What is a Part 9 Debt Agreement?
A debt agreement is a binding agreement under Part 9 of the Bankruptcy Act of 1966 between a person and their creditors. Where the creditors agree to accept a sum of money which the debtor can afford. Proposing a debt agreement is as detailed as an act of bankruptcy.
A debt agreement is an option to assist persons with unmanageable debt and is an alternative to bankruptcy.
What are the Requirements of Part IX Debt Agreement?
- A Part 9 Debt Agreement will be listed on your credit file for 7 years.
- Your name will also be listed on a National Personal Insolvency Index (NPII) forever. This is a record held by “Australian Financial Security Authority” and can be publicly accessed for a fee. This is not your credit file and is generally not accessed by a lender when applying for a loan.
- All unsecured debts must be disclosed in the Part 9 Debt Agreement – no debts can remain.
- Your creditors do not have to accept a Part 9 Debt Agreement proposal.
- More than 50% of your creditors must accept the Debt Agreement terms to proceed.
- Your take-home pay can’t exceed $1,515.68 per week.
- Your total included debt must be less than $105,086.80
- Your net assets can not be valued higher than $105,086.80
- You cannot have more than one Part 9 Debt Agreement, Part 10 or Bankruptcy in a 10 year period.