The use of debt agreements to avoid bankruptcy is on the rise, with more and more Australian’s turning to debt agreements when they find themselves with insurmountable debt problems.

Debt agreements give people debt relief, certainty and many protections, whilst avoiding some of the more arduous conditions that come with bankruptcy.

Additionally, debt agreements can help people keep their family home.

For more information, check out our Debt Agreement page, which has a lot of useful information written by our registered debt agreement administrator.

Whilst debt agreement figures have risen during the past 5 years, there has been a corresponding decline in bankruptcies, indicating that more people are looking at a debt agreement to avoid full bankruptcy.

Figures released by the AFSA today for the December quarter 2012 maintain this trend.  They are as follows:

• Total personal insolvency activity:(7,845) increased by 1.91% against the December quarter 2011 (7,698): a decrease of 4.27% on the September quarter 2012 (8,195).
• Bankruptcies: 5,259 new bankruptcies in the December quarter 2012, a decrease of 5.63% against the December quarter 2011 (5,573) and a decrease of 7.59% on the September quarter 2012 (5,691).
• Part IX debt agreements: 2,510 new debt agreements in the December quarter 2012: the highest number on record for a quarter. In the December quarter 2012, the number of debt agreements increased 23.52% against the December quarter 2011 (2,032) and increased 3.63% on the September quarter 2012 (2,422).
• Part X personal insolvency agreements: 76 new personal insolvency agreements in the December quarter 2012, a decrease of 18.28% against the December quarter 2011 (93) and a decrease of 7.32% on the September quarter 2012 (82).

If you want to find out how a debt agreement can help you avoid bankruptcy, we can help. You can speak to our team of debt experts on 1800 462 767. The field of personal insolvency is complex so only speak to an expert that you can trust.

Superannuation is usually protected in bankruptcy unless you have made some excessive or unusual contributions into the super fund in an attempt to defeat your creditors.
The best way to explain this is by looking at some examples:
Example 1
Situation: The compulsory employer paid superannuation contributions are made direct by the employer into the superannuation fund.
Answer: Employer paid contributions are usually paid under an employment contract and are paid as a percentage of your salary (currently 9%). These contributions would not be challenged by a Trustee in Bankruptcy.
Example 2
Situation: The debtor six months prior to bankruptcy sells a house and contributes $100,000 into his superannuation fund as a lump sum contribution. At the time the lump sum contribution was made he had $150,000 of unpaid debts.
Answer: In this situation, the Trustee in Bankruptcy would regard the $100,000 lump sum contribution into the super fund as a transaction to defeat creditors. The equity in the house ($100,000) would have been available to his creditors (which were $150,000 at the time). Given his creditors exceeded his assets when he made the lump sum transaction he would have been regarded as insolvent. The Trustee in Bankruptcy would have strong grounds to “claw back” the $100,000 from the superannuation fund.
To speak to one of specialist debt consultants regarding your options please call us on 1800 462 767 or fill in the form to the right. Bankruptcy is a specialist area so only speak to an expert that you can trust.

The short answer is Yes!
A Debt Agreement gives you full flexibility and places no restrictions on your overseas travel, which is one of the benefits compared to Bankruptcy.
If you declared yourself bankrupt you would need to submit a request to your Bankruptcy Trustee before you could travel overseas. While most reasonable requests are allowed it is at the discretion of your Trustee in Bankruptcy to approve the application.
If you are trying to decide between Bankruptcy and a Debt Agreement and you want to keep your travel options open then a Debt Agreement does provide more flexibility to accommodate our modern lifestyles.
We offer free expert advice on these matters and can ensure you get the best advice available for your specific circumstances.
If you would like some advice on a Debt Agreement, call our experienced bankruptcy 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.

