Debt Agreement
What is a debt agreement?
There is 2 types of debt Agreements
1. Informal Agreements, It is possible to negotiate arrangements with creditors to repay certain debts over a period of time. Dealing with debt in this way requires some skill, and it is best to consult a Debt financial facilitator to put a realistic and manageable proposal to persuade creditors to accept something like a reduced lump sum or a long term instalment arrangement. Creditors may ask to be informed of your complete financial position, including other creditors, to ensure that any proposal is fair. Clearly entering into such an arrangement avoids the stigma and consequences of bankruptcy, although it is likely that creditors may make an adverse credit report which will remain on your credit file for a period of 5 years.
2. Debt Agreements, also known as a Part IX Debt Agreement, is a legally binding agreement between you and your creditors.
Debt Agreements can be a flexible way to come to an arrangement to settle debts without becoming bankrupt.
With the assistance of a Debt Agreement administrator, a proposal needs to be submitted to Australian Financial Security Authority (AFSA) for approval before being put to a person's creditors. A debtor must be insolvent (unable to pay debts as and when they fall due) in order to put forward a proposal to enter into a Debt Agreement.
1. Informal Agreements, It is possible to negotiate arrangements with creditors to repay certain debts over a period of time. Dealing with debt in this way requires some skill, and it is best to consult a Debt financial facilitator to put a realistic and manageable proposal to persuade creditors to accept something like a reduced lump sum or a long term instalment arrangement. Creditors may ask to be informed of your complete financial position, including other creditors, to ensure that any proposal is fair. Clearly entering into such an arrangement avoids the stigma and consequences of bankruptcy, although it is likely that creditors may make an adverse credit report which will remain on your credit file for a period of 5 years.
2. Debt Agreements, also known as a Part IX Debt Agreement, is a legally binding agreement between you and your creditors.
Debt Agreements can be a flexible way to come to an arrangement to settle debts without becoming bankrupt.
With the assistance of a Debt Agreement administrator, a proposal needs to be submitted to Australian Financial Security Authority (AFSA) for approval before being put to a person's creditors. A debtor must be insolvent (unable to pay debts as and when they fall due) in order to put forward a proposal to enter into a Debt Agreement.