FAQs

What is a debt agreement?

It is a legally binding financial arrangement with all of your unsecured creditors. Once accepted, you will be released from your unsecured debts. Your Administrator will manage your debt repayment schedule with the unsecured creditors.

Benefits of an Accepted Debt Agreement are:

1. All interest will cease
2. Action by your creditors to collect the debt will cease
3. Legal actions, wage garnishees and any other form of debt collection will cease
4. You can schedule debt repayment weekly, fortnightly or monthly based on your affordability

What fees do I pay the Debt Consultant?

An establishment fee is payable to the Debt Consultant. At ADAIS, the establishment fee is $950 and can be paid upfront or on an instalment basis. We also get a small commission from the creditors for managing repayment of the debt.

Debt agreements have no early payment fees or hidden costs.

Who is eligible?

A debt agreement can be proposed by a debtor who has:

1. Not been bankrupt, utilised a debt agreement or given an authority under Part X of the Bankruptcy Act in the last 10 years
2. After tax income of less than about $61,875.45
3. Unsecured debts of less than about $82,500.60
4. Property not exempt under bankruptcy valued at less than about $82,500.60

What is the process?

1. Assess whether a debtor is deemed eligible
2. Debt consultant will work out budget and prepare a repayment plan for the debtor
3. A proposal is submitted to the ITSA (Insolvency & Trustee Service Australia) by the Debt consultant
4. The creditors will vote on the proposal. The proposal becomes a debt agreement once more than 50% of creditors approve it.
5. Once a debt agreement is established payments can be made to the creditors periodically based on the agreed repayment schedule

What is ITSA?

ITSA stands for Insolvency and Trustee Service Australia. It is a government department responsible for reviewing your proposal to creditors and the registration and facilitation of debt agreements.

How long does it take?

Once ITSA has accepted the debt agreement proposal, the creditors will have up to 30 working days to vote on the proposal. During this period, you are under no obligation to pay your unsecured creditors.

Is a Debt Arrangement (Part IX) same as Bankruptcy?

Debt Agreement is an alternative to bankruptcy. It does not impose the same restrictions as bankruptcy and creditors may allow you to retain some of your assets or continue to operate a business.

What is insolvent?

A person is insolvent when he/she/they cannot pay all their debts when they fall due.

What if my debt agreement is rejected by my creditors?

ADAIS will notify you and discuss a second, alternative Debt Arrangement which is to be authorised by you. No additional set up fees will be charged is this instance.