For many people, being insolvent has no impact on their employment whatsoever. If you are an employee, ie you are not running your own business, and you do not need to a trade or professional license to do your job, there should be no reason why your employment should be affected by an act of bankruptcy. But we always recommend that you read your employment contract thoroughly and, if in doubt, contact your HR department.
Things can become a little more difficult when you are working for yourself. The first and most obvious problem is that if you commit an act of bankruptcy you will have a default on your credit file, which will affect your ability to get supplies on credit. If you are bankrupt or in a debt agreement it is important to note that is an offence to gain credit over a certain amount without disclosing that fact.
Professions that require a license can also be affected by an act of bankruptcy. Whilst the Bankruptcy Act itself does not impose any restrictions, your particular licensing authority may have restrictions that it places on people who have gone bankrupt or entered into an arrangement under the Act. If your profession is listed here and you are considering declaring yourself bankrupt, you should contact the relevant authority to find out if your license will be affected.
And most importantly, if you are the director of a corporation, you will be automatically disqualified if you declare bankruptcy or enter into a Personal Insolvency Agreement. You would have to entrust the directorship to someone else for the duration of your arrangement, and ensure that you comply with all of the terms so that you can be re-appointed once it has been completed.
It is important to note, however, that each act of bankruptcy carries with it different consequences and so, depending on what it is that you enter into, you may still be able to carry on your business relatively free of side-effects. For example, if travelling overseas is a requirement for you, this would be affected by bankruptcy, but not by a Debt Agreement or Personal Insolvency Agreement. Restrictions on running a business as a sole-trader and applying for more credit apply to both a Debt Agreement and a Bankruptcy, but there are no similar restrictions if you enter into a Personal Insolvency Agreement. And whilst you would have to step down as director under a Bankruptcy or Personal Insolvency Agreement, you would be able to remain in your position were you to do a Debt Agreement. Given the different rules which apply to the different solutions, careful thought and planning needs to be given before you enter into any arrangement. (read of comparison of debt solutions here)
If you are concerned that your employment might be affected by an act of bankruptcy it is essential that you seek immediate professional advice. The factors that will affect the path you choose to take are numerous, and making the wrong choice could impact your livelihood tremendously. The team at Debt Free Australia are trained in all areas of personal insolvency, and can help you to find the solution that will have as minimal an impact on your employment as possible. Call us today on 1800 462 767.

Filing for bankruptcy should always be considered as the last resort if you are overwhelmed with unsecured debt. Before making a potentially life changing decision, we will carefully go through all of your options to see if you can avoid bankruptcy.  The options we will explore include:

•  Negotiating an informal arrangement with your unsecured creditors;
• entering into a formal Debt Agreement (Part IX) or;
• entering into a formal Personal Insolvency Agreement (Part X).

Informal Arrangements
An informal debt arrangement can be negotiated directly between you and your creditors to manage your unsecured debt. These arrangements might include, for example, a suspension of repayments for a period of time, or agreed regular installments.
The only drawback to this arrangement is that the agreement is not legally binding on your creditors, which means they can change their mind if you do not keep up with your promised repayments.  Typically this can then lead to creditors adopting a more aggressive approach which may include bankruptcy proceedings.
Informal arrangements can be negotiated with or without the assistance of an Insolvency Practitioner.
 
Part IX Debt Agreement
A Debt Agreement is a legally binding arrangement negotiated between you and your creditors usually with the assistance of a Debt Agreement Administrator. This arrangement will often take the form of an agreed sum paid in installments (usually over three to five years). The interest on your debts will be frozen at the time you lodge your proposal with AFSA.
Entering into a formal debt agreement means that you will be protected from any creditors who may have threatened bankruptcy proceedings.
You need to be aware of the consequences of proposing or entering into a Debt Agreement and these are explained in our related article.
Click here to read more.
Part X Personal Insolvency Agreement
If your debt exceeds the Debt Agreement Thresholds but you wish to deal with your debt by way of a formal agreement with your creditors, you may wish to enter into a Personal Insolvency Agreement (PIA).
A PIA works in much the same way as a Debt Agreement, ie it must first be approved by your creditors. The key difference is that entering into a PIA requires you to appoint a Controlling Trustee to take control of your assets and report your proposal to creditors and hold a meeting of your creditors. For this reason, a PIA usually costs more than a Debt Agreement.
If you want to explore your options on how to legally avoid bankruptcy, then call us today on 1800 462 767 for free and impartial advice.

