There are many alternatives to bankruptcy, with a Debt Agreement being one of them. A Debt Agreement is a legally binding agreement you can reach with your creditors if you can no longer afford to repay the debt. The outlines of this agreement can be found under Part IX of the Bankruptcy Act 1966 in Australia.

Not everyone can apply for a Debt Agreement. Only people who have been struggling with debt for some time can enter into a Debt Agreement. A Debt Agreement is essentially an arrangement with your creditors to pay an agreed amount over a period of time (usually this ranges from 3 to 5 years). In most cases you can settle your debts for less than what is owed and the balance will be legally written off.

• How do I know if I am eligible for a debt agreement?
• You are able to make a proposal for a Debt Agreement if you meet the following criteria:
• You are unable to repay debts when they fall due (insolvency testing)
• You haven’t been bankrupt, filed for a debt agreement or personal insolvency agreement for the last ten years
• Your estimated after-tax income for the next 12 months to be less than the set amount

If you are exploring your personal debt solutions such as a Debt Agreement and would like to speak to a professional to learn more about them, then please contact Debt Free Australia. We offer a FREE initial consultation so that you can get unbiased, expert advice on which one is right for you. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.

Paying off your debts is one of the best options you can make to improve your financial situation. However, it is also one of the biggest financial issues most people struggle with. Paying your debts sometimes may not be easy – especially if you make mistakes along the way. Below are the top 3 mistakes that you should make sure to avoid:

1. Not having a pay off plan and a debt free date.
When you start paying off your debts it is important to have a clear strategy in mind. Setting clear goals and having a specific plan can help you stay motivated and track progress.

It is important to firstly assess your current financial situation, your current needs and wants. Based on this you should ask yourself these questions:

• Which debts do you want to pay off first?
• Which debts do you want to pay off earlier?
• How much money did you want to allocate to paying off your debts?
• What is the total amount of money you owe?

2. Not having an emergency fund.
When you are faced with debt, you may feel inclined to forgo having an emergency fund. Whilst this can be very tempting, it is important to always have an emergency fund in case unexpected expenses arise. Emergency funds should only be used for true emergencies such as an unexpected medical expense or car repair.

3. Missing payments.
Making your debt repayments should be one of your top priorities. It is important to make your debts repayments as early as possible each month, even if it isn’t due until the end of the month. This can prevent you from forgetting to make your payment or if unexpected expenses pop up. Missed payments might not only result in penalty fees but also lower your credit score which can make it harder to secure loans in the future.

If you are looking for advice personally tailored to your situation about any debt relief solutions, then please contact Debt Free Australia. Debt Free Australia are passionate about helping Australians get out of debt and prepare for a better financial future. Please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.

What Is A Personal Insolvency Agreement?

A Personal Insolvency Agreement (PIA) is a legally binding payment arrangement you can reach with your creditors if you can no longer afford to repay the full debt. Also known as a Part 10, a PIA can be a flexible way to get relief from your debts without being made bankrupt.

You qualify for a personal insolvency agreement if you meet the following criteria:

You are considered insolvent (unable to pay your debts as and when they fall due); and
Have unsecured debts more than > $1,19,119
Have equity in assets more than > $2,38,238 or
Regularly employed & annual income is more than > $105,009 (after tax) or approximately >$147,715 (before tax for Australian residents)

The process of setting up a personal insolvency agreement includes firstly, appointing a Controlling Trustee. You can do this by signing a 188 Authority. Once the 188 Authority is executed, this means your assets become subject to the control of your Controlling Trustee, who will then investigate your financial affairs and prepare a report to make an offer to your creditors.

Typically, a Controlling Trustee will recommend a Personal Insolvency Agreement proposal if it provides your creditors with a better outcome compared to if you went bankrupt. In most cases you can settle your debts for less than what is owed and the balance will be legally written off.

A personal insolvency agreement is one of the two agreement options available. Another option that may be available to you is a debt agreement. To see a comparison between a personal insolvency agreement and a debt agreement, please click here.

If you are exploring your personal debt solutions and would like to speak to a professional to learn more about them, then please contact DFA. We offer a FREE initial consultation so that you can get unbiased, expert advice on which one is right for you. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.

