the end date, whichever is later. Where your proposal is withdrawn, not accepted, or lapses, the information will only appear for a year. The NPII is a public record managed by the Australian Financial Security Authority (AFSA).
  • Your future credit –Your debt agreement will be listed on your credit report for up to 5 years or longer in some circumstances.
  • Telling new creditors –You must tell a new creditor about the debt agreement when you take on new debt or obtain goods and services over a certain amount. You can find out the credit limit on the AFSA website.
  • Your business –If you have a business and are trading under another name, your debt agreement must be disclosed to anyone who deals with your business.
  • Your career –It may prevent you from practising certain professions or being employed in certain positions of trust. If you belong to a regulated profession you should check the impact of your insolvency with the relevant professional body.
  • Possible bankruptcy –Proposing a debt agreement, whether it is accepted or rejected by your creditors, is an act of bankruptcy. If you propose a debt agreement that is not accepted by your creditors, they can use the act of bankruptcy to apply to the court to make you bankrupt.

Who is a Debt Agreement For?

There are eligibility criteria you must meet to be able to enter into a debt agreement.

If you meet the criteria a debt agreement administrator will help you prepare a debt agreement proposal, based on what you can afford to repay.

You can view more details and the eligibility criteria on the Australian Financial Security Authority’s (AFSA) website.

The proposal will be sent to the each of your creditors and they can vote to accept or reject your proposal. If the majority of creditors accept your proposal then the debt agreement will start and all creditors will have to accept the terms of the agreement.

All creditors will receive the same proportion of the amount you owe. For example, if you propose to repay 90% of all your outstanding debts over a five-year period, then all creditors will get 90% of what you owe them.

Why do you need a Debt Agreement?

For whatever reason, or reasons, you have reached a point where you are unable to repay the debts against you. You may have one large creditor or multiple creditors.

However you came to be in this situation one thing is certain and that is it will not go away on its own.

Seeking assistance from professionals will ensure you achieve your financial recovery faster, more effectively and with the least personal impact.

Offermans has years of expertise in debt solutions and can guide and assist you through the process to achieve your future free from debt.

How can Offermans Help?

Experience: The Offermans team of local experts understands the intricacies of Debt Agreements and can act as your Debt Agreement Administrator to ensure your interests are protected during and after the process.

Expertise: We’ll answer any questions you have and explore all of your options before you commit to a certain plan of action.

Ethics: We are fully independent and as such, will provide you with confidential, honest and educated advice to achieve the solution you are after.

The Process

In a few steps our team can help make sense of your situation, formulate a plan that’s right for you and put it in place to achieve a solution that achieves your financial future free from unpayable debts.

  • Confidential & complimentary 1-hour consultation
  • Quote for services specific to your individual needs
  • Offermans to Develop Strategy
  • Offermans implement strategy
  • You achieve peace-of-mind and financial freedom