Get Debt Free | Bankruptcy | Debt Consolidation | Specialist

What does this mean?

When your agreement is drafted, we try and assess the likelihood of your proposal being accepted, however, we can never guarantee a result as it is up to the creditors to accept your proposal.

We can always re-submit your proposal if we feel you are able assess their concerns.  However, if the proposed dividend in your proposal was too low (ie it didn’t meet your creditor’s expectations) there is probably no point to resubmitting the proposal as they would most likely reject it again.

If your proposal is rejected you may need your other options which may include:

• An informal arrangement with your creditors (debt management); or
• Bankruptcy

What do I need to do next?

• Don’t forget to advise us if you have any changes in your circumstances
• Ensure that you put aside sufficient money to pay your agreed contributions as stipulated within your proposal
• Ensure you keep to your budget (this will ensure you successfully complete your agreement)

How will my monthly contributions be taken?

All contributions must be made by direct debit or salary deduction. We don’t accept payment by any other method. It is critical that your contributions reach us before the due-date, otherwise you will fall into arrears which will need to be reported to your creditors and could lead to your agreement being terminated.

It is your responsibility to make sure that the payments are made in time and in accordance with the agreement. If you have any concerns regarding this please contact us immediately.

What will happen to my home?

If you own your own home and it was properly disclosed in your proposal, it will be protected under the agreement (assuming you continue to make the required payments).

If you fall into arrears (ie you fail to make payments on time) your agreement may be terminated which could place your home at risk again (ie your creditors could force you into bankruptcy).

My proposal included the provision that I had to sell some assets – when should I do that?

Sometimes the agreement provides that you must sell an asset. If your agreement stipulates this requirement, we recommend that you place the asset on the market as soon as practical.

I continue to receive mail and phone calls from my creditors – what should I do?

Contact us immediately so we can contact that creditor that continues to call you.

Creditors are not permitted to contact you whilst your agreement is in place.

Will my lifestyle change whilst I am in the agreement?

We have drafted your agreement, so you will have sufficient funds to live comfortably. However, we haven’t allowed sufficient funds which would allow you to:

• buy new assets (such as new a car or household furniture); or
• go on luxury holidays

We strongly recommend that you place your budget on the fridge where you can see it daily so you can regularly review your expenditure. Remember not all items in your budget will be paid each month (like car registration, car insurance, car maintenance etc).

We therefore recommend that you put this money to one-side (or even a separate savings account) so you will have the funds available when you need to access them.

My pay date has changed so my contribution will be late – do you need to know?

If you need to change your pay date, please contact us immediately. If the funds are not in your account on the due-date you will be charge a dishonour fee and your agreement will fall into arrears.

What changes do I need to tell you about?

If there are any changes to your circumstances that could affect your ability to meet your obligations under the insolvency agreement then you should contact us immediately. You should also contact us if you receive any unexpected large payments such as inheritances as these could affect your insolvency agreement.

You should also ensure that you notify us of any address or telephone number changes.

What happens if I forgot to tell you about an additional creditor?

It would have been explained to your during the process of drafting your agreement that is was your obligation and responsibility to inform us about all of your creditors and it is an offence under the Bankruptcy Act not to disclose all creditors. We may need to refer it as offence to the Insolvency Trustee Service Australia for further investigation.

Additional debts may be included in the agreement, however, depending on the value we may need to contact all of your creditors and seek a formal variation to the agreement. The variation would need to be approved by the majority of creditors.

When do my creditors receive their dividends?

The agreement stipulates when dividends are to be paid. Most dividends are paid quarterly but check your debt agreement proposal.

What happens if I miss a payment?

If you miss a payment (or you are late in making a payment) and you do not make good the default within a 3 month period, you will be in statutory default of your agreement and your administrator will need to report that default to your creditors.

Your creditors may then seek to have your agreement terminated.

If your circumstances have changed permanently, ie your pay conditions have changed and you can longer afford the repayments, or your expenses have changed it may be possible to change the terms of the arrangement to reflect these changes through what is known as a variation. This would normally only be undertaken if there is a change in circumstances and requires the creditors’ agreement. It is important that such a variation to the terms doesn’t happen too quickly after the start of your agreement because you won’t have had the chance to demonstrate your commitment to the process and the creditors may question your bona fides.

If you have any doubts regarding the affordability of your payments it is vital that you contact us immediately so the consequences can be discussed and the risk of your agreement failing minimised.

If you wish to put forward a variation proposal you will need to resubmit supporting documentation to verify your changed circumstances.

I’m struggling to make the monthly payment what should I do?

If the situation is temporary we may allow you to make a reduced payment and make additional payments in the future to rectify the position. If however, the arrears are not made good within 3 months we will be required under law to report the default to your creditors which may lead to your agreement being terminated.

In the event you feel it will be a permanent problem we recommend that you contact us immediately as you may need to consider a variation.

What happens if I am statutory default and have received a notice – what does this mean?

You will be in statutory default if you have failed to make the payments you were required (on the due dates) for a consecutive 3 month period. Under the Bankruptcy Act your administrator is required to report that default to your creditors which may prompt your creditors to terminate your agreement.

If you are in statutory default we would strongly recommend that you clear the arrears as soon as possible. If you are unable to clear the arrears as your circumstances have changed permanently you may need to consider a variation of your insolvency agreement.

What happens if I’ve missed payments and received a statutory default notice and there is no solution?

Once we receive all of the information regarding your revised financial position then we will be able to advise on appropriate solutions, including a variation of your insolvency agreement.

If we do not feel a variation is appropriate you may need to terminate your agreement and consider your other options which may include bankruptcy.

Is it possible to finish my agreement early?

Yes you may finish your agreement early. All you need to do is make all of the required payments under your agreement. Therefore, if you pay a little extra with each payment you will finish earlier.

What is the process involved if I finish my agreement early?

As soon as you have made all of your payments you must notify us immediately. Within 5 working days of you making your last payment under your agreement we must notify the Insolvency Trustee Service Australia. ITSA will then update the National Personal Insolvency Index with the notation that you have completed your insolvency agreement.

You will then be released from all of your debts (which were outstanding when you entered into your agreement), even if your creditors received less than 100 cents in the dollar on their admitted claims.

Why would I vary the terms of my agreement?

You may wish to vary the original terms of your insolvency agreement if your circumstances have changed or wish to offer an early settlement to your creditors.

What does the process involve?

Before any variation proposal can be submitted to your creditors, your administrator must assess the viability of your offer before presenting it to your creditors for their consideration. If your administrator feels you are eligible for a variation, we will prepare a variation proposal, which will then be sent to you for your review and and approval. This must then be signed and returned by you before it can be submitted for voting with your creditors.

My variation has been approved by creditors – what happens now?

Following approval, creditors will be notified of the agreed change and you will be expected to adhere to the revised terms.

My variation has been rejected by creditors – what happens now?

Your original insolvency agreement will continue to be effective until such a time as it is completed or it is terminated.

If the variation was proposed as you were in arrears in payments then we will need to discuss your options and what steps should be taken next.