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Full name Part IX Debt Agreement
A binding agreement between you and your creditors under the legislation, Part IX of the Bankruptcy Act, as an alternative to Bankruptcy

BENEFITS OF DEBT AGREEMENTS

• All interest is frozen on every unsecured debt you have
• It stops creditors hassling you and protects what you have
• Does not require a good credit history
• Everything becomes more affordable as payments are based on a realistic budget that you can afford
• One payment per pay via direct debit
• Payments can be made in line with how you're paid - weekly, fortnightly or monthly
• So long as you stick to your payment plan, you are protected by the Part IX legislation
• Agreements usually run over three to five years
• Debt Agreements do not affect your right to run a business or company
• You can travel overseas freely
• Not all creditors need to agree to the Debt Agreement (only 50% of debt value)
• Once under the protection of a Debt Agreement, you can keep your family home and secured assets like Motor Vehicles
• You will keep all Windfalls, Inheritances or Compensation Payments you may receive after the Debt Agreement has been approved

LIMITATIONS OF DEBT AGREEMENTS

• Not all Debts may be included such as secured Debts
• If you wish to keep Cars Houses etc, you must keep payments up to date
• You may not qualify if you have too much Debt
• You may not qualify if you have been Bankrupt before
• You will appear on the NPII and Credit reports for 5 years maybe more
• If you trade under a business name, that isn’t your own, you have to inform people who you deal with that you are in a Debt Agreement
• While a Debt Agreement is covered under Part IX of the Bankruptcy Act to offer an alternative to Bankruptcy, it is still considered an act of Bankruptcy and may affect certain employment or work license arrangements. Check with us
• If more than 50% of Creditors vote no, they can reject the offer
• If you do not qualify for a Debt Agreement, or it is not approved, or you need an industry license for your job, an Informal Arrangement may be a better option for you.

Informal Arrangements are a negotiated payment plan for your personal loans, credit cards and old debts. They will be negotiated by the administrator with your creditors, on your behalf. It is not a loan, it is a payment plan negotiated for you and administered by Debtrite.

BENEFITS OF INFORMAL ARRANGEMENTS

• Does not require a good credit record
• Payments are negotiated within your budget and can be made in line with how you're paid - weekly, fortnightly or monthly.
• It will generally stop the harassing calls
• In a lot of cases interest is substantially reduced or frozen on your debts
• No limitations on income, property and other asset ownership
• Informal Arrangements do not affect your work qualifications or licenses
• You make a single Direct Debit per payment cycle to cover all your liabilities

You will have one automatic payment you must maintain that is conveniently structured to coincide with your pay cycle. The administrator will then distribute the payments to your creditors on your behalf. There isn't a fixed term, as this will be determined by your budget and the negotiations we do with your creditors.

We will minimise the interest you are paying on your credit cards and personal loans as much as possible, and sometimes even get it frozen. Outcomes are designed to be affordable and are based on your current situation. We will do a budget with you, to make sure your payment plan is sustainable.

Informal arrangement are generally accepted by creditors, when there has been a good reason for you falling into financial hardship. Life events such as sickness, loss of employment or income, relationship breakups and accidents are common acceptable causes of debt Hardship. There is no limit to the amount of debt or income you may have, but you must be in Financial Hardship.

Your payments will have to commence before the Negotiation can start, so that sufficient funds will be available to pay the negotiated payment plan after we have approval.

LIMITATIONS OF INFORMAL ARRANGEMENTS

• You are not protected by Government legislation, so creditors may make changes or contact you if you fall behind
• Payments may have to be continually re-negotiated (Our Job)
• Creditors may refuse to negotiate (but administrators will try to work around this)
• Missed creditor payments now show on your Credit Report for 2 years
• Interest or fees may accrue during the Negotiation process
• Creditors will not allow a surplus of Funds in your Budget

It should be noted that communicating with your administrator usually resolves issues around creditors contacting you.

When all else has failed, Bankruptcy can offer you a chance to start again
It is best to realise that Bankruptcy is not designed as a punishment but as a protection and means to allow you to get a fresh start. If you are facing a situation where there is no money left to live on once all the bills are paid and it is not possible to make a payment plan, then Bankruptcy provides an opportunity to start again.

Before deciding on this course of action, you should refer to the Government website Australian Financial Security Authority. On this site you will see details of all the outcomes of Bankruptcy.

BANKRUPTCY QUICK FACTS

These are some of the facts you need to be aware of -

• You will no longer be able to act as a Company Director
• Overseas travel may be affected and you must apply with good reason to leave the country
• You will still be able to run a business as a Sole Trader or partnership
• If you own a home or have a share in property, this could be at risk of being sold. Speak to one of our Business Partners to discuss strategies that could help you keep the family home
• You can keep a motor vehicle up to a certain value (see the latest value from AFSA)
• If your car is worth more, you can normally opt to pay the difference to keep it
• You can keep tools of trade up to a certain value (see the latest value from AFSA)
• You can keep your household items and furniture
• Your superannuation is generally protected
• While existing debt repayments stop, you must pay 50% of all income over a pre-set limit (determined by number of dependents you may have).
• Income included in this threshold is Tax Returns, Termination Payments, Inheritances and Windfalls
• You may need to complete income information forms every year
• You must supply all paperwork and answer all question asked by the Trustee that is appointed for you.
• The Trustee may ask for more information at any time
• Not all debt will be removed. Some of these include HECS and HELP debts and Child Maintenance
• Any debts created after the date of your Bankruptcy cannot be added

Debt Consolidation generally refers to a Loan that will combine a multiple of loans, cards and Debts into one Loan. It needs to reduce your monthly payments into one that is much more affordable and convenient.

