Debt Agreement Cancellation
What constitutes a six month arrears default?
A six month arrears default may occur in one of two ways:
1-A debtor has made no payments for six months after a payment is due. Note this needs to be a continuous period of no payments for six months.
2-The debt agreement has continued for six months past the completion date and the debtor has not completed all payments and obligations.
1. or 2. above occurring the debt agreement will be in ‘six month arrears default.’ It is therefore an important duty of the administrator to notify the Official Receiver of this occurrence.
The six months arrears default occurs on the day immediately after the expiration of the six month period ie 6 months and one day. See practical examples below.
How to measure ‘6 months’
The six month time period is not to be measured or converted to days or weeks. The six month period is only to be measured in calendar months. See practical examples below.
In cases where the last day for making a payment in the six calendar months fall on a public holiday the six calendar month period is extended to the next working day.