If you have entered into a debt agreement and your circumstances have changed and you can no longer afford to pay your payments, then don’t worry, you can choose from the following options:

• Vary your debt agreement; or
• Terminate your agreement.

Varying your debt agreement.

If you cannot afford to pay your debt agreement payments but you still want to continue with the agreement, you may consider a variation proposal. This option is appropriate if your circumstances have changed which now prevent you from paying the agreed payments. Some circumstances include:

• Losing your job.
• A drastic increase in living or household expenses.
• Having an additional dependant or family member to support.

You will need to provide evidence of your changed circumstances to your administrator before your administrator will be able to put forward a variation proposal to your creditors.  Your creditors will then have the opportunity to vote on your variation proposal.

If your creditors don’t accept your variation proposal, the terms of the original debt agreement will remain in place, so you may need to consider a termination of your proposal.

Termination of your agreement

If you are not eligible for a variation or your variation proposal was not successful then you will need to apply for a termination of your agreement. Your administrator will be able to prepare the necessary forms to initiate a termination of your agreement.  Once your debt agreement is terminated all of your unsecured debts (with interest) will be re-instated so you may then need to consider filing for bankruptcy.

At the Debt Agreement Advice Centre, we can help with you with a variation or termination of your debt agreement even if your debt agreement is being handled by another company.

Call our friendly and helpful advisors on 1800 653 485.

Bankruptcy can have many consequences but for most, the thought of eliminating financial burden can help overcome the stressful situation. Understanding bankruptcy and its impacts are essential when it comes to making correct choices for your future.
Myth 1. You can’t travel whilst bankrupt

Many people think being bankrupt blacklists you from traveling overseas. A bankruptcy trustee should let you travel overseas, as long as you have fulfilled all tasks you have been asked to do by your trustee and you have paid any compulsory income contributions. Your bankruptcy trustee will most likely ask for information such as how you are paying for the trip, your dates of travel and your travel destination. You do not need permission to travel within Australia.

Myth 2. Bankruptcy is expensive

Declaring bankruptcy through the government trustee is free unless you have to pay compulsory income contributions or you have assets which need to be sold.

Myth 3. You’ll lose everything in bankruptcy

Bankruptcy does not mean you lose everything. While owning assets, your trustee may need to sell them to pay your debts. In most cases, people can keep personal assets they own such as:

• Household furniture, appliances and sentimental items
• cash and bank account balances to cover daily living expenses (as long as it doesn’t exceed approximately $2,000)
• Motor vehicles to the value of $7,700
• Tools to the value of $3,750
• Superannuation, unless irregular contributions were made before bankruptcy to protect funds

We have over 10 years of experience in helping Australians overcome bankruptcy. If you would like to see how we can help you, please call our friendly Debt Agreement consultants at the Debt Agreement Advice Centre for expert advice debt consultants for expert advice on 1800 653 485 (toll-free).