At Debt Free we offer a free and unique debt assessment. Our debt assessment is carried out using state of the art computer software which will find the best solution to suit your circumstances.
We have developed and refined this software over a number of years so you can be assured you will receive impartial and expert advice.
We will always look for the least drastic solution to help solve your debt concerns.
Our software will test to see if you are eligible for the following solutions:

1. Release of equity from assets
2. Informal arrangement
3. Debt Agreement
4. Personal Insolvency Agreement
5. Bankruptcy

Release of equity

If you own property and have sufficient equity in it then you may be able to refinance the property and repay your unsecured debts.

Informal arrangement

We will test to see if you can pay your debts back in full including interest over a reasonable period of time (i.e. up to 5 years).

Debt Agreement

If you are unable to pay back your debts in full over a reasonable period of time, it may be advisable to look at other options which may include a Debt Agreement.  We will test to see if you are eligible for a Debt Agreement.

Personal Insolvency Agreement

If you exceed the threshold limits set for a Debt Agreement, then we will look to see if you are eligible for a Personal Insolvency Agreement.

Bankruptcy

Bankruptcy is always the last resort but for people on a low income with little or no assets to protect, then it can be the best solution.
Don’t agree to enter into any debt solution service until you have had a thorough and expert debt assessment.  Here at Debt Free we will complete this assessment free of charge.
You can complete a preliminary debt assessment on-line now. We will then contact you to collect your source documents to complete the assessment. In the meantime, if you have any questions call our friendly and professional debt advisors on 1800 462 767.

Personal Insolvency Services include, Bankruptcy, Debt Agreements and Personal Insolvency Agreements.
These services can only be provided by a licenced and registered insolvency practitioner. Before you start dealing with any company, make sure they are fully licenced and registered with AFSA.
There are 2 categories of personal insolvency licences which AFSA issue and regulate. The lesser category is a Registered Debt Agreement Administrator and the higher category is a Registered Trustee in Bankruptcy.

What is a Debt Agreement Administrator?

A Registered Debt Agreement Administrator (RDAA) is licenced to set up and supervise Debt Agreements only. A RDAA can be a company or a person. A RDAA cannot offer any other personal insolvency services such as bankruptcy administration and personal insolvency agreements. The reason for this is that the practitioner needs a higher degree of skill and experience to administer bankruptcy administrations and personal insolvency agreements. A RDAA is only required to hold a Certificate IV in Accountancy (which only takes 1 year to obtain at TAFE). Compared to a Registered Trustee in Bankruptcy who is required to hold a bachelor degree in accountancy and also be a member of the Institute of Chartered Accountants or CPA Australia.

What is a Registered Trustee in Bankruptcy?

To become a Registered Trustee in Bankruptcy the requirements are significantly higher (compared to a RDAA). A Registered Trustee in Bankruptcy who is required to hold a bachelor degree in accountancy (which takes a minimum of 3 years at university), be a member of the Institute of Chartered Accountants or CPA Australia (which takes a minimum of 1 year in post graduate studies) and also be a member of the peak professional body in Australia (Insolvency Practitioners Association of Australia which takes another year in post graduate studies). Obtaining all of these qualifications will take a minimum of 5 years.  In addition, to become registered as a Trustee in Bankruptcy, you must be able to demonstrate to AFSA that you have relevant work experience in administering bankrupt estates and personal insolvency agreements. Without all of this you will not obtain registration.
As a result of these more stringent educational and work experience requirements, a Registered Trustee in Bankruptcy will clearly have more skill and experience in handling personal insolvency cases.

A licensed insolvency practitioner is someone who holds the necessary qualifications and is registered with the Australian Financial Security Authority (AFSA) and or the Australian Securities and Investments Commission (ASIC).
To be licensed to offer all personal insolvency services you need to be Registered as a Trustee in Bankruptcy with AFSA. To become a Registered Trustee in Bankruptcy you need to hold a university degree in accountancy and be a member of the Institute of Chartered Accountants or CPA Australia. In addition, it is highly desirable that you also be a member of the Insolvency Practitioners Association of Australia. To obtain all of these qualifications it takes many years of study. It takes a minimum of 5 years to obtain these formal qualifications but it can take much longer to become registered as a Trustee in Bankruptcy. Obtaining the formal qualifications is only the first step. Gaining the necessary work experience will take much longer and AFSA conducts lengthy and thorough interviews before they register applicants. AFSA will test the applicant’s knowledge of the Bankruptcy Act very thoroughly, so unless you have many years of experience in administering personal insolvency cases, it is unlikely you will gain registration.
The benefit of dealing with a fully licensed insolvency practitioner is that they are highly experienced professionals and have completed very demanding studies. The other benefit of dealing with a fully licensed insolvency practitioner is that they can offer all personal insolvency services including:

