A Debt Agreement is a legally binding agreement which allows you to negotiate a repayment plan with your creditors to repay unsecured debt over an extended period of time (usually between 3 to 5 years).  If your Debt Agreement Proposal is accepted by your creditors the interest on their debts will be frozen.

A Debt Agreement does not deal with secured debts. If you wish to keep the assets subject to the secured loan you must keep paying the loan re-payments, otherwise the asset will be repossessed.

A Debt Agreement will provide you with the protection from bankruptcy. A Debt Agreement is also known a Part IX (9) Arrangement as it is managed under Part IX of the Bankruptcy Act.

With a Debt Agreement will you only have to repay what you can comfortably afford to repay after reasonable living costs are taken into account. We will help you establish what you can afford to repay and we will guide you as to whether we believe your creditors are likely to accept your Debt Agreement Proposal.  Your creditors must accept your Debt Agreement Proposal for it to become legally binding (the acceptance level is at least 50% of your creditors measured by the value of their claims).

Who should enter into such an Agreement

Only people who have been struggling with unsecured debt should submit a Debt Agreement Proposal. Strict application and eligibility criteria apply and it is at the discretion of the Registered Debt Agreement Administrator as to whether they will submit your proposal to your creditors. As a guide, Debt Free Pty Ltd will not usually recommend a Debt Agreement Proposal for unsecured debts less than $8,000.

What are the benefits?

• You can consolidate your unsecured debts into one monthly payment
• Interest and charges will be frozen
• We will deal with your creditors on your behalf

What are downsides?

You will be listed on the National Personal Insolvency Index (NPII) which is maintained by ITSA. The Debt Agreement will usually be listed on the commercial credit listings for 7 years.

Who should I appoint as my Administrator?

Whilst you can submit a Debt Agreement Proposal yourself, most people chose to appoint a Registered Debt Agreement Administrator. We strongly recommend that you only deal with a Registered Debt Agreement Administrator. You can check to see if the organisation you are dealing with is registered by contacting ITSA.  Debt Free Pty Ltd is registered with ITSA and is regularly inspected by ITSA for compliance with the Debt Agreement regime.

Do I have to pay fees to my Administrator?

Most Debt Agreement Administrators will charges fees. The issue to be careful about is when should you start making payments to your Debt Agreement Administrator and how much should you pay.

Debt Agreement Administrator’s fees are usually split into 2 categories:

• set up fees; and
• administration fees.

Set up fees

Most administrators charge a set up fee.  A set up fee is charged to remunerate the Debt Agreement Administrator for helping you prepare the Debt Agreement Proposal and lodging it with the Debt Agreement Service at ITSA. The set up fee may become payable before your administrator submits the proposal to ITSA for processing. Most Debt Agreement Administrators will charge a set up fee and will most likely ask that  most of the set up fee be paid before the Debt Agreement Proposal is lodged with ITSA for processing or accepted by creditors. Your Debt Agreement Administrator must also sign and lodge your proposal within 14 days of you signing it.  Never return your Debt Agreement Proposal unsigned or undated.

Administration fees

Debt Agreement Administrators will also charge an administration fee to supervise the agreement and it pay creditors on your behalf. The administration fee is charged as a percentage of the contributions that you make under the Debt Agreement.  This fee can only be charged by the administrator after your Debt Agreement Proposal has been lodged with ITSA and has been accepted by your creditors.

What happens if I can’t make the payments under the Agreement?

If you fail to make the payments under your Debt Agreement, it will typically result in your agreement becoming terminated by your administrator or your creditors. If you are struggling to make the payments under your Debt Agreement, get in touch with your administrator immediately as the agreement may be able to be varied.

We have already helped hundreds of Australians set up Debt Agreements.  We are a privately owned company and are focused on providing a personalised and professional service.

CALL DEBT FREE TODAY FOR FREE ADVICE ABOUT A DEBT AGREEMENT
WE ARE ONLY A FREE PHONE CALL AWAY — 1800 676 598

The other criteria you need to meet are:

• Unsecured debts are < $88 379.20; and
• Equity in assets are < $88 379.20; and
• After tax annual income is < $66 284.4 or approximately < $88,379 (before tax for Australian residents)

If you exceed these statutory thresholds you cannot apply for a Debt Agreement, however, you may wish to apply for a Personal Insolvency Agreement.

The Registered Debt Agreement Administrator must certify that your proposal is sustainable and you have disclosed all necessary information to your creditors. If your debt agreement proposal is accepted by your creditors, your administrator will collect the contributions you have offered under your proposal and will distribute those contributions to your creditors (less the approved administrator’s fee). The administrator will usually make the distributions to your creditors on a quarterly or six monthly basis but this will be stipulated in your proposal.

Debt Free Pty Ltd is a Registered Debt Agreement Administrator (Registration no. 1098) and has been providing services to Australians since 2006. The managing director of Debt Free Pty Ltd is also a Chartered Accountant and Registered Trustee in Bankruptcy.

Usually a Registered Debt Agreement Administrator is appointed to help you formulate a Debt Agreement Proposal

Debt Free Pty Ltd is registered with ITSA.

Contacting us is easy, call Debt Free on 1800 98 10 70.

A debt agreement is a leggaly binding agreement between you and your creditors. A debt agreement will allow you to make one afforable payment per month to your creditors.

• An alternative to bankruptcy
• Lower & more affordable repayments
• Lower your debt level
• Taking control of your debt position

GET A FREE DEBT EVALUATION AND TAKE CONTROL OF YOUR DEBT POSITION. LET OUR LICENSED DEBT AGREEMENT ADMINISTRATOR TO ASSESS YOUR SITUATION.

Contacting us is easy on our toll FREE line 1800 98 10 70

9am – 5pm 5 days a week.