Who should I appoint as my Administrator?
Whilst you can submit a Debt Agreement Proposal yourself, most people choose to appoint a Registered Debt Agreement Administrator. We strongly recommend that you only deal with a Registered Debt Agreement Administrator who has a sound reputation and experience in the industry. Furthermore, it is advisable that you deal with an administrator who is qualified in all areas of personal insolvency. That way you won’t be dealing with someone who is only registered and qualified to offer you a Debt Agreement. If you deal with a Registered Trustee in Bankruptcy, they are licenced to offer you any personal insolvency service.  In other words a Registered Trustee will not be biased towards only offering one service to you.
Here at Debt Free we have a fully qualified and licenced Registered Trustee in Bankruptcy, who is licenced to offer you any personal insolvency service including a Debt Agreement, Personal Insolvency Agreement or Bankruptcy. Our unique debt assessment processes will ensure that you are offered the right debt solution.
Before you decide who to appoint as your administrator, make sure you do your own research and ask the following questions:

• How long have you been registered with AFSA?
• How long have you been operating in the industry?
• What personal qualifications do you hold?
• Who will be responsible for handling and supervising my case?
• What other services are you licenced to provide?

 
What fees are charged and when do I start paying?
All Registered Debt Agreement Administrators will charge fees. The critical issue to understand is how much are those fees and when will you be asked to start paying them.
The fees charged by Debt Agreement Administrators will be split into two (2) categories.  These categories are:

• Set-up fees
• Administration fees.

 
Set up fees
Most administrators charge a set-up fee.  A set-up fee is to remunerate the Debt Agreement Administrator for helping you prepare the Debt Agreement Proposal and lodging it with the Debt Agreement Service at AFSA. The set-up fee may become payable before your administrator submits the proposal to AFSA for processing. Most Debt Agreement Administrators will charge a set-up fee and will most likely ask that the majority of it be paid before the Debt Agreement Proposal is lodged with AFSA for processing.
The key issue here is that you should not pay any money towards the set-up fee until the administrator has completed a thorough debt assessment. This is critical because unless a thorough debt assessment has been completed you will not know if you are eligible for a Debt Agreement or whether you can afford a Debt Agreement.
Here at Debt Free Australia we do not start charging any set-up fee until we have completed a thorough debt assessment. Once we have done that, we will know how much you can afford to pay into your Debt Agreement each week or month and only then we will ask you to start paying that amount towards your set-up fee.  In other words, we will not charge you any money until we are satisfied that we can offer you a Debt Agreement and you are eligible.
We have seen some companies charge a set-up fee for the client to later find out that they were not even eligible for a Debt Agreement.
 
Administration fees
Debt Agreement Administrators will also charge an administration fee. This fee is to supervise the agreement and to pay creditors on your behalf. The administration fee is charged as a percentage of the contributions that you make under the Debt Agreement and can only be drawn from the contributions you make once it has been accepted by your creditors.
If you would like some advice on selecting a Debt Agreement Administrator call the team at Debt Free Australia.  Our team is fully trained and can advise you on your best options.  Call us today on 1800 462 767.

A transaction to defeat creditors is exactly as it sounds; it is a transaction that a person enters into in order to defeat their creditors. But how can you “defeat” your creditors?

 If you were to suddenly find yourself unable to pay your debts (i.e. you were insolvent) and you declared yourself Bankrupt, your creditors would receive a proportionate and fair share of the sale proceeds of any assets you own that have a reasonable amount of equity in them. If you know that you are unable to pay your debts, though, and you decide to sell or transfer any of your assets so that they will not be sold when you declare Bankruptcy, you are trying to defeat your creditors.

