A debt contract (also known as Part IX Debt Agreement) is a formal way to settle most debts without going bankrupt. Unfortunately, there are no quick fixes to managing uncontrollable debt. Filing for bankruptcy involves many requirements and restrictions, such as the sale of assets by an agent, monitoring your income, losing certain commercial licenses and abandoning your passport, your credit score is a great success (to name a few). Through a debt contract, you are in principle asking your creditors for a fair path by offering them your best offer. In this way, you can keep assets with shared equity up to the value of the asset limit (more information – contact Safe Debt Management). You will not have your income monitored and you will not have to hand over your passport. It is an agreement between you and your creditors, that is to say to whom you owe money. AFSA sends the proposal and explanatory statement to your creditors and asks them to explain their debts in detail and vote on the proposal. Debt contracts are regulated by the Australian Financial Security Authority, known as AFSA. For more information on debt contracts, bankruptcy contracts and private insolvency contracts, visit the AFSA website at www.afsa.gov.au. All debt securities in effect before June 27, 2019, managed by a non-registered debtor or administrator, i.e.
a person who is not legally admitted, will be managed by the official agent on September 27, 2019. Affected debtors should consider appointing a registered debtor manager by September of this year. Bankruptcy is the formal process that they are declared unable to pay your debts. A debt agreement will enter into force if the debtor`s proposal is accepted by creditors. In the event that the proposal is dealt with by holding a meeting of creditors, the proposal will be adopted by the creditors who adopt a special decision (majority in number AND at least 75% of the value of the creditors present and voting). If the proposal is processed by the official beneficiary who writes to creditors, the proposal is adopted if the creditors make up a majority of the number and at least 75% of the value of creditors who respond before the expiry of the deadline (25 working days after the adoption of the proposal) and declare that the proposal should be adopted.