Debtstroyer Agreement FAQs
What is a Debtstroyer agreement?
A Debtstroyer Agreement is an informal agreement between one debtor and any number of creditors. Each debt is negotiated privately with your creditors to reduce your principal, freeze your interest and eliminate fees. Because it is done privately, the agreement isn’t noted on your credit file.
Will a Debtstroyer agreement affect my credit rating?
Your credit rating will not necessarily be hurt by your Debtstroyer Agreement as long as you keep up with your debt repayments. Falling behind on any repayment – not just a Debtstroyer repayment – can leave you with defaults and judgments on your credit file.
I am only on Centrelink payments, can I still enter into a Debtstroyer agreement?
It is still possible to enter into a Debtstroyer Agreement while you are on Centrelink benefits, as long as you can afford the negotiated repayment amount.
What debts can be included in a Debtstroyer agreement?
Any unsecured debts can be included in a Debtstroyer Agreement. These include credit cards, personal loans, utility bills and tax debts. Debtstroyer Agreements can also renegotiate your unsecured debts to fit in with a mortgage refinance or debt consolidation.
Can joint debts be included in a Debtstroyer agreement?
Joint debts may be included in a Debtstroyer agreement. However Debtstroyer can only negotiate your part of the joint debt on your behalf.
How much will I be required to pay under a Debtstroyer Agreement?
The Debtstroyer repayment amount will be calculated by looking at your income and expenses and seeing how much money you have left after your regular expenses are covered.
Your Debtstroyer Case Manager will aim to negotiate your debts down to the amount you can afford.
How do I make repayments on a Debtstroyer Agreement?
You will pay one regular repayment into a trust account and the funds will be distributed to your creditors according to the terms of your Debtstroyer Agreement.
Debt Agreement FAQs
What is a Debt Agreement?
A Debt Agreement is an agreement between you and your creditors. It is a legally binding agreement that must first be approved by your creditors before it is entered into. It typically involves you paying a regular sum for a certain period of time, for example over 3 or 5 years. You don’t take on additional interest on your debts beyond that which your creditors have accepted.
What's the criteria for a Debt Agreement?
You must be insolvent to enter a Debt agreement. That is, unable to pay your debts when they fall due. Your unsecured debts must be between $10,000 and $105,086.80. The value of your assets must also be beneath this amount. You also need to have regular employment and make less than $78,815.10 per year after tax.
Will a Debt Agreement affect my credit rating?
Your Debt Agreement will be marked on your credit file for a period of 5 years. during the agreement, your name will also be noted on the National Personal Insolvency Index. This may make it difficult to obtain further lines of credit during the agreement. However once your Debt Agreement has been repaid (typically after 5 years) your name is removed from the NPII and the agreement is taken off your credit file.
You can rebuild your credit score quite quickly once the agreement is repaid by ensuring you repay your debts in full and on time.
I am only on Centrelink payments. Can I still enter into a Debt Agreement?
You might still be eligible for a Debt Agreement despite being on Centrelink or pension payments, provided you can afford the regular Debt Agreement repayment.
What debts can be included in a Debt Agreement?
Just about any kind of debt can be paid off or become eligible to be settled through a Debt Agreement. Some of the many examples of eligible debts include unsecured personal loans, old or unpaid electric or gas bills, disconnected phone line bills, credit cards, Centrelink overpayments, mortgage foreclosures, and repossessed cars.
Are joint debts included in a Debt Agreement?
Yes. Joint debts may be included in a Debt Agreement. It is best to figure out how the other holder of joint debts plans on dealing with these debts before proceeding.
How long will my Debt Agreement last?
While the specific terms and conditions of each Debt Agreement are unique to the individuals and lenders involved, in general, a Debt Agreement lasts for 5 years.
How much will I be required to pay under a Debt Agreement?
One of the unique advantages of a Debt Agreement is that it will allow you to make regular payments that you can afford. The amount is typically related to how much you make and how much you need to spend per month. In other words, you will not be asked to take on more than you can handle with a Debt Agreement; they are designed to help you get out of debt rather than trap you further into debt.
How do I make repayments on my Debt Agreement?
A direct debit will be set up so your agreed contribution can be submitted under the terms and conditions of the Debt Agreement.
Can I repay the Debt Agreement early?
You can repay your Debt Agreement early with no penalty.
What happens if I cannot make payments part way through the Debt Agreement?
A Debt Agreement is a legally binding debt solution. As a result, if you are unable to honour the terms and conditions that you originally signed up for, your creditors may terminate the Debt Agreement and you might be forced into bankruptcy. On the other hand, people’s circumstances can and do change, and if you find yourself in a situation where you have trouble keeping up with the payments of the Debt Agreement, the administrator may suggest variations to your Debt Agreement. However, the suggested changes will need to be voted on by creditors in the same way that the terms and conditions of your original Debt Agreement proposal were created. If your changes are approved, then you will have a new legally binding debt solution that may make it easier for you to keep up with your repayment schedule.
Can I get a loan after the Debt Agreement has finished?
