The debtor has received information on other means of dealing with financial difficulties, as set out in the regulations; We believe that any reform should strike the right balance for creditors to take into account their interests, to recover their losses, and that debtors are certain of their financial well-being. At Worrells, we explain the effects of all private insolvency solutions, including the review of a bankruptcy agreement. There are a number of factors that influence how debtors are influenced by their decisions. For example, 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. A debt contract is not the same as a debt consolidation loan or informal payment agreements with your creditors. You can continue to pay your creditors during the processing period, the amount of debt included in the debt contract is the amount owed on the reference date. However, you should pay your secured creditors all the time, as these are not included in the debt contract.
2.7.15 Administrator compensation collection systems must be able to ensure that only the appropriate percentage is accepted at maturity. Systems must be put in place to ensure that overheads are recovered only through invoiced remuneration and are not considered separately as expenses. The collection of overheads in separate agreements, in addition to remuneration, is not permitted. Directors must therefore understand what a true «out of pocket» expense is that, if detailed in the proposal and creditors agree, can be recovered directly from funds held for an individual trust fund agreement, as opposed to overheads that can only be repaid by compensation. Creditors are contacted in writing by AFSA and invited to vote either in favour of supporting or rejecting your proposed debt contract. You are also asked to provide the amount of outstanding your account, to indicate whether the account is secure or unsecured, if your account is common or if there is a guarantor, or if you have other debts to that creditor. Have the ability (including knowledge) to perform a director`s duties satisfactorily with respect to a debt agreement; and you can run a business unless the terms of the agreement provide for something else. However, if you are acting under a company name or a supposed name, you must disclose the debt contract to anyone you are dealing with. 1.5.1 Amendments to the Act have introduced new requirements for a proposed debt contract that will be submitted to the official beneficiary. At the time of the presentation of the debt contract by the official beneficiary, a director must confirm this: the debt agreements are regulated by the Australian Financial Security Authority, known as AFSA.
For more information on debt contracts, bankruptcy contracts and private insolvency contracts, visit the AFSA website at www.afsa.gov.au. It is an agreement between you and your creditors, that is to say to whom you owe money.