A debt contract is mentioned in your credit report for at least 5 years and affects your ability to obtain other credits during this period. If you have a poor credit rating and lenders no longer give you credit, a debt contract is a way to pay off your debts earlier and improve your financial situation over time. Many lenders can only accept your application if you have been released from the debt agreement for up to two years. No, although debt contracts are managed in accordance with bankruptcy law, they are an alternative to bankruptcy. However, by submitting a proposal, you are committing „an act of bankruptcy.“ In addition, some of our lenders may review your application if you are discharged after one day of Part 9 debt contract. It is an agreement between you and your creditors, that is to say to whom you owe money. A Part IX debt contract is a formalized and legally binding agreement between you and your creditors to repay debts. These debt agreements are overseen by the Australian Financial Security Authority (AFSA). The terms of these debt contracts may vary due to personal circumstances and the unpaid debt of their creditors.
For more information, click here on the AFSA website. In addition, we manage all payments for you once your agreement is activated. We make payments to your creditors quarterly for the duration of your agreement with the funds you contribute to our trust account. We`ll also send you quarterly progress reports so you can see what you paid and what you still have to pay to be debt-free! A Part IX debt contract is a legal agreement with your creditors to repay your debts at a reduced rate that you can afford. This is a binding agreement for both parties, which falls under Part IX of the Bankruptcy Act. That doesn`t mean you`re going bankrupt. You must continue to pay these loans directly to your creditors. If you feel trapped by rotten debts, you may have heard of Part IX debt agreements (or „part 9 of debt agreements“).
The conclusion of a Part IX debt contract is seen as an alternative to the declaration of insolvency. These agreements are often presented as a debt consolidation product that offers a „simple issue“ and a „simple payment plan“ to satisfy creditors. That is not entirely true. There are many myths about Part IX of debt contracts and whether they qualify you better for a car loan. Only demonstrable unsecured debts, such as medical bills, memory cards, credit cards and some private loans, can be included. 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. Debt contracts fall under Part IX of the Bankruptcy Act 1966.
The Australian Financial Security Authority (AFSA) is responsible for the management of the law and related regulations. A debt contract ensures that you will be protected from further legal action, including bankruptcy during your agreement on debts incurred. In principle, you are protected by bankruptcy law without going bankrupt. The first relevant date is the processing date, the date on which AFSA accepts your debt contract for processing and sends it to the creditors who will be put to the vote.