Once your Debt Agreement has finished, you will most likely be able to obtain personal loans again. This will naturally depend on the criteria of the loan and your assets and liabilities at the time you request the loan. If you find you are having difficulty securing a loan once you have paid out your Debt Agreement, Debt Rescue can refer you to Positive Solutions Finance. Positive Solutions Financeis a specialist in being able to source non-mainstream lending facilities for people in the ‘grey area’ of the finance world. They can help people get a loan of any amount using a network of affiliated partners.
Will I lose my home if I enter into a Debt Agreement?
Many people become worried about whether or not they will lose their homes if they enter into a Debt Agreement. The good news is that if your creditors accept your proposal for a Debt Agreement, it is not likely that you will have to resort to selling your personal property. If you decide that you want to keep your house, naturally, you are going to still need to keep up with all of your mortgage repayments.
What other options do I have other than a Debt Agreement?
The professionals at Debt Rescue will get an idea of your individual situation and walk you through the options best suited to you. You may be eligible for Debtstroyer agreement, Debt Rescue’s secret weapon against debt. A Debtstroyer agreement will allow you to renegotiate your debts into a simple achievable repayment without having the same effect on your credit file as a Debt Agreement. For more information contact Debt Rescue on 1800 00 3328.
What is Bankruptcy?
Bankruptcy is the legal process of declaring to your creditors that you don’t have enough money or value in assets to repay your debts.
What are the criteria to become bankrupt?
The minimum amount before you can declare bankruptcy is $5,000. However it is recommended you first try to speak with your creditors to sort out a payment arrangement or investigate alternative options. To discuss your situation further, Talk to an Aussie Who Cares™ at Debt Rescue.
What other options do I have?
Debt Rescue can walk you through the options best suited to you. You may be eligible for a Debtstroyer agreement or a formal Debt Agreement. Both of which allow you to repay your debt without the strict limitations imposed by bankruptcy. For all your options Talk to an Aussie Who Cares™ at Debt Rescue.
What debts are covered through Bankruptcy?
Should you declare bankruptcy you must disclose all your debts in a Statement of Affairs. Your Bankruptcy Trustee will determine what is a provable debt and what is not. Common examples of provable debts include personal loans, credit cards and the provision of goods and services obtained on credit. If your home loan is secured, your creditor has the right to repossess and sell the asset to cover your debt. Any shortfall from the sale of the asset can then be considered a provable debt. Non provable debts include penalties or fines imposed by a court, HECS-HELP debts and debts you incur after the date of bankruptcy.
How are my debts paid if I am bankrupt?
Once your bankruptcy has been approved a Bankruptcy Trustee will be assigned to your case. Your Bankruptcy Trustee will sell your assets such as your house and all the proceeds will be divided among your creditors. Your Bankruptcy Trustee will also mandate contributions from your income once you earn over a certain amount. Your income threshold is determined by your situation.
Can I keep my assets as a bankrupt?
You will be allowed to keep most household and personal items. Valuable jewellery, antiques and fine art might be sold by your Bankruptcy Trustee. You are allowed to keep work tools up to the value of $3550.
Will I be allowed to keep my house?
Generally not. Your house will be sold and the proceeds will go directly to your creditors. Where you own a share in a property, your Bankruptcy Trustee may sell your share in the property.
Will bankruptcy effect my employment?
In most cases, your bankruptcy will not affect your employment. However, an undischarged bankrupt cannot work in certain trades or professions due to restrictions imposed by professional associations or licensing authorities. These positions include a police officer or security guard, realtor and financial advisor. You cannot be a manager or a director of a company while you are bankrupt. Under certain circumstances you may continue to operate a business while bankrupt.
Will bankruptcy affect my income?
Your income will be capped depending on your situation (For example, the threshold for people with dependants is higher than the threshold for a single individual). Any money earned above the set threshold will become a contribution and be distributed among your creditors. If you are made redundant or receive a pay-out after losing your job, that money can also be made a contribution and distributed to your creditors.
Can I own a vehicle?
An undischarged bankrupt may own a vehicle up to the value of $7,200.
How long does bankruptcy last?
The period of bankruptcy generally lasts for three years. It can last for five or eight years under certain circumstances. It will be noted on your credit file for eight years.
Will it affect my credit rating?
You are allowed to apply for a loan or line of credit while you are bankrupt, however your success will be at the lenders discretion. You are not allowed to borrow more than a certain amount and there are restrictions on what you can purchase while you are bankrupt. Exceeding the set limitations can result in harsh penalties so be aware of what you can and cannot borrow.
Will I be allowed to borrow money or apply for credit once my bankruptcy has finished?
Yes. The bankruptcy will be noted on your credit file for seven years, which can impact on your ability to apply for credit successfully. However through Positive Solutions Finance, we have access to a number of affiliate lenders who will lend to individuals who are discharged bankrupts.
Will I be allowed to travel overseas?
You cannot travel overseas while you are bankrupt without permission from the court. Doing so without permission or staying for longer than your allowed time can result in your bankruptcy being extended to 5 or 8 years.