Debt agreements

Individuals who satisfy the following may be able to enter a Debt Agreement (DA) without becoming bankrupt:

• Unsecured debts and assets are each less than $72,381.40 (indexed); and
• After-tax income for the next 12 months is expected to be less than $54,286.05 (indexed).

The process of entering a DA involves submitting a proposal (similar to the PIA proposal) to the Insolvency and Trustee Service of Australia (ITSA). ITSA then sends the proposal to creditors to either accept or reject the agreement via a postal vote.

• inform the individual of the consequences of entering a DA; and
• assist with the paperwork and lodgements with ITSA and if the DA is accepted, ensure the terms are carried out.

• release from all provable debts;
• all unsecured creditors are bound by the DA regardless of their individual vote; and
• unsecured creditors are unable to take further legal action.