Part 9 Debt Agreement Changes

At Shaw Gidley, we agree that sometimes debt agreements are not the best option for people with insurmountable debts. There are other options that are available for people who are suffering financially: – Beware: do not refinance yourself to a credit with a higher interest rate to consolidate your debt. If you refinance credit card debt, make sure you don`t find any other credit card debt after – cut off the card until you`ve paid off the consolidated debts. 2- From June 27, 2019, all debtor agreement managers will also have to position themselves in an external dispute settlement system: if your creditors vote in favour of rejecting your debt contract, you may be able to resubmit another proposal. The new filing depends on the reasons for rejecting the proposal and the possibility of reaching an alternative agreement with your creditors. However, once the proposal has been rejected, the debt will be revived and your creditors will be able to resume their recovery activities against you. If no proper agreement can be reached with your creditors, you should consider alternatives such as bankruptcy. A debt contract is not the same as a debt consolidation loan or informal payment agreements with your creditors. With a debt contract, your creditors agree to accept a sum of money that you can afford. You pay this over a certain period of time to pay off your debts.

You should get some information about entering into a debt contract and your alternatives when you first address a debtor contract administrator or another party that offers access to debt contracts. It must be at least 5 days before the debt agreement is reached and, in our experience, it may be many months before a debt agreement is actually proposed. They must also be informed in writing at least 1 day before the conclusion of the debt agreement. This communication should cover the details of your specific agreements, including the fees you will pay, as well as some general information about debt agreements and alternatives. Information on debt contracts can be obtained directly from the Australian Financial Security Authority at www.afsa.gov.au. Critics have found that this increase is due to increased aggressive marketing tactics by debt subcontractors and the implementation and inclusion of “inappropriate sales techniques.” If you are really unable to pay off your debts when they mature, you may be able to agree with your creditors to pay a reduced amount, defer certain repayments, reduce the interest rate and/or reduce your repayments.