If you have debts up to your neck and you don't think you have the capacity to pay your creditors, then you should apply for debt agreement. Debt agreement is a legalized agreement between the creditors as well as debtors that is under the Australian Bankruptcy Act. The act was first introduced in 1997 which aims to help debtors get out from their debts by letting them pay the amount that they can afford to their creditors.
A registered debt agreement administrator (RDAA) manages the debt agreement and its role is to receive the money from the debtors and distribute it to the creditors. This often prevents disputes and untoward circumstances from happening when both debtors and creditors meet. The debt agreement administrators work under the Insolvency and Trustee Service Australia (ISTA).
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 plan to enter on a debt agreement and you are approved, then you will definitely end up with a notation on your credit history. This means that while your debts are reduced, you will not be allowed to borrow money within a period of seven years. Moreover, unlike bankruptcy, you will not be given a clean slate on your financial status.
The debt agreement administrator is audited yearly by the Insolvency Trustee Services Australia in order to make sure that the system runs smoothly. Although the main objective of this particular Act is to lessen the numbers of Australians filing for bankruptcy, it catapulted another result otherwise. This means that, to date, more and more people are in debt because some are encouraged to go on debt agreement.
A registered debt agreement administrator (RDAA) manages the debt agreement and its role is to receive the money from the debtors and distribute it to the creditors. This often prevents disputes and untoward circumstances from happening when both debtors and creditors meet. The debt agreement administrators work under the Insolvency and Trustee Service Australia (ISTA).
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 plan to enter on a debt agreement and you are approved, then you will definitely end up with a notation on your credit history. This means that while your debts are reduced, you will not be allowed to borrow money within a period of seven years. Moreover, unlike bankruptcy, you will not be given a clean slate on your financial status.
The debt agreement administrator is audited yearly by the Insolvency Trustee Services Australia in order to make sure that the system runs smoothly. Although the main objective of this particular Act is to lessen the numbers of Australians filing for bankruptcy, it catapulted another result otherwise. This means that, to date, more and more people are in debt because some are encouraged to go on debt agreement.
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