Entering into a Debt Agreement comes with some consequences, the main one being that you will have a default placed against your name for 7 years from the time you lodge your proposal. A Debt Agreement will typically last somewhere between 3 to 5 years, which means that when you finish paying it, you will most likely have a further period of 2 to 4 years where you still have that mark on your credit file. This does not mean that you cannot apply for more credit, but it does mean that the lender may want or need to consider your application more carefully.
Being limited in your ability to get more credit doesn’t have to be a bad thing especially when you think about the reasons why the default is placed against your name in the first place. The main reason for giving you a default is to ensure that the Debt Agreement is something that you really need to do – without that consequence no one would pay back everything that they owe! But another reason for marking your file is that it gives you the chance to financially rehabilitate yourself. It seems a little pointless to finally find yourself completely debt free, only to then go out and get yourself back into debt again. Most of the people that we speak to say that they never want credit ever again, let alone for the 2 to 4 years after they complete their agreement.
But if you do want or need to apply for credit after completing your agreement, we recommend that you first wait about 6-12 months after completing your agreement. Give the dust a little bit of time to settle. During that time you can start putting away the money that you have been paying into the Debt Agreement for the last 3 to 5 years, so that when you do apply you have a history of saving that you can show them, and a nice amount in your savings account that you can list as an asset. In the end, the bank’s decision could be influenced by a number of factors including:

1. the  default placed on your credit file from the Debt Agreement;
2. your relationship with them;
3. their lending criteria;
4. your savings; and
5. the economic climate at the time.

There are ways to improve your chances though, and the very commitment of proposing and completing a Debt Agreement to settle your debts instead of declaring bankruptcy can often be looked upon favourably.
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.

The purpose of a Debt Agreement is to be a good alternative to Bankruptcy, both for you and for your creditors. It is an arrangement that was designed by the government to help those people who are unable to pay their debts in full, but are able to pay enough to keep them from having to declare Bankruptcy. A Debt Agreement is governed by the same Act that Bankruptcy is, this means that all of your creditors are treated equally and the best result is achieved by all parties.
When calculating your Debt Agreement Proposal, there are two main things that need to be taken into account. The first is that it is affordable for you, because there is no point in committing you to a payment arrangement that you cannot fulfil. Secondly, it is important to ensure that your proposal is going to be acceptable to your creditors. Your proposal could be rejected if they think that it wouldn’t be worth their while, or if they can see that you have assets that could be used to pay back even more of the debt.
Most Debt Agreement Proposal payments are a fairly simple matter of ‘income’ minus ‘essential expenditure’. A professional Debt Agreement Administrator will work with you to ensure that all of your expenses, even those that only come up every year or quarter, are accounted for, and that the surplus amount that you are pledging is definitely going to be affordable for you. Out of that amount they will then determine how much is needed for government charges and the Administrator’s fees, and then from there, what percentage return your creditors will receive.
If your proposed return doesn’t look as if it will be satisfactory to your creditors, there is sometimes scope for a little creativity. Some people have an asset that they would be willing to sell during the course of the agreement, or a spouse or family member who is able to help. You can also agree to increase your payments as you pay off other arrangements during the term of the agreement, such as a car loan or a whitegoods lease.
An experienced Debt Agreement Administrator will be able to advise you on what is necessary to put the best possible proposal forward, based on your income and assets, your financial commitments, and the expectations of your creditors. Here at Debt Free Australia we have been drafting Debt Agreement Proposals for over seven years, so we know what it is that your creditors are likely to accept.
Call us today on 1800 462 767 to discuss a payment arrangement that is going to work for you and your unique situation. We offer a free debt assessment and will not charge you one cent until we are confident that your debt agreement proposal will be acceptable to your creditors.

One of the major concerns when considering declaring bankruptcy is whether or not it will affect your employment. For the majority of people, bankruptcy should have no adverse effects on their job. It can present as a concern for some, though, particularly if they work in certain fields or require certain licences to carry out their job.
 
Declaring bankruptcy can affect the holding of certain licences, so if you need a particular licence to carry out your job, you need to take this into consideration before applying for bankruptcy. The responsibility for the decision lies with the organisation that provides the licence, so you will need to speak to them directly for advice. Some people may be subject to very strict employment conditions, especially if they work in industries where bankruptcy could create a conflict, such as the gaming and finance industries. If there is a clause in your contract stating that your employment will be terminated if you declare bankruptcy, you need to be prepared for that eventuality.
 
In regards to whether your employer will be notified of your bankruptcy, the answer is generally no. However, bankruptcy is recorded on the National Personal Insolvency Index (NPII), which an employer can search at any time to obtain information about any current or past insolvency arrangements that you may have been a party to. If you owe your employer money and they are listed as a creditor in your bankruptcy, they will obviously be notified of your bankruptcy and will receive all of the necessary reports from your Trustee. A garnishee notice could also be issued to your employer that requires them to pay part of your wages directly to the Trustee if you fail to make your compulsory income contributions during your bankruptcy.
 
