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FAQs

Frequently Asked Questions (FAQs)

What is a Debt Agreement?

A Debt Agreement is binding agreement between you and your creditors where they agree to accept a sum of money which you can afford. Debt agreements can be for business or personal.

How will a Debt Agreement help me?

It will allow you to deal with unmanageable debts by freezing your provable unsecured debts and any Interest so you can repay your creditors over an extended period of time in an affordable and practical way. Use a debt agreement calculator to view repayments based on affordability.

What are unsecured debts?

Unsecured debts are debts which have NO security attached to them. This includes personal loans, credit cards, bills, tax debts. A Home Loan or a Car Loan ARE NOT unsecured debts.

Do I have to disclose all Debts?

Yes, all Debts have to be disclosed this includes both you secured debts, unsecured provable debts, leases, hire purchases and any rentals. A Debt Agreement will only deal with unsecured provable debts.

Do I have to disclose all my Income?

Yes, all income that you receive such as all paid employment, CentreLink, Child Support, income from investments and any interest earned. All debt agreement income limits must be disclosed.

Who can propose a Debt Agreement?
  • You can propose a Debt Agreement if you are Insolvent
    (you cannot pay your Debts as they fall due).
  • Have not been Bankrupt or had a Debt Agreement, or been party to a
    Part X of the bankruptcy Act in the past 10 years.
  • Have Unsecured Debts, Assets and after Tax Income for the next
    12 months all less than the threshold limits

Will I be bankrupt if I propose a Debt Agreement?

No, a Debt Agreement is the alternate to bankruptcy. However doing a Debt Agreement means you commit an act of bankruptcy.

What are the consequences of doing a Debt Agreement?
  • You commit an Act of Bankruptcy.
  • Your name will appear on the National Personal Insolvency Index
    which is a public record.
  • Listed with credit reporting agencies for up to 7 years which will affect
    your ability to obtain credit.
  • Secured Creditors (e.g. Car Loan) may sell your assets
    (e.g. Car) if you default on payments to them.
  • You cannot obtain credit solely or jointly without disclosing that you are
    party to a Debt Agreement.
  • You cannot carry on business under an assumed name without disclosing
    to all people you deal with that you are party to a Debt Agreement

Can my creditors reject my Debt Agreement Proposal?

Yes, creditors have the right to reject your Debt Agreement Proposal. It is important to make a full disclosure of your current Income, Debts and Asset. There is no guarantee that creditors will accept your proposal.

What happens if my proposal is rejected?

If your Debt Agreement is rejected, it is possible to resubmit a new proposal. Usually creditors will consider a possible resubmission if additional information comes to light or there is added benefits to creditors to reconsider a new proposal.

How does my Debt Agreement get accepted?

Your Debt Agreement Proposal gets accepted if the majority dollar value of creditor’s votes is in favour of you Debt Agreement Proposal. This means that over 50.01% of the dollar value vote in favour of the Debt Agreement proposal.

What is the process of doing a Debt Agreement?
  • Must read the prescribed information along with this frequently asked
    question and Debt Agreement Pamphlet and understand the alternatives with
    dealing with your debts.
  • The Debt Agreement is lodged with AFSA (Australian Financial Security
    Authority; a government department).
  • AFSA sends your proposal to creditors for voting.
  • Creditors vote on your proposal within 35 working days of AFSA accepting
    the proposal.
  • AFSA checks and counts the votes and the outcome is notified to you in
    writing of the outcome.

Does AFSA have to accept my proposal?

No, the AFSA can reject your proposal if they believe that a Debt Agreement is not the best option for you, in the best interest of your creditors or find you ineligible to lodge a Debt Agreement.

Do I have to pay Debt Negotiators a fee for lodging my Debt Agreement?

Yes, there is an up-front fee before the Debt Agreement is accepted for processing. There is also an administration fee included in your minimum monthly payments.

Do I get a refund if my proposal is rejected?

No, if your proposal is rejected by your creditors, Debt Negotiators will stop scheduled payments immediately. Debt Negotiators will only refund where AFSA rejects the Debt Agreement for processing because Debt Negotiators was at fault.

What happens when my Debt Agreement is accepted by my creditors?

All your unsecured creditors will be bound by the Debt Agreement. This means any or intended collection action, legal action will cease. Your creditors will be paid under the Debt Agreement.

Do I have to pay my creditors once my Debt Agreement is accepted?

No, your creditors will be paid through the Debt Agreement. They will receive Dividend payments from Debt Negotiators as scheduled by your proposal.

What is a Credit File?

A credit file is a data base which holds all information gathered about you or your organisation that is relevant to a credit provider in determining whether you are credit worthy.

How do I get a copy of my credit file?

You are entitled to a free copy of your credit report. This can be requested from the 2 major credit reporting agencies Veda Advantage and Dunn and Bradstreet.

What can be on my credit report?

Personal information such as your name, date of birth, driver’s license number, current address and employment. Financial information such as overdue accounts, default notices, applications for credit, current credit providers and public and court proceedings that you may have. Commercial information such as directorship is also listed.

Who are the credit reporting agencies?

Veda Advantage: www.vedaadvantage.com | Phone: 1300 762 207
Dun & Bradstreet: www.dnb.com.au | Phone: 132333

How does my credit report affect me?

Credit providers use the credit reporting system to determine your credit worthiness. Defaults, overdue payments and court proceedings on your credit file may increase your credit risk to credit providers and subsequently result in rejection for credit.

How long is information held on my credit file?

Court Writs & Summons – 4 years
Payment defaults, Court Judgments & Credit enquiries – 5 years
Bankruptcy, Debt Agreements, Personal Insolvency Agreements, and Clearouts – 7 years
Directorships – 10 years

What information on my credit report do lenders use?

Credit providers will use information such as defaults (paid and unpaid), overdue payments (paid and unpaid), bankruptcies and the number of enquiries when assessing an application. Credit providers will also use your personal information listed on your credit file.

Can I repair my credit file?

If you believe that you have genuine unfair listings or disputes on your credit file / information that you believe should never have been listed then you can have it removed from your credit file. Debt Negotiators team have the expertise and contacts to remove unfair and disputable listing from your credit file / information.

How long does this process take?

The process, whether your credit repair application is successful or unsuccessful will take approximately 35 working days.

Do you provide guarantee to fix my credit file?

No, we cannot guarantee that you application will be successful. If your application is unsuccessful we will review your application and attempt to resubmit it for you.

How successful is your company at removing repairing credit files?

We have a team of people that have the knowledge, contacts and expertise in assisting with dealing with your credit repair solution. This expertise has allowed us to have a higher than average success rate with dealing with the removal of unjust listings on credit files.