Part IX Arrangements

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Part IX Arrangements

A debt agreement, also known as a Part IX, is a legally binding agreement between you and your creditors.

A debt agreement can be a flexible way to come to an arrangement to settle debts without becoming bankrupt.

  1. You negotiate to pay a percentage of your combined debt that you can afford over a period of time.
  2. You make repayments to your debt agreement administrator, rather than individual payments to your creditors.
  3. After you complete the payments and the agreement ends, your creditors can’t recover the rest of the money you owe.

A debtor will usually use a Debt Agreement to:

  • Get relief from their debts;
  • Ensure a controlled distribution of assets or funds to their creditors;
  • Provide creditors with a higher dividend than would be payable if they became bankruptcy;
  • Maintain their source of income; and
  • Avoid the restrictions of bankruptcy

 

Debt agreements are NOT:

  1. Consolidation loans or agreements to borrow money
  2. Able to release you from all types of debts—some debts you will still need to pay.