If you are in debt then a debt agreement may be a solution for you. A debt agreement is a negotiated compromise with your creditors, which, if agreed to by your creditors becomes legally binding. Fox Symes is the largest provider of debt agreements in Australia.
Some examples of the kinds of proposals put in place are:
- A payment of less than the full amount of all or any of your debts.
- A moratorium on payment of your debts.
- A transfer of property from you to one or more of your creditors in full or part payment.
- Periodic payments of amounts out of your income to your creditors.
Who can enter into a debt agreement?
A debt agreement can be proposed by you if you..
- Have not been bankrupt, utilised a debt agreement or given an
authority under Part X of the Bankruptcy Act in the last 10 years;
- Have an after tax income of less than $77,340.90 per annum;
- Have unsecured debts of less than $103,121.20;
- Are insolvent
Fox Symes is the largest provider of debt solutions to individuals and businesses in Australia. If you would like to find out more about a debt agreement contact us on 1300 361 204 or fill out the short contact form.
What does insolvent mean?
A person is insolvent if and only if they cannot pay their debts as and when they fall due.
Is a debt agreement the same as going bankrupt?
No, a debt agreement is an alternative to bankruptcy. However by submitting a debt agreement proposal you are committing "an act of bankruptcy".
What does a debt agreement do?
A debt agreement freezes provable unsecured debts upon acceptance of your debt agreement proposal by creditors. This allows you to pay back the debts over an extended period of time at an amount per week you can afford.
What is a provable unsecured debt?
Examples of unsecured debts are medical bills, store cards, credit cards and some personal loans.
Do all creditors have to agree to my proposal?
No, not all creditors have to agree. The majority of the dollar amount of those creditors who decide to vote, and are entitled to vote, have to agree to your proposal.
What if an unsecured creditor does not vote or decides to vote against my proposal?
As long as the majority of the dollar amount of those creditors who decide to vote, and are entitled to vote, accept the proposal then it is legally binding on all creditors.
Can you guarantee that my creditors will accept my debt agreement proposal?
No. It is your creditors who decide whether they accept or reject your proposal. However as a debtor your responsibility is to make full and complete disclosure of your financial position, put forward the best offer you can and commit to complying with the terms of the proposal.
Will I be able to make one payment per week to all my unsecured creditors?
Yes, we will set up a weekly payment system by way of direct bank debit.
Will a Debt Agreement affect my credit report?
Both the debt agreement proposal and the debt agreement are registered on the National Personal Insolvency Index (NPII). Veda Advantage, the credit-reporting agency uses the information on the NPII to advise any creditors that you are under a debt agreement and/or have submitted a debt agreement. A creditor can also register a default against your name with Veda Advantage. Your debt agreement will be listed on your credit report for a seven year period. During this time you may find it difficult to obtain credit.
What is AFSA?
AFSA stands for Australian Financial Security Authority. It is a government department responsible for reviewing your proposal to creditors and the registration and facilitation of debt agreements.
Does AFSA have to accept my proposal?
No. AFSA may reject your proposal for processing if they think it is not in the best interest of your creditors, or if you are ineligible to submit a debt agreement proposal.
How long does it take?
Once AFSA has accepted your debt agreement proposal for processing, creditors may vote to either accept or reject your proposal within 35 calendar days.
What are the important dates?
The Processing Date: This is the date AFSA accepts your debt agreement for processing; and the Deadline Date: This is the date by which creditors may vote to either accept or reject your proposal. It is 35 calendar days from the Processing Date to the Deadline Date.
Between the date AFSA accepts my Debt Agreement for processing and the deadline date, do I pay my unsecured creditors?
You may continue to pay your unsecured creditors, however, you are under no obligation to do so. You must continue to pay your secured creditors which you have excluded from your proposal (e.g. house mortgage and car lease).
Fox Symes is the largest provider of debt solutions to individuals and businesses in Australia. Fox Symes helps over 100,000 Australians each year resolve their debt and take financial control.
If you would like to find out more about a debt agreement contact us on 1300 361 204 or fill out the short contact form.