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Case Study: Additional Financial Support

Sanjit and Mira are Australian citizens who hail from India.  Mira’s parents came to Australia and as they are living with the couple, are completely financially dependent on them. Sanjit has a stable job but it is not enough to cover the additional expenditure.  Mira, who was previously on home duties, takes on a part time job to help but they are still struggling to keep up with their credit commitments.  They contacted their Creditors and applied for Hardship which was granted, however, it was only for a temporary period of 3 months.  After this time, Sanjit and Mira were expected to recommence repayments as well as make additional payments towards the arrears.

They lodged a refinance application for their home loan, however, their recent Hardship status means they will not be considered until all arrears are caught up and 12 months good repayment history has elapsed.

Instead of catching up with their payments, Sanjit and Mira are falling further behind.  They are notified that defaults have now been listed on the credit file.

The debts are no longer manageable with their new family structure and dependents.

Some creditors are threatening legal action if they do not make a lump sum repayment immediately.

Sanjit and Mira are determined they will not lose their house and do not want to go into Bankruptcy, however, as they’re unable to make the payments the creditors are demanding are unsure what to do.



Minimum Payment

Secured Mortgage**


$1850 per month

Credit Card #1


$1105 per month

Credit Card #2


$567 per month



$1055 per month



$2,727 per month

An overview of Sanjit’s debts

Debt Solution:  Part IX Debt Agreement

Mira contacted the team at Life After Debt ®. After discussing their full circumstances, they were advised that a Part IX Debt Agreement would likely be the best option.

Sanjit and Mira were made aware by Life After Debt ® that;

  • A Debt Agreement is a compromise on unmanageable unsecured debts which enables the individual to avoid Bankruptcy. All unsecured debts must be included and they would need to be assessed against the eligibility criteria.
  • If the offer is accepted, it would mean one manageable repayment based upon what they can afford, rather than what each Creditor is demanding.
  • Sanjit would have protection from any further collections harassment, legal or recovery action.
  • Furthermore, the interest on the debts is frozen.
  • Not all Creditors have to agree to the offer for it to be accepted.  The outcome is decided by the majority of creditors in dollar value.
  • A listing would be placed on Sanjit’s credit file which would remain there for 5 years and his details would be recorded on a Government database called the NPII. Mira’s credit file is unaffected as the unsecured debts are only in Sanjit’s name.
  • As his Administrator, Life After Debt® would receive an administration fee which would be deducted from his contributions to Creditors.
  • As the Debt Agreement is processed by a Government department called AFSA, they would receive a realisations charge which would be deducted from his contributions to Creditors.

Summary Result (Once Accepted)

· Reduced repayments from $2,727 p/m to $1,640 p/m (a reduction of $1087 p/m)

· Will be debt-free in 5 years (apart from the mortgage)

· Credit file listing will be removed in 5 years

· Interest on unsecured debt is frozen

· Fees are largely absorbed by contributions to Creditors

· No more Creditor harassment or collection activity

· The property is protected from legal action as long as they maintain all required payments

Please note that this is an example only and not an actual case.