Debt Agreement Key Features:
- All interest is frozen on your unsecured debts;
- One regular repayment (weekly, fortnightly, or monthly);
- Maximum term of 5 years (all unsecured debts legally discharged);
- You can expect a proportion of the debt to be legally written off;
- Beyond Debt provides a full service one-stop solution.
Debt Agreement Summary
A debt agreement is a formal, managed plan which allows you to settle your debts by making a regular payment based on what YOU can afford, over a set period of time. The agreement is a loan free solution for people who are struggling with debt.
Who are Debt Agreements for?
It is for people struggling with debt, i.e. they cannot afford to repay their debts as and when they fall due and cannot get a loan but nevertheless, want to repay their debts. A Debt Agreement is often a great solution for this group of people.
Debt Agreements allow you and your creditors to come to a compromise that usually allows you to repay less than the full amount for the debt. It is also a legally binding agreement between the person in debt and their creditors who are owed the money.
What is a Part 9 Debt Agreement?
A Part 9 Debt Agreement IS NOT A LOAN. It is legal agreement between you and your creditors. You make a one easy to manage, regular payment to your administrator who manages your debts until the agreement is complete. Beyond Debt (DCS Group Aust Pty Ltd) manages thousands of agreements. After your agreement is legally binding, you (and your creditors) will only deal with Beyond Debt. Your creditors are prohibited from writing to you or calling you.
Criteria that must be met in order to qualify for a Part 9 Debt Agreement:
- Can not have been bankrupt in the last 10 years;
- Can not earn more than $83,169.45 annually after tax;
- Can not have assets of more than $ 110,892.60 (individually).
- Can not have unsecured debts of more than $ 110,892.60 (individually).
Things you should know:
- A debtor who proposes a Debt Agreement commits an act of bankruptcy (however, the debtor is not bankrupt). A creditor can use this to apply to court to make the debtor bankrupt, if the proposal is not accepted by creditors.
- Information about your debt agreement, including your name, and some other details, 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 NPII notation will be removed, but no sooner than five years from the date the debt agreement commenced.
- The ability of the debtor to obtain further credit is affected. Details may also appear on a credit reporting agency’s records for up to 5 years, or longer in some circumstances. However, if the proposal does not result in a debt agreement being entered, details of the proposal have to be removed from credit reporting agency records.
- During the voting period, creditors cannot take debt recovery action or enforce a remedy against the debtor or the debtor’s property, and must suspend deductions by garnishee on debtor’s income.
- All unsecured creditors are bound by the Debt Agreement, and are paid in proportion to the debts owed to them.
- If the terms of the agreement are not met, creditors can recommence recovery action for those debts contained in the debt agreement. This will include interest backdated to the start of the agreement. However, before an agreement is terminated, Beyond Debt will request a ‘variation’ to the original agreement that more meets your current/changed affordability level, so that the agreement can continue but with reduced payments.
- The debtor is released from most unsecured debts when they complete all their obligations and payments.
- Secured creditors may seize and sell any assets (eg a house) which the debtor has offered as security for credit, if the debtor is in default.
- Creditors cannot take any action against the debtor or property of the debtor to collect their debts.
- The agreement does not release another person from a debt jointly owed with the debtor.
- 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.
- If operating a sole trader business while in a Debt Agreement, the debtor must include their full name in the business name; e.g. John Smith trading as Smith’s Shop.
What is the Debt Agreement process?
- Beyond Debt conducts a preliminary assessment of your financial situation over the phone;
- You formally engage us to act on your behalf;
- Beyond Debt conducts credit checks, property valuations, and contacts all of your creditors;
- A Debt Agreement is sent to all creditors to accept or reject. Most Beyond Debt Agreements are accepted;
- Once the debt agreement has been accepted it becomes legally binding;
- Make your one regular payment and get on with the rest of your life.
Individuals who do not meet the criteria above may still apply for a personal insolvency agreement. Alternately, see the Debt Solutions page for other options. You must determine whether the information is appropriate in terms of your particular circumstances.
If you think a Part 9 Debt Agreement is a solution for you, contact Beyond Debt today.
*Please be advised that any amounts on this website may change slightly from time to time. Updated 04/04/2017