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AGREEMENT SERVICES |
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PART IX DEBT AGREEMENTS |
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Debt Agreements were introduced by the Commonwealth Government as an alternative to bankruptcy. They provide an opportunity for you to consolidate all your unsecured debt into one amount. You then make an offer to repay this total at repayments you can actually afford. (The amount you repay is often less than what you owe.) Your creditors vote whether they will accept your proposal and if a majority agrees, then the Agreement is legally binding on all your creditors.
Instead of paying all your creditors individually, you make just one, interest-free payment to a Registered Debt Agreement Administrator who then forwards payments to each creditor as outlined in the Agreement.
Entering into a Debt Agreement will have some consequences, but not the consequences of bankruptcy. For example, you can keep assets up to a limit (currently $88,379.20*) that could not be kept if you were bankrupt.
HOW A DEBT AGREEMENT IS SET UP
There are two stages involved with a Debt Agreement:
* The initial consultation and document preparation * The lodgement and administration of an Agreement
The first stage of a Debt Agreement involves dealing with a consultant from Agreement Consulting Services. Terry Wardle, Senior Consultant, endeavours to deal with each client personally. Your current situation will be reviewed and your options advised. When a Debt Agreement seems a good solution, and is in your best interest, the necessary paperwork is completed. This includes a “Statement of Affairs”, “Proposal” and “Explanatory Statement”. A budget is prepared to show that your repayments are manageable.
Your file is then reviewed and sent to you to check and sign. Once returned to us, it is ready for the next stage.
The second stage is when the completed and signed Debt Agreement paperwork is given to a Registered Debt Agreement Administrator—Penny Doube, from Agreement Administration Services. All the information is checked again and then lodged with the Australian Government’s Insolvency and Trustee Service Australia (ITSA).
ITSA is the regulator of the personal insolvency system in Australia and is part of the Australian Government Attorney-General’s Department.
When ITSA receive the documents, they will write to you and to your creditors to advise your Debt Agreement Number. This Debt Agreement Number can then be quoted to debt collectors should they contact you.
From when ITSA accept your proposal for processing, your debts are frozen for a period of 5 weeks. During which time, all interest, charges and penalties on your unsecured debts are stopped. Each creditor is invited to vote on whether to accept or reject your proposal. No legal action concerning those debts can be enforced during this period.
* Current amounts to 30 June 2010
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Agreement Services About
Summary, Eligibility
Repayments, Fees
About, How, What
Debts, Assets
Loans, Tax, Travel, Business
Income, Obligations
Penny & Terry
Terms used
Facts, Links
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