Part 9 Debt Consolidation
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
- 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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