Here at Debt Free Australia we always try to find the least severe financial solution before we consider bankruptcy. With that philosophy in mind, we offer a free financial assessment to explore possible alternatives before committing to Bankruptcy. Whilst filing for bankruptcy is a quick and easy way to get out of debt, it may have adverse consequences, please click here for more information. With this in mind, here are some simple tips you can use to help avoid bankruptcy:

• Cutting down expenses
  Putting together a budget is the easiest way to work out and organise your spending habits. Freezing your credit cards is the first step to curb your spending. If you cannot sustain your current lifestyle, consider downsizing, prioritising your necessities and reducing your discretionary spending.

• Selling some of your assets
  Take action immediately by sell what you can spare to pay your debts, such as furniture, jewelry, and electronics.

• Negotiate with creditors
  You should contact your creditors as soon as once you realise potential issues with meeting payment obligations. In some cases, creditors may agree to lower interest rates, reduce fees, or change payment terms.

• Prioritise your debts
  Create a plan to prioritise your debt repayments. Budget to pay for absolute necessities such as food, housing, and transport. Next would be paying off debts with the highest interest rates and so on.

  We understand that every situation is different and provide advice personally tailored to your situation about any debt relief solutions. Debt Free Australia is passionate about helping Australians get out of debt and prepare for a better financial future. Please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.

Life After Bankruptcy in Australia  – Your emotional, physical and financial wellbeing

Here at Debt Free Australia, we are often asked about whether or not there is a ‘life’ after bankruptcy.

For many people, the emotional, financial, and physical stress of personal insolvency can sometimes make it seem like there is no end to it. However, bankruptcy can give you an opportunity for a fresh start. Here are a few things you need to know about life after bankruptcy in Australia.

How will my future look in life after bankruptcy?

Emotional
It can be extremely stressful in the period leading up to bankruptcy. The constant phone calls and harassment from creditors can feel like there is no end. However, after bankruptcy you can slowly diminish this as our personal insolvency experts can help take care of you.
 
Physical
It is important to keep a healthy mind and body. As such regular exercise and proper nutrition are both things you need to prioritise in your life so you don’t allow the stress to affect your health.
 
Financial
In the aftermath of bankruptcy, it is wise to carefully consider your financial decision before jumping into another potential debt-inducing situation. For some people, getting a job is the first sense of financial stability they want to stand on their feet again.

In some ways, for people in a tough financial spot, bankruptcy can be considered as a means of relief – an opportunity for a fresh start.

If you would like to learn more about life after bankruptcy, then please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.

During the holiday season, many people travel overseas to visit their family and loved ones. However, if you are a bankrupt, there are certain conditions that you must adhere to. You will need to apply to your bankruptcy trustee and obtain permission before you travel.

Your trustee in bankruptcy may impose some travel conditions. The most common one is that you have paid or have made arrangements to pay any outstanding compulsory income contributions.  Your trustee may also require a bond prior to travelling.

You will commit an offence if you do any of the following:

• travel overseas without permission from your Bankruptcy Trustee;
• travel beyond the destinations and dates that your Trustee approved; or
• don’t comply with any conditions that your trustee imposes.

It is important to understand the severity of the consequences if you fail to abide by your travel conditions. If you fail to return to Australia when directed by your trustee, your trustee can apply to the official receiver at the Australian Financial Security Authority to extend your bankruptcy.

If you would like to learn more about bankruptcy contact our friendly and professional debt advisors at Debt Free Australia for a FREE consultation. Call us on our 24/7 debt advice line on 1800 462 767.

3 tips to help you manage your debt this holiday season

It’s that magical time of the year again, where many of us look forward to celebrating the holiday season. However, there is no denying that it can be expensive. If you don’t plan your spendings properly, you may end up in more debt after the festivities end. Here are 3 tips from our experts to help you manage your debt this holiday season.

CREATE A HOLIDAY BUDGET
We understand that this time of the year makes it tempting to splurge. That’s why we recommend you to create a holiday budget. Create a list of all the spending you plan to do – this includes both large costs and the little things. From airfare and accommodation to candy canes and Christmas baubles, you should be aware of the total expected amount of spending versus the total amount of money you have to spend.

DON’T FORGET TAX RETURNS AND HOLIDAY BONUSES
In addition to our first tip, account for other income such as your tax return and holiday bonus. Take advantage of this extra income by planning it into your holiday budget, if you choose to use it as spending money. Otherwise, you can put it towards your savings for next year’s holiday season. These two sums of money can also make a significant difference in paying off your existing debt. If you plan wisely, you can use it to help meet your debt management goals.