• Debt Agreements
• Personal Insolvency Agreements
• Bankruptcy

When dealing with a fully licensed insolvency practitioner, you can relax knowing that the practitioner won’t be biased towards a particular product as they can legitimately offer all insolvency services. Some companies advertising their services on the internet don’t have fully qualified insolvency practitioners on staff and will instead charge you for doing some preparatory work and will then refer your case onto another company at a later stage. This of course leads to duplication in costs and unnecessary delays.
Here at Debt Free you don’t have to worry about any of that because our CEO is fully licensed insolvency practitioner with both AFSA and ASIC. We offer all personal insolvency services.
We look forward to assisting you with your personal insolvency issues.  Call our friendly personal debt advisors on 1800 462 767.

What is insolvent?

Being insolvent means you cannot pay your debts as and when they fall due. This usually happens when your household expenses consume all of your available income and you don’t have any surplus monies to pay your debts. This situation can only be solved if you have assets which you can sell to pay debts.
If you don’t have any assets to sell and you can’t make any changes to your household budget, then you should start looking for a debt solution as quickly as possible.
The good news is that we can help you find the right solution.

What are the consequences of being insolvent?

If you don’t address your insolvency, you could be made bankrupt  by a creditor if you owe them more than $5,000. Becoming bankrupt will place long lasting restrictions on you.

What options do I have if I am insolvent?

If you are insolvent, it is critical that you get professional advice from a company that is fully licenced and registered for all debt solutions. Here at Debt Free our CEO is a Chartered Accountant and a Registered Trustee in Bankruptcy. This means that we are licenced to handle all personal insolvency administrations in house. We can handle your case from the beginning to the end regardless of what solution you need. Listed below are the services you should consider if you are insolvent:

• Debt Agreement
• Personal Insolvency Agreement
• Bankruptcy

 
Call us now on 1800 462 767 if you wish to discuss your personal insolvency issues.

Whilst a Debt Agreement is an alternative to bankruptcy and has many advantages compared to bankruptcy you need to be aware that they don’t deal with all debts.
A Debt Agreement will only allow you to settle certain unsecured debts. So if you have assets which you wish to keep and they are attached to secured loans then these loans will need to be paid in the ordinary course. For example if you have a car or a house which is subject to a secured loan and you wish to retain these assets then you will need to continue to pay these loans. However, one of the major benefits of a Debt Agreement is that as long as you keep up with your secured loan repayments, the underlying asset will be protected from your unsecured creditors.
Click here to read more about the differences between secured and unsecured debts.
So if a Debt Agreement only allows you to settle unsecured debts, which unsecured debts can be included?  In short, only provable debts in bankruptcy can be included. To fully explain what is a provable debt in bankruptcy is beyond the scope of this article, but the most common types of provable debts are listed below:

• Accounting & or legal fees;
• Credit cards or store cards;
• Centrelink debts (unless it was incurred by fraud);
• Overdrawn bank balances (ie overdraft or overdrawn savings account)
• Personal loans, or business loans (if you have personally guaranteed them);
• Trade creditors (if you have personally guaranteed them);
• Medical fees;
• Mortgage insurance premiums;
• Pawn shop & or Pay Day lenders;
• Rent;
• Secured creditor shortfalls;
• Taxes;
• Utilities (like electricity, gas, telephone (including mobile), internet & pay TV).

 
You cannot include non-provable debts in a Debt Agreement. The most common types of non-provable debts are listed below:

• Any amount payable under the proceeds of crime laws;
• Abortive writs, collection agents expenses;
• Centrelink debts incurred by fraud;
• Child support (if the agreement has been registered with the child support agency);
• Council, strata levies & water rates;
• Debts incurred by fraud;
• Penalties and fines imposed by a Court;
• HECS debts;
• Unliquidated damages;
• Student Loans;
• Unenforceable laws.

If you want to discuss in more detail what debts can be included in a Debt Agreement then call our friendly Personal Debt Consultants in our toll free number 1800 462 767.

