Can an Debt Agreement be varied or terminated?
A variation proposal may be lodged if the debtor's circumstances change.
A termination proposal may be lodged by the debtor or a creditor if the terms of the debt agreement are not being carried out.
Creditors vote on a proposal to vary or terminate in the same way as they vote on the original proposal.If it is not accepted by creditors, the terms of the debt agreement remain in force.
The agreement is automatically terminated if:
a. the debtor does not complete their payments withing six months of the completion date of the agreement.
b.the debtor has not made any payments for six months after a payment is due.
The effects of termination a debt agreement include:
a. creditors can commence or recommence recovery action against the debtor.
b. the termination of the debt agreement is registered on the NPHI.
The debtor a creditor or ITSA may apply to the court for an order to terminate a debt agreement. Creditors may apply for an order that the debtor be made bankrupt.
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