 A transaction to defeat creditors is such because of the intention behind it. When you declare yourself Bankrupt, your Bankruptcy Trustee must perform investigations into your financial affairs. They will check to see if you have transferred any assets into anyone elses name in the past, perhaps that of a family member or spouse, or sold anything for a lot less than what it was worth. If you have done so, they must then determine if you were insolvent at the time, that is, that you were unable to pay your debts as and when they fell due. If you were, it could be determined that you transferred or sold those assets with the intention of keeping them from your creditors in the future. It is possible that the transaction could be reversed, and the asset sold at its proper value so that the sale funds can be evenly distributed to your creditors.

 If you are considering the effects and rules of Bankruptcy, you should consult the advice of a professional before taking action. Your past actions can have an effect on the way that your Bankruptcy is administered, and in addition, there may be other options available to you so that you can avoid Bankruptcy and the possibility of any such transactions being reversed.  To avoid bankruptcy you may wish to consider a Debt Agreement or a Personal Insolvency Agreement (depending on criteria).

 Our highly experienced advisors have a background in all aspects of personal insolvency, and will be able to give you advice that is tailored to your unique financial situation. Call us today on 1800 462 767.

Many people who are struggling with finances do not even know that help is available, let alone where to look. There are actually numerous resources available for people who need help with their finances, and the most appropriate would depend on what sort of assistance you need. If your concerns are to do with, say, business finances, investments, or retirement planning, you would be looking for the services of a financial planner or advisor. Most often, though, people in need of financial assistance are struggling with personal debts and bills.
One of the first places you can look for financial counselling is within community organisations such as Anglicare and the Salvation Army (to name some of the more well-known). A list of various organisations that can be contacted in each state and territory can be found here on the Australian Financial Security Authority’s (AFSA) website. These services are usually free of charge and designed for those who cannot afford to pay, and can range from help organising simple household budgets to third party negotiations with your creditors for repayment/hardship arrangements.
There are also professional budgeting services available for those who have the income available to pay their bills, but simply need some help with planning and making their payments. A simple google search using the term “budgeting service” will yield a number of companies that may be able to help in this regard.
AFSA themselves are also a good resource for advice and information, although being primarily concerned with aspects of insolvency, you may find that they are of more use when you yourself are insolvent. They can be contacted on 1300 364 785 for general information about such arrangements as Debt Agreements, Personal Insolvency Agreements, and Bankruptcy.
If you are looking for advice and assistance with any type of financial dilemma, call one of our consultants on 1800 462 767. Here at Debt Free Australia we are committed to helping indebted Australians find a solution to their financial difficulties. Our highly trained staff will be able to help you to determine what sort of assistance you need and, if it is not something that we can help you with ourselves, who would be the best organisation to refer you to. Call us today on 1800 462 767 for free and impartial financial relief advice.

A Debt Agreement  is a formal debt relief solution that is available to insolvent Australians who meet certain eligibility criteria. For many people who are struggling with unmanageable debt it is an ideal way to settle their unsecured debts and protect themselves from harsh collection activity such as bankruptcy. Whether or not you are able to propose a Debt Agreement is dependent upon certain factors.

The first requirement is that you are genuinely struggling to pay your debts, ie. that you are insolvent . This simply means that you are unable to your debts and bills as they fall due, and without resorting to using your credit facilities. If you are unsure if you are insolvent or not, a reputable Debt Agreement Administrator should be able to tell you after completing a thorough debt assessment. At Debt Free Australia we offer a free debt assessment.

The second requirement is that your income, unsecured debt level, and the value of any available equity in your assets, all fall below a certain threshold. The threshold amounts are updated every six months or so and can be found here. If you exceed any of these thresholds you are not eligible for a Debt Agreement, but you would be able to look at a Personal Insolvency Agreement instead. But if you fall under all of them, you have the option of doing either (though it would make more sense for you to do a Debt Agreement).

The third requirement is more practical than legal, and that is that you quite simply are able to afford the repayments. Again, this is where a Debt Agreement Administrator is able to help you. A reputable Administrator will draw up an indepth household budget for you and ensure that your Debt Agreement repayments are affordable and sustainable, as well as being acceptable to your creditors.

If you are wondering whether a Debt Agreement is the right solution for your unmanageable debt, call one of our consultants today on today on 1800 462 767. We can help you to determine your eligibility for a Debt Agreement and advise you on all of its pros and cons so that you can make an informed decision.