Secured Loans 

A secured loan is one that is backed by some sort of collateral or asset.  This basically means that the lender will “hold” the collateral (ie the asset) until you pay off the loan.  Whilst the asset is held as collateral or security for the loan, you cannot deal with the asset in any way without the lender’s approval. If for any reason you default on the loan, the lender has the right to take possession of the asset and sell it to repay the debt. This is also known as “foreclosure” or a “mortgagee sale”.  If there is a shortfall after the sale of the asset (ie the asset sold for less than what was owed then the lender can claim the shortfall but this amount will become an unsecured debt).
Typically secured loans attract a lower rate of interest.  That is because the risk involved for the lender is a little less (ie the lender has recourse against an asset in the event that you don’t pay the loan repayments).  The lender will not usually lend 100% of the value of the asset.  For example if you want to buy a house most lenders in the current market will only lend up to say 90% or 95% of the value of the house.  That is because the lender is reducing its risks of incurring a loss in the event of foreclosure.

Unsecured Loans 

An unsecured loan is where no security or collateral is provided for the loan.  The lender is taking the full risk that you will repay the loan on the terms agreed.  If you fail to make the repayments, the lender doesn’t have any asset to sell to recover its debt.  In the event of non-payment the lender may commence formal debt recovery proceedings which may lead to bankruptcy. As a result of the high risks involved, lenders will charge higher rates of interest. For example, a credit card is unsecured and typically attracts a high rate of interest.

What should you do if you can’t afford to repay these debts?

Can’t repay a secured debt – what should I do?

If you can’t afford to repay a secured debt, then you will need to speak to the lender and make arrangements to surrender the asset and allow the lender to sell it or you can seek the lender’s permission and sell the asset yourself. Of course if you sell the asset yourself you will need to remit the proceeds to the lender in repayment of the debt. Remember because the asset is “charged” you cannot sell the asset without the lender’s express permission. If there is a shortfall on the sale of the asset the debt will become unsecured. If you can’t pay the shortfall read below as to what may be your options.

Can’t repay your unsecured debts – what should I do?

If you can’t pay your unsecured debts you should start by seeing if you can reach an informal arrangement with your creditors.  If the informal arrangement isn’t successful or your creditors as a group won’t agree you may then wish to consider a formal arrangement. To understand the difference between a formal and informal arrangements with your creditors click here.
Call us now at 1800 462 767, if you need any help understanding the differences between secured and unsecured debts. Our personal debt advisors  are here to help you now.

Bankruptcy has some harsh consequences which will remain for many years after you have been discharged. Whilst you are bankrupt it may also place restrictions on your lifestyle and employment opportunities. Bankruptcy should not be considered lightly and any decision to file for bankruptcy should be carefully thought through. Please read this article very closely and also consider the alternatives to bankruptcy as they may be less intrusive to your lifestyle.
If you have any questions please call our friendly personal debt advisors on 1800 462 767. Our initial discussion is free of charge.

Bankruptcy Consequences

How long will it last?

Bankruptcy usually only lasts for 3 years, but under certain situations it can be extended out to 5 or 8 years. Click here to learn how it can be extended out to 5 years or 8 years.

Will there be a public record of my bankruptcy?

Yes, your bankruptcy will be recorded for life on the National Personal Insolvency Index which is a database maintained by the federal government agency known as AFSA

Will my credit file be tarnished by bankruptcy?

Yes, your bankruptcy will be recorded on commercial credit reporting databases for 5 years (starting from the date of your bankruptcy).

Bankruptcy Restrictions

Below is a snapshot of the restrictions which you may experience whilst bankrupt:

Surrender your Passport

Your Trustee in Bankruptcy will ask you to surrender your passport.  If you wish to travel overseas for work or pleasure you will need to firstly seek the permission from your trustee.  If you fail to return to Australia (when requested to do so by your Trustee), your bankruptcy will be extended to 8 years.

Yearly assessment of your income 

Your Trustee in Bankruptcy will need to undertake an assessment of your income every year of your bankruptcy.  The purpose of this is to make an assessment as to whether you are liable to pay compulsory income contributions into your bankrupt estate.

Restriction on credit limit

Whilst you are bankrupt you can’t apply for credit more than $5,703 without disclosing to the credit provider that you are bankrupt. Failing to do so can also lead to prosecution.

 Restriction on occupations 

Bankruptcy may restrict your employment opportunities.  Some professions do not allow bankrupts to practice freely without restrictions placed on them.  AFSA has published a list of professions or trades which may be affected by bankruptcy. If you hold professional qualifications or a trade licence you should carefully review this and contact your professional body or licencing body before you file for bankruptcy.