A debt agreement is a legal agreement created by a debtor and the creditor under the Australian Bankruptcy Act. This particular type of agreement allows the debtors to repay their debts in a lesser amount. Introduced first during 1997, this Act was amended in order to provide bankruptcy alternative to debtors who do not have the capacity to pay all their debts.
Debt agreement is managed by a registered and licensed debt agreement administrator The administrator is usually affiliated with the Commonwealth Government Department. What the administrator does is that he or she receives the money from debtors and distribute the amount to the debtor's creditors. Thus said, the clients do not deal with the creditors and this often saves a lot of time and heated arguments will also be avoided.
The advantage of applying for debt agreement is that minimum wage earners can get out from their debts even if they do not pay the entire money that they loaned from their creditors. Now if you decide to enroll in debt agreement, your RDAA will give you a full proposal which will then be submitted to the ISTA coupled with your financial statements. The ITSA will then assess your application and will see whether you are qualified to get debt agreement.
Before the ITSA will qualify you, the creditors will be called into the meeting and the full proposal of debt agreement made by the RDAA will be presented to them. The creditors need to agree first before you will be released from some of your debts. On the other hand, if they do not agree, then no action will be taken and you should continue paying your creditors that full amount that you owe them.
If you decide to enter in a debt agreement and you get your application approved, you will get a notation on your credit history. However, unlike the bankruptcy law, you will not be given a clean financial history so your debts will still reflect in your financial statements even if you have paid all of your debts. Moreover, you will not be allowed to borrow money for seven years after you have been granted with the debt agreement.
Debt agreement administrators are audited annually to make sure that they are following the system when it comes to making proposals for debt agreement. On the other hand, the purpose of debt agreement is to reduce the number of people in debt. Although this may be the case, the rise of people who file for bankruptcy has increased in recent years.
Debt agreement is managed by a registered and licensed debt agreement administrator The administrator is usually affiliated with the Commonwealth Government Department. What the administrator does is that he or she receives the money from debtors and distribute the amount to the debtor's creditors. Thus said, the clients do not deal with the creditors and this often saves a lot of time and heated arguments will also be avoided.
The advantage of applying for debt agreement is that minimum wage earners can get out from their debts even if they do not pay the entire money that they loaned from their creditors. Now if you decide to enroll in debt agreement, your RDAA will give you a full proposal which will then be submitted to the ISTA coupled with your financial statements. The ITSA will then assess your application and will see whether you are qualified to get debt agreement.
Before the ITSA will qualify you, the creditors will be called into the meeting and the full proposal of debt agreement made by the RDAA will be presented to them. The creditors need to agree first before you will be released from some of your debts. On the other hand, if they do not agree, then no action will be taken and you should continue paying your creditors that full amount that you owe them.
If you decide to enter in a debt agreement and you get your application approved, you will get a notation on your credit history. However, unlike the bankruptcy law, you will not be given a clean financial history so your debts will still reflect in your financial statements even if you have paid all of your debts. Moreover, you will not be allowed to borrow money for seven years after you have been granted with the debt agreement.
Debt agreement administrators are audited annually to make sure that they are following the system when it comes to making proposals for debt agreement. On the other hand, the purpose of debt agreement is to reduce the number of people in debt. Although this may be the case, the rise of people who file for bankruptcy has increased in recent years.
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