Submitting a Debt Agreement Proposal is a serious step and there are negative consequences if the debtor fails to comply with the terms of an established Debt Agreement.
The Debt Agreement Administrator will notify the ITSA and creditors in respect of any default in payment by the debtor that results in a cumulative three-month arrears or six-month arrears in respect of the Debt Agreement. An agreement must be completed within 6 months of the specified date. Therefore, it is possible that if the debtor does not maintain regular payments as undertaken, then creditors may elect to terminate it and pursue the debtor for immediate repayment of the outstanding debts, which may result in bankruptcy.