If you have concerns or doubts about bankruptcy and how it may affect your employment, feel free to speak to one of our expert consultants on 1800 462 767. Our telephone hotline operates 24 hour, 7 days a week so that you can reach us anytime that is convenient for you.
 

Finding the right assistance for your debt problems can be hard, especially when you are being hassled by creditors who are chasing you for payments. It is a stressful and worrisome period, not only for the individual needing debt assistance, but also for their family and friends.
When one is facing unmanageable personal debt, finding the right debt assistance is so important. An experienced debt advisor can provide a tailored, personal solution that makes all types of debt easier to deal with, including credit cards and personal loans. Professional debt assistance can give individuals peace of mind during times of stress and uncertainty.
When searching for the right professional to assist you with your debt problems, be on the look-out for a company that is willing to be upfront with you. A reputable company will be transparent in regards to their qualifications and prices, and will not pressure you into committing to their debt assistance services. Debt Free Australia has been operating in Australia since 2006 and has helped countless Australians with their personal debt problems. They are fully licensed to provide all of the formal debt assistance solutions that are regulated by the Australian government, so there is no risk of being offered a solution that is not right for you.
Contact us today on 1800 462 767 to find out how they can assist you with your financial situation.

Are you struggling with personal debt? Do you feel as though you have lost control over your life? Look no further, Debt Free Australia (DFA) is only a phone call away!
A major cause of financial stress comes from the uncertainty of your situation. Often creditor providers will use technical terms that you haven’t encountered, and you can be threatened with bankruptcy and other forms of recovery action. Most people do not realise the extent of their financial difficulties, let alone the debt relief options available to them; a professional debt advisor can help you to fully understand your financial condition.
At DFA, our free and confidential advice line operates to aid those who are experiencing personal debt problems. The professional, experienced and knowledgeable team at DFA are here to help you explore your options and work out the best course of action for you to take.
Not comfortable speaking on the phone? No worries. Simply send us an email at info@debtfreeaustralia.com.au for a guaranteed swift and helpful response. You can also use our free online debt assessment tool located on our website.
Take the reins back and steer your financial future in the direction you desire. With a 24/7 hotline, Debt Free Australian is here for you at any day, any time. Call us today on 1800 462 767.

Here at Debt Free Australia, we are aware that personal debt problems can start at any time, even earlier in life. If you feel as though you are currently struggling with personal debt, or are on your way to having a problem, it is important that you seek professional financial advice.
More often than not, people run into personal debt problems due to credit card usage. Once your credit card has been maxed out, it is recommended that you refrain from applying for a new credit card. You need to allow yourself the opportunity to pay off the debt accumulated on your original card, not jump straight into more debt. Applying for a new card will not make your personal debt problems any better; it will only delay the inevitable bill for yet another repayment.
Take some time to reassess your spending. Many people with debt problems find that by keeping track of their spending with a strict budget and living within their means, their personal debt reduces more quickly.
Debt problems are avoidable if you seek help as soon as you find yourself floundering. If you have already passed this stage and have more personal debt than you can manage, it is best that you seek professional help before the burden gets any worse. Our professional and experienced team at Debt Free Australia is here for all your personal debt problems and enquiries.
For more information on personal debt, or for impartial and obligation-free personal debt advice, contact our 24/7 hotline on 1800 462 767.

One of the easiest ways of falling into debt is through excessive credit card use. Avoid the grievances and traps of personal debt and educate yourself on these common debt traps.
New Credit Card: Many people will simply obtain a new credit card in order to pay off their old credit card. Credit card providers are more than happy to give you a card, but you need to make sure you don’t fall behind even further on payments when it comes to paying off increasing credit card debt.
Credit Limits: Don’t fall into the trap of viewing credit limits as an approval to keep spending. Budget wisely and make sure you can actually afford to pay back a product before deciding to buy it.
Ignoring Letters: Choosing to ignore the piling letters from banks is not a solution to your problems. The faster you are able to recognise your inability to repay what you owe, the easier it will be to set a course of action.
If you feel as though you have fallen into one or more of these debt traps and are concerned about falling behind on your personal debt repayments, do not hesitate to call the experts at Debt Free Australia on 1800 462 767. We operate 24 hours a day, 7 days a week and are ready any time to take your call.