Media
Release
For Immediate Release
21 October, 2008
New research finds Debt Agreements work
The Insolvency and Trustee Service Australia (ITSA) has today released new research into the
experiences of debtors using the new debt agreement system introduced in July 2007. This
research shows that the system is achieving the goal of assisting debtors with their unmanageable
debt and helping them manage their personal financial affairs.
A significant majority (91%) of debtors surveyed felt that entering a debt agreement helped them
to manage their debts. Similarly, 86.7% of debtors indicated that their debt agreement had
assisted them to better manage their household budget and left them with enough money to
meet ordinary household bills.
The survey also found that most debtors consider they are now better informed about the
consequences of entering into a debt agreement. For example, 90.5% understood that their
name would be recorded on the public register of insolvencies, a significant improvement on
2004 results (65.0%); and 94.3% understood that their credit rating and ability to obtain further
credit may be affected (compared with 81.3% in 2004).
“The changes introduced in July 2007 were aimed at ensuring debtors were fully informed about
debt agreements and alternatives and can afford to make the promised payments under the
agreement”, said David Bergman, Acting Chief Executive and Inspector-General in Bankruptcy,
ITSA, in releasing the report.
“The results of this research are encouraging because they show the debt agreement industry is
maturing and that debt agreement administrators are trying to address some of the past problems
that caused too many agreements to fail.”
The survey found debtors' overall satisfaction with their debt agreement administrator improved
over the results of a similar survey in 2004. The majority of respondents (89.5%) rated their
administrator as either “acceptable” or “above average” compared with 83.4% in 2004.
“ITSA is continuing to work very closely with debt agreement administrators and creditors to
ensure that debt agreements continue to be a viable option for people in financial difficulty”, Mr
Bergman said.
Media Contact
Anita Cleaver
Director
Rave Communication Pty Ltd
Phone: (02) 6295 3662
Fax: (02) 6295 3641
E-mail: anita@ravecommunication.com.au
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