What debts go into a Debt Agreement?

31 May 2012 by anthony in Debt Agreement

This is the most common question we are asked “What debts go into a debt agreement?”

The answer is: “unsecured debts which are provable debts” . What this means in layman’s terms is all debts which are unsecured and are provable in bankruptcy must be included in any debt agreement proposal.

We explain the difference between a secured debt and an unsecured debt if you click here.

If you intend to keep the asset which is secured then the secured debt is excluded from any debt agreement proposal as long as you intend to keep paying the loan. We make allowance for you to pay the loan in the debt agreement budget.

What is a provable debt can sometimes be tricky, but we provide a list of common examples below:-

  • Income tax debt
  • Unsecured loans
  • Credit card debts
  • Personal loans
  • Store cards
  • Trade creditors
  • Mortgage insurance premiums
  • Centrelink debts

Some examples of non provable debts:-

  • Secured loans (unless the asset has been surrender and there is a shortfall)
  • Fines imposed by a court
  • HECS debts
  • Debts incurred by fraud
  • Proceeds of crime debts
  • Child support (and the agreement has been registered with the child support agency)
  • Council rates – rates attached to property
  • Centrelink debts obtained by fraud

Debts incurred by the debt agreement has been proposed and accepted must be paid outside of the agreement. In other words you will continue to be liable to pay these amounts.

Call Debt Free today if you are unsure about what debts are to be included in your debt agreement proposal. We have a toll free line on 1800 98 10 70.