A Part 9 Debt Agreement
The Insolvency Advisory Centre is here to clarify any misconceptions about bankruptcy and personal insolvency agreements, often referred to as Part 9 debt agreements. We will help determine which type of agreement would be best suited for your specific situation.
Debt agreements and Personal Insolvency Agreements offer a formal method of settling debt in a way you can afford. While both options differ from bankruptcy, they are still acts of bankruptcy, so it’s essential to understand the benefits and consequences of all personal insolvency options. We can help you choose the best option to solve your debt problems.
What Is a Part 9 Debt Agreement?
The Bankruptcy Act allows insolvent individuals to enter into formal agreements with their creditors. A Part IX/9 debt agreement is where you negotiate a legally binding agreement between you and your creditors. You agree to repay a percentage of your unsecured debt, generally over a three to five-year period. A Part 9 debt agreement is aimed at lower-level deficits often associated with consumer liabilities.
Who Will Manage a Part 9 Debt Agreement?
Because of its complex nature, only a registered Bankruptcy Trustee or agreement administrator can properly administer this type of proposal. It requires many steps and considerable skills to set up everything correctly and keep track of all the paperwork necessary for administering a Part IX/9 debt agreement. At the Insolvency Advisory Centre, we have a high degree of experience, and the skill is needed to ensure things run smoothly and you get the best outcome.
What Does It Cost?
Various fees are involved in these agreements and often vary between administrators and trustees. Typically, you’ll be charged:
- A set-up fee by the administrator or trustee – this fee relates to the cost of putting your proposal together
- AFSA, the Australian Financial Security Authority lodgement fee – a fee that the Federal government charges for lodging your proposal
- Administration Fee – a fee that your trustee or agreement administrator will charge for administering your agreement if and once your creditors accept it
- AFSA Realisations Charge – a levy charged by the Federal government if and when your proposal is accepted. It relates to the cost of conducting enquiries, investigations, monitoring and the regulation of trustees and agreement administrators.
The Consequences of Having a Part 9 Debt Agreement?
A debt agreement is still an act of bankruptcy, so there will be a listing on your credit report for five years, just like bankruptcy and personal insolvency agreements. The government will also record your debt agreement on the National Personal Insolvency Index (NPII).
If you’re self-employed and trade under a business name that’s not your personal name, you must disclose your agreement to everyone you do business with. You can also not apply for goods or services on credit, cheque or hire purchase above a set amount as detailed by AFSA without disclosing that you are currently in agreement.
By committing an act of bankruptcy, a creditor can apply to the court to make you bankrupt if your agreement fails.
Who is Eligible for a Part 9 Debt Agreement?
- As detailed by AFSA, the Australian Financial Security Authority, your after-tax income doesn’t exceed a certain amount.
- Your unsecured debts and assets don’t exceed a certain amount.
- In the last ten years, you haven’t been undischarged from bankruptcy, a personal insolvency agreement (Part X/10) or a debt agreement (Part IX/9).
- You are insolvent. You’re unable to pay your debts as and when they fall due.
“We have seen many people in debt overwhelmed by their financial situation come to us for help. We offer solutions that will allow you the chance at a new beginning, including Debt Agreements & Personal Insolvency Agreements. We offer solutions that are best suited just for your case and will help you determine the best way to settle your debts so that you can afford the repayments.”
Andrew Bell Insolvency Advisor
With over 30 years of experience in debt solutions and insolvency in Australia, Andrew can find a solution for you.
“Nothing is more satisfying to me than knowing that I’ve helped someone get back on their feet by guiding them through the Insolvency Process. Rest assured; you’re in good hands with me as we solve your financial problems together.”