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. There are eligibility requirements that must be met in order for the proposed debt agreement to be adopted. After submitting your proposal to AFSA, the official recipient will evaluate the proposal and verify that it meets these requirements. If the proposal is considered non-compliant with these requirements or is not in the interests of creditors, it may be rejected by AFSA. Since it can have serious consequences if you apply for a debt contract, it is important to get the right advice before making decisions.
A debt contract is a formal alternative to bankruptcy, where all your creditors agree to accept the partial payment of the debt equally. It is manufactured under Part IX of the Bankruptcy Act. You don`t have to be able to pay your debts for this type of agreement. If you are struggling with debt, a debt contract may be the right solution for you. Safe Debt Management aims to improve your life and can help you get out of debt. For a proposal to be accepted, AFSA must obtain “yes” votes from the majority of your creditors, who owe at least 50% of their total debt to each other. Even creditors who vote against the debt agreement are bound to it, provided the required majority has voted “yes.” No, not all creditors need to agree. The majority of the value, i.e.
50.01% of the dollar of the creditors who vote and have the right to vote, must approve your proposal. If you do not misre serve all your debts or indicate that the debt is a common debt, that it has a guarantee, that it is secured/unsecured, or even that you do not divide the correct debt, these are just some of the reasons why the creditor may reject your proposal. You should keep in mind that your creditors may have access to information that you may not have disclosed to us. A debt contract is not the end. The road can be difficult, but it leads to a fresh start If you are looking for ways to reduce financial stress, a debt contract may be an appropriate procedure. However, the agreement of a debt agreement is not a measure of opportunity and it is not taken lightly by the tax authorities. Before continuing to organize a debt contract, you need to understand the consequences: to ensure compliance with the rules, your debt contract provides for administrative costs to be paid to AFSA and Safe Debt Management for the duration of your agreement. These fees are included in your payments and may vary depending on the amount of your debt. A debt contract is not the same as a debt consolidation loan or informal payment agreements with your creditors. This is only a short guide and it is recommended that you consult a financial advisor to discuss the best option for you in your circumstances. See fact sheet: Broker for debt agreements and fact sheet: Get help for a list of additional resources.