THINK OUTSIDE THE BOX
If you are struggling to buy the most popular toys for your kids or the latest iPhone for your spouse, consider adding a personal touch to your holiday gifts by making it yourself. Otherwise, many popular gifts go on sale after Christmas Day, so you can potentially buy the gifts at a fraction of the normal price.

If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment. Call us on our 24/7 debt advice line on 1800 462 767.

The Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 commenced on 27 June 2019. This debt agreement law reform aims to enhance accessibility so that the debt agreement system is a fairer system for both debtors and creditors. It also aims to protect the financially vulnerable from potentially being exploited.
 
There are various features of debt agreements that will be changed, including:

• The length that a debtor can propose for a debt agreement
• The criteria to enter into a debt agreement
• The voting rules for creditors
• The registration requirements for debt agreement administrators
• The investigative and inquiry powers of the Inspector-General

 
This purpose of this legislation is to help more people avoid personal bankruptcy, whilst providing greater protection for both debtors and creditors.
 
By tightening the regulation of debt agreement regimes, this reform helps boost confidence in the industry whilst upholding professional standards. It also introduces tougher penalties for wrongdoing.
 
The debt agreement law reform also helps promote transparency between the administrator and stakeholders to ensure that the debt agreement system is accessible and equitable.
 
To stay up to date about the latest insolvency news, sign up to our newsletter. To speak to a professional insolvency specialist, please contact Debt Free Australia on our 24/7 toll-free hotline on 1800 462 767. Our toll-free hotline is open 24 hours, every day 7 days a week.
 

Here at Debt Free Australia we always try to find the least severe financial solution before we consider bankruptcy. With that philosophy in mind we offer a free financial assessment to explore possible alternatives before committing to Bankruptcy. However, if you wish to file for bankruptcy, we see it as our role to firstly educate you about the consequences. There are serious ramifications to declaring bankruptcy in Australia, and we have detailed the top 3 below.
 

1) Loss of Assets
A consequence of bankruptcy is that you may lose your assets. If you have a house or a car worth more than $7,900, it will be sold by your Trustee.
 
2) National Record
Your bankrupt status will have a permanent record on the National Personal Insolvency Index (NPII). This is managed by the Australian Financial Security Authority (AFSA).
 
3) 3 Year Minimum
The standard period of a Bankruptcy is 3 years in Australia which begins from the day your application is accepted. However, in certain circumstances, this period may be extended to 5 or 8 years. Below are three examples of reasons why your bankruptcy may be extended:

• Failing to attend a meeting of creditors
• Not disclosing an asset or liability to your Trustee
• Leaving the country without permission from your Trustee

 
If you are looking for advice personally tailored to your situation about any debt relief solutions, then please contact Debt Free Australia. DFA are passionate about helping Australians get out of debt and prepare for a better financial future. Please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.

Here at Debt Free Australia, we offer a variety of debt solutions tailored to your needs. If you wish to file for bankruptcy, we see it as our role to firstly educate you about bankruptcy. So, what would an experienced Bankruptcy Trustee suggest to Australians who want to become debt free? Here are three pieces of advice our in house bankruptcy trustee, Anthony Warner.

1) Pay off your bad debts first
Non tax-deductible debts, also referred to as “bad debt”, are the debts that you have to your name that will not deliver future return on your investment. Popular examples of this includes personal loans, car loans, or credit card debt. Mortgage interest on your house is also not tax deductible in Australia.

2) Understand what the role of a bankruptcy trustee is
A Bankruptcy Trustee is a personal insolvency practitioner who is authorised to administer bankrupt estates and Personal Insolvency Agreements. They must be registered with the Australian Financial Security Authority (AFSA).

Their duties vary greatly. They can convene a meetings of creditors, pay out mortgages, sell assets of the bankrupt estate, initiate or defend any legal proceedings against the bankrupt, assess the bankrupt’s income for compulsory income contributions, and more. This is very useful to know if you choose to move forward with bankruptcy.

3) Ask for help!
A bankruptcy trustee is required to give impartial and honest advice about bankruptcy. If you are considering bankruptcy, it is important to speak to a professional, as bankruptcy laws are very complicated and each case may have its own set of unique issues.

If you would like more advice from our in house bankruptcy trustee, Anthony Warner, then please contact Debt Free Australia. We offer a FREE initial consultation so that you can get unbiased, expert advice. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.