Debt Fix Frequently Asked Questions (FAQs)

We look at all areas of your finances to suggest the most suitable way to tackle your debts. There could be a number of options for you to choose from, but ultimately the choice is yours.

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This will depend on how much you owe and how much you can realistically afford. We will be able to give you an indication but this will always depend on creditors freezing interest and other charges on your account.
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Please let us know if anything unforeseen happens whilst you have a debt agreement. Depending on the situation we should be able to re-negotiate your offers with creditors.
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If you have a debt problem it is likely that your credit rating will already be affected. Debt Agreements are recorded on a public register and appear on your credit file for 7 years.
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It is always our priority at Debt Fix ® to protect your property and allowances will be made within your income and expenditure to keep up the payments on any mortgages or loans secured on your property. Providing you do this then there is no reason why your property should be at risk.
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Once a debt agreement is accepted: creditors cannot enforce remedies to recover debts bailiff/sheriff must not take action garnishee must cease debtor is released from most debt
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A Debt Agreement is an agreed alternative to Bankruptcy. Its an offer made by you to settle your debts and should creditors accept your proposal, they will not be able to contact you for debt collection, take legal action against you and the debts are frozen. A Debt Agreement is way for people to pay back an affordable and sustainable amount in order to regain control of their financial situation.

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When you enter a Debt Agreement, most of your unsecured debts are “frozen”. This means all the interest, service fees, account keeping fees and late payment fees STOP. The creditors cannot pursue you for debt collection or take fresh steps in legal action. Effectively, you are released from most of your unsecured debts.

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If you have a car under finance (secured) and you want to keep the car, you will have to continue your payment arrangement. Under a Debt Agreement, there is no vesting of property (unlike Bankruptcy) and you are allowed to keep all of your possessions.

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No. The creditors will only accept your proposal if they consider it reasonable. For a Debt Agreement to be accepted, a majority in value must accept it. Debt Fix can help you negotiate a settlement and prepare your proposal to ensure the best possible outcome.

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Credit providers have individual criteria for deciding who to lend to. Once you enter into a Debt Agreement, your credit file will reflect this under the bankruptcy section of your file. This information will appear for seven years. Once you finish paying your Debt Agreement, your credit file will show you have paid it. An entry will also be placed on the National Personal Insolvency Index (NPII) forever. From 1 July 2009 ITSA will no longer be providing a NPII search service for commercial entities and individuals.

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Essentially, your debts are consolidated into one, affordable payment and Debt Fix distributes this payment to your creditors over time until the debts are settled in full. There are no interest charges and the debts are frozen. Full and accurate disclosure of all your debts is required by law. Creditors will vote to reject a proposal where undisclosed or understated debts are discovered. Section 267(2) of the Bankruptcy Act provides for penalties for false statement.

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If you can’t afford to pay your Debt Agreement, it could be terminated. This means the Debt Agreement is cancelled, the debts revived and the creditors are able to resume collection of the debts. In addition, interest, fees and charges that the creditors forgo at the start of the agreement is added to the debts.

 

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You may change or vary your Debt Agreement, if your creditors agree to the change. Just like submitting a new proposal, the creditors will only accept changes to your proposal if they consider it reasonable. A variation to a Debt Agreement will only be accepted if a majority in number and value agree to the changes. With our expertise, Debt Fix can help you change your proposal.

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Yes. If you are in a position to pay the Debt Agreement sooner, you should consider doing so. By paying the Debt Agreement sooner, you will save time. There is no financial penalty to paying the Debt Agreement sooner.

Joint Debts: Where a debt is in joint names and one debtor is in a debt agreement, the non- debt agreement debtor, in almost all cases, continues to be liable for the whole of the debt

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The point of doing a Debt Agreement is to make sure you are debt free once you have met all your obligations under that agreement. For example, if you could obtain a credit card or any other line of credit whilst trying to pay a debt agreement, it would defeat the purpose. For this reason, Debt Fix recommends you refrain from trying to apply for credit until you have paid the debt agreement. If you choose to apply for credit, you should inform the credit provider about the debt agreement.

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Yes (As long you meet their lending criteria). Even though you may have a Debt Agreement on your credit history, there are lenders that are quite prepared to support your mortgage application once your Debt Agreement has been successfully completed. Debt Fix has a specialised team dedicated to helping you find the best mortgage option for you when the time is right.

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Debt Consolidation is used to manage debt. By combining multiple debt repayments into a single, lower monthly affordable payment; debt consolidation can be an effective strategy to regain control of bad debt.

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Debt Consolidation is one of the potential debt solutions which you consider to deal with the problem of mounting debt. If you find yourself struggling to make the minimum payment to a variety of creditors each month whilst dealing with your usual outgoings, then debt consolidation could be the answer to your debt problems.

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Consolidating debts into a single monthly repayment can leave you with more money at the end of each month, while allowing you to plan a more sensible budget. As well as improving your cash flow, debt consolidation can save time.

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So many people believe a debt consolidation loan is the only way out of their financial crisis. However, debt consolidation loans are not the only cure to the debt disease. In fact, debt consolidation loans not always the best solution for that matter.

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Many debt consolidation loans have expensive (non-refundable) application fees, pricey ongoing fees and high interest rates not to mention any penalty fees and charges that the banks these days love to charge. In this way, all the fees and charges and “hidden/unexpected” costs all diminish the benefits a debt consolidation loan may have. Therefore you should always consider all your options before you commit to a Debt Consolidation Loan. This means that you need to do your research before you do anything.

It’s also worth considering that when you get a debt consolidation loan, you are effectively swapping bad debt for different bad debt. The net result is that you still have the debt but it’s morphed into a different creature which is potentially equally oppressive to your budget. The phrase “out of the fry pan and into the fryer” holds true in this case.

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Assuming a debt consolidation loan is the most appropriate option and it ticks all the boxes as far as delivering to you a debt relief solution, these days, debt consolidation loans are not that easy to get.

A debt consolidation loan attracts a certain amount of risk from a lenders perspective therefore credit providers are scrutinizing every application. This means that if you have ever paid a credit card late, or have insufficient assets or too much debt compared to your income, or self employed then it’s pretty unlikely you will be approved for a debt consolidation loan by a bank. If you have any credit impairments, a debt consolidation loan from a bank is very unlikely.

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