Individuals who satisfy the following may be able to enter into a Debt Agreement (DA) without becoming bankrupt:
- Unsecured debts and assets are each less than $72,381.40 (indexed);and
- After-tax income for the next 12 months is expected to be less than $54,286.05 (indexed).
The process of entering into a DA involves submitting a proposal (similar to the PIA proposal) to the Insolvency and Trustee Service of Australia (ITSA). ITSA then sends the proposal to creditors to either accept or reject the agreement via a postal vote.
A DA Administrator is appointed to:
- Inform the individual of the consequences of entering a DA;
- Assist with the paperwork and lodgements with ITSA and if the DA is accepted, ensure the terms are carried out.
Acceptance of a DA means:
- That the debtor is released from all provable debts;
- All unsecured creditors are bound by the DA regardless of their individual vote;
- Unsecured creditors are unable to take further legal action in relation to the provable debts.
Contact our office to arrange an initial consultation.