Debt Life Line

1. An informal debt agreement.

A Common Law Debt Agreement, outside the Bankruptcy Act 1966, offering creditors settlement over time by an affordable regular payment. These agreements are usually made by persons who have:

• Been bankrupt in the past 10 years but have fallen into difficulties again;
• Had a previous formal debt agreement or personal insolvency agreement terminated;
• Executed a Section 188 under Part X of the Bankruptcy Act.
• Do not meet the thresholds pertaining to formal debt agreements;
• Debt levels do not warrant a formal debt agreement.

2. Hardship Application – Uniform Consumer Credit Code.

• Where insolvency is temporary and can be rectified by altering the agreement with the lender. Applicants should have a clear perception that their circumstances will change for the better.

3. Debt Agreement – Part IX Bankruptcy Act 1966 (as amended)

A formal agreement proposed by the debtor to all creditors offering a settlement, over time, and at a regular rate of payment that can be afforded.

Regulated by federal legislation and has the effect of binding both debtor and affected creditors to the obligations imposed by the agreement, if accepted by creditors.

Provided a debtor maintains payments as agreed the understandings remain in place however a creditor may terminate a debt agreement if payments are not maintained; or for any other reason. Creditors maintain broad rights to terminate agreements.

Usually results in the appointment of a federally registered Debt Agreement Administrator to monitor the obligations, receive contributions into trust from the debtor and disburse monies to affected creditors.