Congratulations on taking the first steps to achieving financial freedom with Safe Debt Management!
For a brief explanation on how a debt agreement works, view the below video.
We've also prepared some frequently asked questions - feel free to read and if you have any questions, just call 1300 661 901.
What is a Part IX Debt Agreement and how will it affect me?
A debt agreement is only suitable for a person with an unmanageable amount of debt. It is a legally binding agreement between yourself and your creditors to repay your outstanding debt at a rate that you can comfortably afford. Put 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 cannot afford to repay the full amount of your debt, we can negotiate with your creditors in order to get a reduction for you.
What about a consolidation loan?
Unlike consolidation loans, a debt agreement is designed to get you out of debt, not further into debt. A debt agreement is an interest free way of consolidating all of your debt into one regular payment, by presenting your best offer to your existing creditors. You may find that you have been refused a consolidation loan due to bad credit. This will not affect you being approved for a debt agreement.
What are the pros and cons of a debt agreement?
If your debt agreement is accepted, your debts are frozen and all further interest it stopped! Creditors and debt collectors can no longer contact you to repay this debt! You will make one regular payment based on what you can realistically afford for all of your debt, and your creditors will no longer direct debit your bank account. They are paid quarterly by us over the term of your agreement with the funds that you transfer into our trust account.
The fact that you entered into a debt agreement will be listed on your credit report for a minimum period of 5 years. This will include the date that you entered into the agreement and when you have fulfilled all of your obligations. Depending on the financial institution, this may affect your ability to obtain further credit during this period of time. As a complimentary service, when you apply to us we can advise you of the current listings on your credit report to help you make an informed decision on whether this is going to adversely affect you or not.
A debt agreement does not mean you are filing for bankruptcy. The debt agreement system is regulated by the Australian Financial Security Authority (A.F.S.A., formally I.T.S.A.) under Part IX of the Bankruptcy Act. It enforces that you are guarded from any further legal action, including bankruptcy. Basically you are protected under the Bankruptcy Act without going bankrupt. A.F.S.A. maintain 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, 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.
If a debt is jointly owed to a creditor, the agreement does not release the other debtor from liability.
What will all this cost?
A $200 non-refundable debt agreement lodgement fee is payable to A.F.S.A. at the time of submitting all paperwork.
Safe Debt Management set up fees only apply if we are able to get your debt agreement approved. We have a strict policy that if we can't help you, we don't charge you. Our set up fee covers the time we spend contacting your creditors and obtaining all relevant information. We also prepare and explain all paperwork to you. We have what we consider the fairest fee structure in the market - we only request an initial affordable instalment (based on your circumstances) so we can get started prcoessing your debt agreement. The balance of our set up fee is included in your agreement along with all your other debts.
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.
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 A.F.S.A and Safe Debt Management for the management of your debt agreement - these are included in the payments. These may 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 pay to become debt free!
For more information visit:https://safefinancial.com.au.com.au/apply/enquiry/debt or call one of our debt agreeement specialists on 1300 661 991.