What is part 9 debt Agreement
According to the provision of part 9 of the Bankruptcy Act 1996, debt agreement is the binding agreement between you and your creditor. This agreement as provided by Part 9 debt agreement makes your creditor agree to accept what you can afford to pay over a determined period and with this, you settle your debt. Once this agreement is in place, and you have paid the said amount at the required period, your creditor is not allowed to recover what is left of the balance of the money owed. A debt agreement is an informal settlement with your creditors.
Important factors to consider when going into Debt Agreement
Explore other options and be sure debt agreement is your best option. Consider negotiating an extended payment time or a restructured repayment plan.
Get a financial counselor so enable your explore all available options that are better than a debt agreement. Your counselor can opt to speak to your creditors on your behalf and expose you to a variety of sources you can get help.
Debt agreement does not cover all types of debts
Steps to Debts agreement
The debt agreement administrator checks your eligibility to see if you meet the criteria. Eligibility criteria are available on AFSA website.
A debt agreement proposal is prepared for you. This is based on your income and what you can afford.
A proposal is sent to all of your creditors. Acceptance or rejection of the proposal will come from your creditors.
If the majority of the creditors agree to the proposal, the agreement is executed, and all creditors are bound to conform to your proposal at this stage.