Part 9 Debt Agreement - Part IX Debt Agreement
are often used as an alternative to going bankrupt and by managing a Debt Agreement instead of going bankrupt it can save your assets as well as stopping interest..
A Part 9 Debt Agreement combines all existing debts into one consolidated debt. The debt or repayments that can be covered in a Part 9 Debt Agreement are unsecured personal loans or debts. Some examples of these debts are, bills, overdrafts, credit card/store cards, school fees, personal loans, Tax debts, Utility bills and many more. Any debt which has an asset attached to it, is not included in a Debt Agreement as receiving dividends unless there is a shortfall. However payments towards your secured creditors are allowed in the budget. Therefore Mortgage ans car loans are listed on the Debt Agreement Proposal, that you will maintain normal contractual payments with these loans.
This type of Debt Agreement is regulated by the Federal Government, Insolvency & Trustee Service of Australia (ITSA). Australian Debt & Insolvency Solutions Pty Ltd are registered Debt Agreement Administrators with ITSA.
What the Part 9 Debt Agreement
offers is a way for you to make a weekly, fortnightly or monthly repayment that is assessed according to your budget, ie income less living expenses including mortgage and car payments, some entertainment, clothing etc. Whatever is leftover is offered to your creditors via a formal Debt Agreement
One immediate benefit of an accepted Debt Agreement is that it gives you relief from people who are chasing you for money now. Any legal action taken against you to recoup money will be ceased, and no more interest payments can be added by your creditors. A Debt Agreement also does not attract interest charges, so all you will need to repay is the balance of your Debt Agreement.
When you have finished paying off the Part 9 Debt Agreement, all of your previous debts will be considered legally closed.
As mentioned, the government has strict rules and thresholds which apply to Part 9 Debt Agreements. We can help make sure you comply with all of them and streamline the application process. These are the four main points for consideration when applying for a Debt Agreement
. It is important to note that the government can change the amounts mentioned from time to time.
Some important points to consider before applying for a Debt Agreement are.
- Your take home pay can't exceed $1,451.88 per week.
- The amount of debt to be included must be less than $100,664.20
- Your total assets can not be valued higher than $100,664.20
- You can only get one Debt Agreement in any ten year period. Also you can't get a Debt Agreement if you have been bankrupt or had a previous Debt Agreement in the last ten years.
- A Debt Agreement will appear on your credit history for seven years.
- Your name will be listed on a National Personal Insolvency Index (NPII) forever. This is a record held by ITSA and they will charge a search fee to look up this information. This is different to your credit history records.
- All unsecured debts must be declared in the Debt Agreement, you can't just pay of some of your debts.
- It is not mandatory for the creditors you owe money to, to accept a Debt Agreement. If they do not accept it, ADAIS will resubmit it with some changes based on their reasons for the rejection. If a second Debt Agreement Proposal is re-lodged ADAIS will not charge another setup fee, howerver ITSA will charge another $200 lodgement fee.
- Part 9 Debt Agreements are very flexible. If you want to pay it off faster than agreed that is fine. There are no fees or charges for making additional repayments. You must however, always make your minimum payment.
- A Debt Agreement needs a majority (ie, more than 50%) in the value of unsecured debts, to accept the Debt Agreement. Those who vote 'No' are legally bound by it if the majority vote is 'Yes'.
ADAIS have helped thousands of Australians successfully manage a Debt Agreement and benefit greatly from taking this action. They are complicated to arrange and setup however we will do the paperwork while you focus on your business or work commitments.
All of your information will be kept in the strictest of confidentiality. To find out more, or to begin the Debt Agreement process, why not give us a call today. Alternatively you could complete the contact form on this website and a friendly professional will call you back soon.
*A Part 9 Debt Agreement is also known as a Part IX Debt Agreement.