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.