Part 9

Part 9 of the Bankruptcy Act regulates the administration of Debt Agreements in Australia. Part 9 provides a process by which a legally binding arrangement can be put in place between a debtor and their creditors as an alternative to Bankruptcy.

A part 9 agreement is a formal arrangement with your creditors whereby these creditors will accept a less than full payment of your outstanding debts to fully settle your account.

Who can enter into a Part IX Debt Agreement?

To qualify for a Debt Agreement the debtor must be insolvent, i.e. unable to pay their debts as and when they fall due.

A debt agreement can be proposed by a debtor who has -

• Not been bankrupt, utilised a debt agreement or given an authority under section 188 of the Bankruptcy Act in the last 10 years; or
   
• After tax income of less than $59,186.40; or
   
• Unsecured debts of less than $78,915.20; or
   
• Property that would be divisible among creditors if the debtor were bankrupt valued at less than $78,915.20.

How will Part 9 affect my credit history?
Part 9 is an alternative to Bankruptcy and as such will be reflected on your credit report.
 

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