What is a Debt Agreement?
A Part IX debt agreement is a government initiative, designed to prevent eligible individuals from going into bankruptcy.
If eligible, Debt Help Australia will assess your situation and come up with a sustainable dollar figure that you can afford to pay each week or fortnight to propose to your creditors.
Once accepted, all you will need to do is continue to pay the agreed amount until the debts are satisfied.
- All your unsecured debts will be included in the single payment.
- No interest can be charged once the agreement is in place
- Your creditors are bound by the terms of the agreement if accepted and you can’t be chased, provided you also stick to the terms and continue payments.
Please note that as the Part IX is a ‘form’ of bankruptcy (Part IX of the Bankruptcy act) and although seen as less severe, it does still put a notation on your credit file. Please consider your personal situation seriously before proceeding.
Part IX vs Bankruptcy
There are a few differences between bankruptcy and a Part IX debt agreement. Mainly, the severity of Bankruptcy is greater. Unlike Bankruptcy, under a Part IX debt agreement, you are still able to be a director of a company, hold onto your assets, there are no restrictions on overseas travel and you will not need to make income contributions.
Can I use a Part IX Debt Agreement in my situation?
Debtors are eligible to lodge a debt agreement proposal if they:
- are insolvent (unable to pay their debts as and when they fall due)
- have not been bankrupt, had a debt agreement or given an authority under Part X of the Bankruptcy Act in the last 10 years (this will be verified by the Official Receiver by searching the National Personal Insolvency Index)
- have unsecured debts or assets (specifically the equity in assets) of less than $108,162.60 (amount correct as at September 20th 2015, but is subject to change for indexation).
- have annual after-tax income of less than $81,121.95 (amount correct as at September 20th 2015, but is subject to change for indexation).
If you are unsure about whether you qualify, or whether a Debt Agreement (Part IX) is appropriate for you, give Debt Help Australia a call on 1300 884 541.
Please Note: When you are considering proposing and entering into a debt agreement there are impacts and important consequences that you (the debtor) need to be aware of. For more information about these impacts, please read the relevant information contained on this website, and talk to one our qualified representatives.
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