A Debt Agreement, or Part 9, is a formal agreement between a debtor and their creditors where a compromise is reached regarding the repayment of debt.
Debt Agreements are all about providing a solution to people who are experiencing difficulty in meeting their financial commitments.
If you find you are struggling with your debts a Debt Agreement could the best solution for you.
Below we have listed some of the most commonly asked questions about Debt Agreements to help you decide, however, if you would still like to know more, please call 1300 802 905 and talk to one of expert consultants.
How Could a Debt Agreement Solve My Debt Problems?
A Debt Agreement will:
- Combine your unsecured debt expenses into one manageable repayment amount
- Stop harassment from debt collectors
- Freeze interest charges, saving you thousands
- Stop legal action from creditors
Am I eligible for a Debt Agreement?
There are a number of criteria you need to meet to enter into a Debt Agreement:
- Your take home pay (after tax income) of under $1,578.94 per week (or $82,104.75 annually).
- Your unsecured debts must not exceed $109,473.00.
- You must not have filed for bankruptcy or have had a Debt Agreement in place at any time over the last 10 years.
- Any assets you own must not be worth more than $109,473.00.
If you fit the above criteria, then you may be eligible to apply for a Debt Agreement.
What are the consequences of a Debt Agreement?
- The ability of the debtor to obtain further credit is affected. Details may also appear on a credit reporting organisation’s records for 5 years, or until the debt agreement is completed whichever is longer. If the debt agreement is terminated it will be recorded for 5 years or 2 years after the termination, whichever is longer
- All unsecured creditors are bound by the debt agreement and are paid in proportion to their debts.
- A debtor must disclose that s/he is a party to a debt agreement if incurring debt or obtaining goods and services in excess of the threshold.
- If trading under a business name or assumed name (whether alone or in partnership) the debt agreement must be disclosed to all people dealing with the business.
- A debtor who proposes a debt agreement commits an act of bankruptcy. A creditor can use this to apply to court to make the debtor bankrupt if the proposal is not accepted by creditors.
- Not completing an agreement allows creditors to recommence recovery of the debt, including backdated interest. To avoid termination Debt Helpline will seek approval for a ‘variation’ to your agreement to lower the payments.
- Information about your debt agreement will be recorded on the National Personal Insolvency Index (NPII) for a limited time. When the obligations of your debt agreement have been completed, the notation will be removed five years from the date the debt agreement commenced.
Debt Helpline is a part of one of the largest and most trusted Debt Agreement Administrators in Australia. We help thousands of people every year who are now well on their way to being debt free, if they aren’t already!
Take the first step and find out if a Debt Agreement is right for you. Contact one of our expert debt consultants on 1300 802 905 and feel the weight of the world lift from your shoulders.
*Please be aware that any figures on this website may change slightly from time to time. Updated October 28, 2016