What happens to my debts?

What you need to know

Once a Summary Instalment Order (SIO) is made, creditors cannot begin or continue any steps to recover or enforce a debt included in the SIO.

Certain debts are excluded by law.  You must continue to pay any:

• Maintenance Orders under the Family Proceedings Act 1980

• Child support under the Child Support Act 1991

• Student loans

• Court fines and reparation.

The excluded debts listed above are not provable debts.

Creditors may file ‘provable debt’ claims in an SIO.  Provable debts are debts or liabilities owed at the date of entry which the creditor can prove through invoices and/or agreements.  This includes contingent debts.  Contingent debts are debts that are not immediately payable but which become payable on occurrence of an event such as default.  For example, a guarantor becomes liable for his guarantee only if the debt that is guaranteed does not get paid by the debtor.  The guaranteed debt is provable or included in your SIO.  If you have provided a guarantee to a creditor on another person’s behalf before the date of your entry to SIO, then it is included as a debt for the purposes for determining your eligibility for entry to a SIO.

To enter into an SIO you must be unable to repay all debts immediately.  You must, however, be in a position to contribute toward payment in full or in part over the course of the SIO.  This is normally three years but may, under special circumstances, be extended to five years.