Creditor Proposal

A creditors proposal is a formal agreement between the client and creditor(s) about how and when debts will be paid. All creditors need to agree to the terms of the proposal. A Licenced Insolvency Practitioner is needed to draft the proposal, have it approved by the court and manage the process.

Once the creditors proposal is approved the creditors included in it cannot ‘chase’ the client for their debts without the court’s permission.

This is a suitable option for clients with more than $5,000 of unsecured debt and income to repay the debt.

A creditors proposal does not have the same restrictions as an insolvency procedure.

A creditors proposal usually incurs legal and administration fees.