The following FAQs concerning debt agreements will assist you in understanding it as a debt solution alternative. These questions and the responses are based upon Australian Financial Solutions' significant experience in providing people with debt solutions.

• What is a Debt Agreement?
• Why would my creditors want to accept my Debt Agreement proposal?
• Do I meet the qualifying criteria to propose a Debt Agreement to my creditors?
• What are the advantages to me of proposing a Debt Agreement to my creditors?
• What is a Debt Agreement proposal likely to involve?
• What types of things will Australian Financial Solutions help me with in proposing a Debt Agreement?
• Will my creditors keep chasing me for payment if I propose a Debt Agreement?
• Do all of my creditors have to approve the Debt Agreement for it to be approved?
• Who will act as the Administrator of the Debt Agreement for me?
• Are all of my debts captured under a Debt Agreement?
• When will the Debt Agreement end?
• Will my credit rating be affected?
• What should I do now?

Remember that there are alternatives to bankruptcy. So consider the FAQs then contact us at Australian Financial Solutions to receive our free and confidential advice, and discuss the debt solution that best suits you.

What is a Debt Agreement?

Click here to be taken directly to our information page that explains what a Debt Agreement is all about.

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Why would my creditors want to accept my Debt Agreement proposal?

Under a Debt Agreement, your creditors are likely to receive more of their debt back than if you went into a Part X or Bankruptcy.  Additionally, costs to the creditor are generally lower than if they were to seek repayment of the debt themselves. Creditors may also give weight to the fact that you are making a genuine effort to repay the most you can afford in the circumstances. 

A Debt Agreement is managed by a Debt Agreement Administrator, which is one of the services we offer at Australian Financial Solutions.

Creditors will have an increased level of confidence as to the  accuracy of the information they receive, which is what they use to assess whether they are willing to accept the Debt Agreement Proposal.

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Do I meet the qualifying criteria to propose a Debt Agreement to my creditors?

To be eligible for a Debt Agreement you must be:

• unable to pay your debts as and when they fall due; and
• you must not have been bankrupt, or ;
• had a debt agreement or proposed a Part X (personal insolvency agreement) within the previous ten (10) years.

In addition you must also meet the following qualifying criteria:

• Have an income of less than $62,735.40(after tax) pa ($83,000 before tax pa); and
• Have unsecured debts of less than $83,647.20; and
• Have divisible assets available to creditors of less than $83,647.20.

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What are the advantages to me of proposing a Debt Agreement to my creditors?

There are several advantages in proposing a Debt Agreement to your creditors.  Once approved a Debt Agreement will avoid bankruptcy, and many of the restrictions and stigma that go with bankruptcy, which will be the main benefits to you (as long as you keep to the agreement).   

Other benefits include the fact that you will have clearer and affordable future commitments without the constant threats from creditors that are owed money.  You will also avoid the Court process associated with bankruptcy and have the opportunity to be released from your debts upon completion and the freezing of debts and interest.

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What is a Debt Agreement proposal likely to involve?

The proposal may involve you making regular payments to repay creditors over a longer period of time (say 3 to 5 years) in a situation where interest charges are stopped.  This may involve you paying less than 100% of the debt due to your creditors.   Australian Financial Solutions works with its clients to determine the proposal that best fits with their personal circumstances.   Australian Financial Solutions can assist you too.

Once your Debt Agreement proposal is developed and supported by the relevant information, your proposal is circulated to your creditors for approval.

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What types of things will Australian Financial Solutions help me with in proposing a Debt Agreement?

Australian Financial Solutions will meet with you to calculate a household budget, identify and list your assets and liabilities and determine a realistic amount that you can afford to repay to your creditors in the future. 

Australian Financial Solutions can then assist you in completing the prescribed information forms that are required for lodgement and, if your proposal is approved by creditors, Australian Financial Solutions can also act as your debt agreement administrator.

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Will my creditors keep chasing me for payment if I propose a Debt Agreement?

Once you have proposed a Debt Agreement, creditors can not take any further action against you or your assets until such time as your Debt Agreement is either rejected or comes to an end.  Where creditors have any questions on the Debt Agreement proposal, and Australian Financial Solutions is acting as debt agreement administrator for you, we will address those questions with the creditor. 

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Do all of my creditors have to approve the Debt Agreement for it to be approved?

A Debt Agreement proposal is only required to be approved by a majority (in value) of your creditors and it then becomes binding on all of your creditors.  Once approved you will only be responsible for making the repayments to which you have agreed in the debt agreement.

Your Debt Agreement will not affect the rights of any secured creditors you may have.

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Who will act as the Administrator of the Debt Agreement for me?

You can appoint Australian Financial Solutions to act as your debt agreement administrator.

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Are all of my debts captured under a Debt Agreement?

When the terms of the Debt Agreement are completed you are released from your debts and creditors will write off the balance of the debt owing to them.  There are certain debts that are not dealt with by a Debt Agreement and these typically remain payable and include Court penalties and fines, parking and traffic fines, certain damages from accidents, student assistance loans, child support, other maintenance debts and HECS debts.

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When will the Debt Agreement end?

A Debt Agreement will end when you have met all of your obligations under the agreement, unless the debt agreement is terminated earlier on application of a creditor or by the Court. - EG if you have ceased to keep to the payments under the agreement or if you repay earlier than due.

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Will my credit rating be affected?

When your proposal is first accepted for processing your details will be added on the National Personal Insolvency Index (NPII).   This will affect your credit rating, although if you have had difficulty in repaying your debts or are falling behind in repayments, then your credit rating may already be affected.

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What should I do now?

Taking action is the key to regaining control and releasing the pressure.  Contact us now at Australian Financial Solutions and we will help you to find the debt solution you need.

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