If you are a creditor[?] in a debt agreement, you may need to understand what your rights are. The type of debt will determine if you can still pursue the person directly for the money they owe you. You’re not able to charge interest for the debt during the voting period or once the agreement begins.
Being an unsecured creditor means your debt isn't tied to a particular asset. If you're an unsecured creditor, you must comply with the terms of the agreement. This applies to you even if you voted 'no' to the agreement proposal.
In most cases, this means you can no longer pursue the person for the debt.
There are exceptions when you can pursue a debt during a debt agreement. Some of these include:
- Debts incurred after the agreement started.
- Unliquidated debts - debts where the person has not accepted liability and amount is unknown.
- Joint debts - you are able to pursue your debt from the person who is not in the agreement.
- If we terminate the agreement - due to the person not meeting their obligations.
For more information see: Creditor's quick guide - debt agreements and unsecured debts.
Being a secured creditor means your debt is tied to a particular asset e.g. car or home loan.
A debt agreement does not change your rights as a secured creditor.
- You are still able to pursue the person for payment of the debt.
- You may repossess and sell the secured goods if the person is unable to maintain repayments