Yes, your creditors have the right to reject your proposed debt contract. It is important to make all your income, debts and assets known. There is no guarantee that the creditors will accept your proposal. Bankruptcy is the formal process that they are declared unable to pay your debts. Ted and Josie are married and have four children. Ted works as a salesman and earns $25,000 a year. Josie worked as an administrative employee, but this work ended a few months ago. Since then, it has been impossible for Ted and Josie to keep pace with their credit repayments. Ted and Josie feel that they will continue to slide backwards and that they will never catch up. Ted and Josie are considering bankruptcy. Then you`ll see an ad saying, «If you`re struggling to pay your debts, there`s a possibility you can release without going bankrupt! Call me now. We work on your budget and present you with options at your disposal. Beyond Debt can help you if you have a debt of more than $8,000 and you meet the legal criteria: 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

It is quite common for debtors to be forced to stop paying their creditors and pay pre-feeding costs. Keep in mind that there is no guarantee that your creditors will say yes to the proposed debt agreements, and if you stop paying, you may find yourself in a less favourable position. As a general rule, you will not be offered a refund of the administration fees paid if the proposal is rejected. A debt contract is for people with lower incomes who cannot pay what they owe. But there are consequences. An unsecured liability is a liability that is not covered by security or assets, i.e. it does NOT have related security. For example, unsecured debts are credit card debts, private loans, invoices or tax debts. A home loan or auto credit are NOT unsecured liabilities because they are covered by an asset. Debt negotiators can help you enter into a debt contract with your creditors and find a solution that will help you avoid bankruptcy. We help you enter into informal and formal debt contracts, including Part 9 of the debt agreements (also known as Part IX debt contracts). In our experience, most creditors want to receive at least 60 cents in dollars.

For example, if you owe $100,000 in debt, creditors want to receive at least $60,000 (depending on the costs and management fees of the debt contract). A Part 9 debt contract only affects your demonstrable unsecured debts (and interest). Before you opt for a bankruptcy application or a debt contract, talk to a financial advisor.