As a general rule, fines are not demonstrable misconduct. This means that you must continue to pay them outside of your contract. If you get to a point where you are unable to pay your debts, a Part 9 debt contract can offer welcome relief. If you enter into such an agreement, your debts will be repaid for a certain period of time and the included creditors will stop calling while you are a party to a Part IX debt contract. Once you have your debt contract, you will have a clean slate on which you can rebuild your financial life. There are eligibility requirements that must be met in order for the proposed debt agreement to be adopted. After submitting your proposal to AFSA, the official recipient will evaluate the proposal and verify that it meets these requirements. If the proposal is considered non-compliant with these requirements or is not in the interests of creditors, it may be rejected by AFSA. 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.“ You may be tempted to enter into debt contracts to reduce your interest or simplify your repayments, but you can actually avoid your repayments without any real rigor. A debt contract is not really appropriate because it will affect your ability to get loans and other services in the future.
You may be able to refinance at a lower interest rate and/or consolidate your debt to make things easier. You may have ways to increase your income or reduce your expenses. For more information on options: Money Smart at www.moneysmart.gov.au. If you are struggling with debt, a debt contract may be the right solution for you. Safe Debt Management aims to improve your life and can help you get out of debt. You should get some information about entering into a debt contract and your alternatives when you first address a debtor contract administrator or another party that offers access to debt contracts. It must be at least 5 days before the debt agreement is reached and, in our experience, it may be many months before a debt agreement is actually proposed. They must also be informed in writing at least 1 day before the conclusion of the debt agreement.