The Difference Between Debt Agreements

If you are struggling with bad debt, a Debt Agreement could help you get on the road to financial recovery.

A debt agreement will reduce your overall debt, pause your interest and get the creditors off your back, giving you the time you need to repay your debts in peace.

However, no two people are the same and every debt situation is different. To cater for this, there are different debt agreement variations on offer:

Part IX Debt Agreement

A Part IX Debt Agreement is a legally binding contract between you and your creditors outlining a new repayment arrangement to suit your circumstances. Debt Agreements are administered in accordance with Part IX of the Bankruptcy Act 1966 and as such, will be marked on your credit file and your name will be listed on the National Personal Insolvency Index.

To be eligible for a Part IX Debt Agreement, you must have a certain amount of unsecured debt. The indexed amounts are set by ITSA and are updated twice a year. You can't have had a Debt Agreement or have declared bankruptcy in the last 10 years.

Most Australians struggling with credit card debts, personal loans, outstanding bills and other unsecured debts are eligible for a Part IX Debt Agreement.

Part X Personal Insolvency Agreement

A Part X Personal Insolvency Agreement is also known as a personal insolvency agreement. Like a Part IX it is a new repayment schedule which must be negotiated with your creditors, but a Part X really lends itself to people in a more complicated debt situation.

There is no eligibility criteria for a Part X, which makes it suitable for people with high debt amounts and people who are higher income earners. Because the process is longer and more involved, it allows debtors to propose settling their debt in a reduced lump sum and other methods.

Informal Debt Arrangement

An Informal Debt Agreement is a legally binding contract between you and your creditors outlining a new repayment arrangement to suit your circumstances.

An informal Debt Agreement is not legislated by the government, so it is not marked on your credit rating.

An Informal Debt Agreement is usually only suitable for people who have recently experienced a dramatic change in their circumstances which has left them unable to pay their debts. They could have lost their job, suffered an injury or fallen out of a relationship.

An informal Debt Agreement can cover one debt or several debts, no matter how big or small.

Each has its own set of eligibility, capabilities and restrictions to suit a wide range of circumstances.

Get Professional Assistance

We are here to help you understand the difference between debt agreements, examine your options and guide you through each step of the process.

We can negotiate with your creditors to write off between 30%-80% of your debts leaving you with better payment terms (with no further interest of fees) that you can afford.

We will then organise all the paperwork and take care of the ongoing administration for the duration of your debt agreement.

It May Get Worse, Take the First Step Now

Call us on 1300 496 224 now or simply fill in the form at the top and one of our consultants will contact you at a convenient time.

There is no obligation. We will assess your situation, offer the best solution how to sort out your debt and then the decision is yours.