But you must act early. You need to get on top of a developing financial problem before payments start running late and your credit is starting to slip.

It may be via a Personal Loan or Consolidated into a Home Loan. If you leave it too late and your credit is affected, you will find that the Interest rate will increase, set up costs increase and you may have difficulty in obtaining the loan amount you may need or want. Your options become more restrictive the more difficult your financial position is. It can still be fixed, but it costs more to do so.

If you have taken out a Payday Loan ( EG: Money Me, Wallet Wizard, Cash Converters) we have found you will not be able to use a Personal Loan to Consolidate your debts. Having a loan from a pay day loan company showing on your credit file, generally prevents you getting approval for a low Interest Personal Loan. However Home Loan Debt Consolidation is still possible.

So needless to say, the earlier we can address a Debt problem the Better. Do it before you get desperate enough to apply for a Pay Day Loan.

Early action on Debt Consolidation, may even see you able to get cash out for other purposes.

If you have left it late, contact us as quick as possible to start on the solution. Generally the Debt Hole is only going to get deeper from here.

Things that will effect your ability to Consolidate your Debts into a Personal Loan.

If your cards have gone over Limit, Repayments are late, there is unpaid Tax Bills, you are self employed and haven’t done your tax returns, if you are newly employed or in Business you will need to look at other Options. See the next section on Specialist Lending or go back to Debt Agreement and Informal Arrangements.

An option if you have equity in your home, is to use a specialist home loan lender.

If you have been knocked back by the banks, that is not the end of the story. The reasons may be many. Do you have a blemish on your credit report. Are you self employed with not a lot of financial records. Do you owe money to the Tax Department. Have credit cards been over the limit or late. Have you just been spending a lot of money lately. All of these situations plus a lot more will require a Specialist Lender. This is even the case when you may have plenty of Equity in your home and the new payment plan puts you in a much more financially secure position.

At Money Buckets we have been working outside the constraints of traditional Bank Lenders and have developed relationships with Lenders that see things a little differently. They take a more out of the box approach to their Lending criteria. A more common sense approach.

The Banks hands are tied by regulated Credit Policy, which is inflexible. Even though you may have been a customer for a long time, if your circumstances are not to policy, it’s a NO. They can't help you. These are the rules, for what is called a Deposit taking Institution. That’s anybody that holds people money in a bank account. They are not allowed to take risks.

There is however another alternative and it is called a Non Conforming Home Loan. There are a variety of Lenders who specialize in this Non Conforming area and the Interest rates they charge have been becoming more and more competitive. Most Brokers will not get involved in this Lending, due to the amount of work and expertise involved in getting one of these loans approved.

However, Money Buckets has a lot of experience in this area and simply build a Fee for service into the home loan, to cover the additional costs of providing this service. This is paid by the bank when the home loan settles. That way, the fee is only paid if Fast Debt Help can achieve a positive solution for you.

The process when applying for a Non Conforming Home Loan is a little different to that of a Traditional Lender. Money Buckets needs to submit an application signed by you, with all required documentation and loan papers first, before we can quote an interest rate or repayment amount. It is then up to you to accept or reject this once we have an answer and offer. By law we must put you in a better position overall, before we can proceed with a loan, but no firm interest rate or repayment amount can be quoted, until after an application has been assessed. We can, however, give you a guide beforehand. It is up to you then to accept or reject the offer.

In many instances Money Buckets customers, who have found themselves needing a non conforming Home Loan, may have still built up too much Debt to refinance. This might be Credit Cards, Store Cards, Personal Loans, Tax Debts etc. To facilitate the approval of a new Home Loan it may be considered necessary to negotiate with your creditors to reduce the outstanding debt, to fit into what can be approved with the new home loan. The same Debt Negotiation may be necessary if your budget means you can only afford to pay a certain amount as a repayment and the loan needs to be less.

Money Buckets is affiliated with Debtrite, a specialist Debt Negotiation Company that will negotiate lump sum settlements on your outstanding debts, paid with the proceeds of your new loan. In many Instances this can save you thousands of dollars. This alone can make a big difference to your prospects of consolidating your debts into a home loan.

Once Money Buckets takes on your case it is imperative that you do not negotiate with your creditors directly as this will prevent us from obtaining the best possible outcome for you.

Money Buckets takes a personal approach to Non Conforming Lending. We will work with you to obtain the very best outcome for your Financial Well Being. Take the time to get it right, this is the most important thing you can do to remedy a difficult financial position. Providing your consultant with all the required documentation in a timely manner will help speed up the process.

Let Money Buckets turn that No to a Yes!

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• What to do if I have lost my job and have debts
• How do I repair my credit?
• What happens once I am in a Debt Agreement?
• What happens once I am Bankrupt?
• How to deal with Debt Collectors
• Bankruptcy and Travel Visas
• Joint Debts and Partners
• What happens when I am Bankrupt?