A Debt Agreement is an agreement with your creditors to repay your outstanding debt at a rate that you can comfortably afford. A Debt Agreement is only suitable for a person with an unmanageable amount of debt. To put it simply, you pay either a weekly or fortnightly amount and we split that amongst your creditors in order to pay off your debt. In most cases, if you can not afford to repay the full amount of your debt, we can negotiate with your creditors in order to get a reduction for you.
If you are insolvent ie you are unable to pay your debts as they fall due, you may be eligible. In addition, in the last 10 years you must not have been bankrupt or had a previous Debt Agreement. There are also thresholds relating to your assets and income as well as your total debts.
No, a Debt Agreement is not a loan, it is an agreement with your creditors. It is an interest free way of combining your current unsecured debts into one regular repayment set to match your budget.
Unfortunately there are no quick fixes to dealing with unmanageable debt. Bankruptcy brings with it many requirements and restrictions like having assets sold by a trustee, having your income monitored and having to surrender your passport to name just a few. Through a Debt Agreement, you are basically asking your creditors for a fair go by presenting them with your best offer. This way you are legally allowed to hold onto assets up to the value of $106K; you will not have your income monitored and you will not have to surrender your passport.
Once you enter a Debt Agreement it is listed on your credit report for a minimum 5 years. This will include the date you entered into the agreement and when you have fulfilled all your obligations. It may also impact your ability to obtain further credit during this period.
To get started on preparing your case, we charge an initial deposit of $50. In addition, Safe Debt Management charges a set up fee which covers the time we spend on contacting your creditors and obtaining all relevant information. We also prepare and explain all paperwork to you. We do not require this fee to be paid in full upfront. A $200 non-refundable Debt Agreement lodgement fee is payable to AFSA at the time of submitting all paperwork.
It is important to be aware of companies that charge upfront fees which are payable even if your Debt Agreement proposal is not accepted. In the unfortunate event that your proposal is rejected by your creditors and you decide not to submit another proposal our set up fee is fully refundable and will be paid back to you into your nominated bank account. If we can’t help you, we won’t charge you, it’s that simple.
As your administrator we will manage all payments for you, including payments received from you and payments made to your creditors. Fees are payable throughout the term of your agreement to both AFSA and Safe Debt Management for the management of your Debt Agreement and this is included in your payments. These vary depending on the amount of your debt. We also send you regular progress reports so that you can see what you have paid and exactly what you have left to be debt free!
If your Debt Agreement is accepted, your debts are frozen and all further interest is stopped! During your agreement creditors and debt collectors can no longer contact you to repay this debt! You will now be required to make one regular payment which we will distribute to your creditors on your behalf. A Debt Agreement does not mean you are filing for bankruptcy.
The debt agreement system is regulated by AFSA (Australian Financial Security Authority) under Part IX of the Bankruptcy act. It ensures that you are guarded from any further legal action including bankruptcy during your agreement on the debts that have been included. Basically you are protected under the Bankruptcy Act without going bankrupt. AFSA maintains a database called the NPII (National Personal Insolvency Index) that includes the details of all people that have entered into any form of Administration. If you have a vehicle loan, home loan or are in a rental agreement you can keep possession of this property by continuing to repay your secured creditors. In most cases secured debts are not included in your Debt Agreement. The above points are some of the more detailed information that you will need to consider prior to deciding on whether a Debt Agreement is the right choice for you. There are also additional factors that you may need to consider depending on your individual situation - which one of our Debt Agreement specialists can explain to you.
The administrator I've been dealing with has been very helpful and professional and has kept me up to date with the process from the start. I have been struggling to get on top of my debt since the breakdown of my marriage in 2013. I believe I will be able to budget properly and meet my obligations in the future without resorting to credit.
The service I have received has been far more beneficial than I had been given from anyone else. The ladies took the time to listen and recommend strategies to overcome my debt. I can't thank them enough. It will help get my life back on track.
Michelle has been friendly, speedy with her service, incredibly informative and helpful with my agreement details, and I would recommend her to anyone I know! Outstanding! Immensely helpful for me to consolidate my debts, which have been accruing and causing great stress. A great financial burden lifted; thank you!!
Kristen was very friendly and extremely understanding. She took the time to explain and help me with this stressful transition and decision. I hope this will give me a second chance to understand my finances better and plan for my future and not to live beyond my own means.
Service received was one of the best I've ever had. Everything that was said was so consistent and accurate. I couldn't of asked for anything more. Thank you. This service will change me and my children's life. We will be able to live normally and enjoy life. Absolutely life changing. Thank you so much from us.