A debt agreement refers to a binding agreement that is contained in Part IX of Australia’s Bankruptcy Act of 1966. It is entered into between the debtor and the creditors in which these creditors will accept a certain sum of money that debtors can afford to pay as repayment. It is one of the best and the most effective solutions for people who are grappling with chronic debt.
When you are planning to propose a debt agreement to your creditor, you will have to decide on the administration of the agreement. Will you administer it yourself or will you hire an administrator to assist you through the process? If you have decided to a point a debt administrator when you are filing for bankruptcy and considering a negotiated solution, you need to decide on the best administrator that you will appoint. There is a list of registered debt administrators so figuring out the legitimacy of whatever persons or entities that you will appoint shouldn’t be a problem.
Before you make the decision on who you will work with, you need to talk to several administrators in order to determine amongst other things, their credibility, professionalism and experience in executing successful debt agreements in Australia. Look at the initial contact as well as the administration fees that they are charging for their services. You also need to look at the list of services which they provide. These can include the following:
- Offering you accurate information on the various options available for dealing with debt that is unmanageable along with the consequences involved in choosing each of the options. For example, they can advise you to declare bankruptcy or go for the debt consolidation loans;
- They can help you access hardship assistance with the various financial institutions involved;
- You will get assistance as you prepare a budget;
- Administrators talk to the creditors and get the latest details on how they can prepare the debt agreement proposals;
- They talk to your creditors in order to let know of your financial predicament and explain to them why they should support the debt agreement proposal;
- They will prepare and lodge the agreements with the Australian Financial Security Authority;
- Get ongoing guidance and support on the debt agreement
- Whenever your financial circumstances change, they prepare a variation proposal for you; and
- They will offer responses on your behalf to any reasonable requests that have been issued by the creditors.
Whether you are filing for bankruptcy or entering into debt agreements, you will need to pay administrator fees. These vary from one administrator to another. The two main types of fees that will be charged by the debt agreement administrators include the following:
- Fees for the setup of the debt proposal or the setup fees; and
- Fees for carrying out an ongoing debt administration
Some administrators may charge fees for additional services taken on your behalf such as the cost of preparing proposals for your creditors and talking or negotiating with the creditors. The fees will be applicable whether the creditors vote on and accept the proposal or not. Find more at Debt Mediators.
When signing debt agreements with the administrators, these fees must be clearly displayed in the agreement proposal. There are additional ongoing administration fees that may be charged depending on the administrator. These must be clearly displayed in the proposal in terms of percentages or total dollar amounts. Visit them online at HTTP://WWW.DEBTMEDIATORS.COM.AU/.