You may propose a debt agreement to your creditors if you meet certain criteria. The proposal may involve you making regular payments to repay creditors over a longer period of time (say 3 to 5 years) and may involve you paying less than 100% of the debt due. All interest charges are stopped under a debt agreement.
Creditors will consider a debt agreement proposal in a situation in which the debtor cannot meet all of his/her commitments as and when they fall due for payment. You are required to disclose certain financial information to creditors to enable them to make a decision on your proposal, and Australian Financial Solutions can help you gather this information.
Australian Financial Solutions will also meet with you to develop a household budget and determine a sustainable amount that you can afford to repay in the future.
Your debt agreement proposal is then submitted to ITSA for processing and circulation to your creditors for consideration. Once approved you will only be responsible for making the repayments to which you have agreed in the debt agreement.
To be eligible for a debt agreement an individual must not have been bankrupt, had a debt agreement or given a Part X authority within the previous ten (10) years and must also meet the following qualifying criteria:
- Have an income of less than $66,284.40 (after tax); and
- Have unsecured debts of less than $88,379.20; and
- Have divisible assets available to creditors of less than $88,379.20.
Whilst your debt agreement is continuing, your creditors are prevented from taking any action against you in respect of the debts, and when the terms of the debt agreement are completed you are released from your debts.
Contact Australian Financial Solutions now for help solving your debt problems.