Debt Agreements can help families under stress
To propose a Debt Agreement you need stable employment and sufficient income to support your repayments. We will work with you to put your Debt Agreement Proposal together.
Once your Debt Agreement Proposal has been completed, it is lodged with the Australian Financial Security Authority (AFSA). AFSA will either reject or accept your Debt Agreement Proposal. AFSA will reject your application if they do not believe there has been full disclosure or that it will cause you unnecessary hardship if it proceeds. If AFSA accepts your Debt Agreement Proposal, they will record the same on the NPII. The creditors cannot charge interest on your debt past that point.
If AFSA accepts your proposal
If AFSA accepts your Debt Agreement Proposal, they will send it out to creditors. Your creditors have the opportunity to either vote for or against it within 35 days (or 42 days if it is sent out in December).
If more than 50% in value or the creditors who reply vote for your Debt Agreement Proposal, you will then have a binding Debt Agreement and AFSA will record same on the NPII. Creditors will continue to be barred from charging interest on their debt and cannot undertake other forms of debt collection action against you.
Proposal agreed to
You then must do what the Debt Agreement requires, most likely making a payment of money once a month. It is important that you do not fall behind with your payments. If you are able, we recommend you pay a little bit extra each month to build up a buffer. Once all required payments have been paid your Debt Agreement will be finalised, releasing you permanently from debts caught by your Debt Agreement.