If you are looking to get debt free, then one debt relief solution that you may consider is a Debt Agreement. A Debt Agreement is an arrangement between the debtor and their creditors in which the debtor is to pay an agreed sum over a certain period of time, usually 3 to 5 years, to repay their debts.
A Debt Agreement is governed under the Bankruptcy Act. However, it should not be confused with bankruptcy as it is an alternative to bankruptcy.
How to propose a Debt Agreement?
If you want to propose a Debt Agreement to your creditors, then you need to enlist the help of a Registered Debt Agreement Administrator (RDAA). This person should have the minimum level of accountancy qualifications.
The RDAA is there to assist you to create a realistic Debt Agreement that will also most likely gain the approval of your creditors. They will work with you to ensure that the amount that you stipulate is one that you will be able to realistically maintain.
Once the proposal is drafted, it must then be lodged with the Australian Financial Security Authority (AFSA). Once it is approved, AFSA then passes on the proposed Debt Agreement to your creditors. In order for your Debt Agreement to be accepted, creditors that make up at least 50% of value of the debt must approve it.
For more information on Debt Agreements, please contact Debt Free Australia to speak to one of our friendly and professional consultants. Debt Free Australia runs a free 24/7 hotline so you can call us whenever is convenient for you. Contact us on 1800 676 598 for free and confidential advice now.