 
|
Home | Enquiry/Feedback/Complaint |
About Us | Trustees | Creditors | Debtors | Interim Relief | Bankruptcy | Debt Agreements | Personal Insolvency Agreement | Statistics & Research | Publications & Media Releases | Employment | Index
|
It is important to recognise financial difficulty early so that you can address the situation before it becomes unmanageable and you have to resort to options that you would otherwise prefer to avoid. Dealing with debt: Your rights and responsibilities is a government publication which gives you information on dealing with debts, debt collectors and disputes. The booklet is available through the Australian Securities and Investments Commission (www.asic.gov.au) or the Australian Competition and Consumer Commission (www.accc.gov.au). There are various options available to deal with unmanageable debts. Some are formal arrangements governed by specific legislation and some are more informal and usually based on agreements between you and your creditor/s.
You can contact your creditors directly or you can ask for help from a financial counselling service, a community legal centre, a registered trustee, a registered debt agreement administrator, a lawyer or an accountant. They will talk to you about your options and may speak to creditors on your behalf, help with budgeting advice or give you advice about other sources of government assistance. Contact details for financial counsellors, debt agreement administrators and registered trustees can be found on page 26 of this booklet.[Sources of financial guidance]
Declaration of intention to present a debtor's petition This stops your unsecured creditors garnisheeing your wages and/or the bailiff or sheriff seizing your assets to recover debts for a period of 21 days. It does not prevent a secured creditor from repossessing an asset. You could use that time to speak to your creditors, consider other options or seek advice. You do not have to become bankrupt after this period. You can only lodge one declaration every 12 months. Propose a debt agreement A debt agreement is a legally binding arrangement between you and your creditors which must be accepted by the majority (in value) of your creditors. You can offer to pay your creditors in instalments or with a lump sum payment which may be less than the full amount of your debts. You can also propose a freeze on your debts for a set time to let you get back on your feet. Your unsecured debts, assets and after-tax income must be under certain limits* to propose a debt agreement. If you ask a registered debt agreement administrator to administer your debt agreement, they will charge a fee. Further information on debt agreements can be found on page 6 of this booklet. [Debt agreements] Propose a personal insolvency agreement A personal insolvency agreement is also a legally binding arrangement between you and your creditors whereby you offer to pay them in full or part by instalments or a lump sum. Your offer must be accepted by a special resolution of your creditors. Unlike a debt agreement, there are no debt, asset or income limits to be eligible to propose a personal insolvency agreement. You must appoint a controlling trustee who will investigate your affairs and report to your creditors. Should your creditors accept the proposal, a trustee must administer the agreement. Further information on personal insolvency agreements can be found on page 7 of this booklet. [Personal insolvency agreements] Voluntary bankruptcy Where you are unable to come to an arrangement with your creditors, you can consider petitioning for bankruptcy. Upon becoming bankrupt your trustee will sell those assets that you are not allowed to keep, to repay your creditors to the extent possible. While you are a bankrupt, should you earn an after-tax income above a defined threshold* you will be required to pay half of the excess amount to your trustee for payment to creditors. You will be bankrupt for a minimum of three years. This period can be extended by the trustee under certain circumstances. After that period you are discharged from most of your debts. Further information on bankruptcy can be found on page 11 of this booklet. [Voluntary bankruptcy] Choosing the right option Every person’s circumstances are different. An option that suits one person may not suit another. In making your decision, it is important to be realistic about your current situation as well as what you expect to happen in the future. For instance, if you are thinking about asking your creditors for more time to pay the debt, or to pay by instalments, then you should make sure that this is something you will definitely be able to afford. If not, you may want to think about other, more formal options. The following pages provide more detailed information about the formal options, such as bankruptcy, that may be available to you. If you have any questions regarding any of these options, please call us on 1300 364 785 or visit our website at www.itsa.gov.au. ITSA does not provide advice on which option is best suited to your particular circumstances. You are encouraged to seek independent advice before making a decision. Refer to page 26 for where you can seek help and advice. [Sources of financial guidance] *For threshold limits and indexable amounts please see the current Indexed Amounts fact sheet or the ITSA website www.itsa.gov.au. |
| Page Last Updated: 01/11/2011 Contacts | Enquiry/Feedback/Complaint | Privacy Policy | Disclaimer & Copyright |
|
|
|
|
|
|
|