Why choose a Debt Agreement?
A Part IX (9) Debt Agreement establishes a formal agreement that lets you repay your unsecured debts on new terms (which may include reducing your debt and pausing interest) if you’re experiencing financial hardship.
How Debt Agreements work
Many Australians choose legally-binding Part IX (9) Debt Agreements to take back control of their financial futures. Find out why:
A Part 9 Debt Agreement establishes a formal agreement that lets you repay your unsecured debts on new terms (which may include reducing your debt and pausing interest) if you’re experiencing financial hardship.
Complete our free assessment to understand your most suitable options and work with your personal Success Specialists to arrange a clear Part 9 Debt Agreement proposal with your creditors.
Every Part 9 Debt Agreement proposal we help arrange clearly outlines all Part 9 Debt Agreement fees so you’re always in control. We explain all of the fees prior to any commitment.
-
Single monthly payment
Combine all your provable debts into one easy-to-manage payment. -
Lower repayments
Agree on an affordable repayment plan that fits your budget. -
Debt reduction
Negotiate a reduced amount to repay, making it easier to clear your debts. -
Pause interest
Future interest on your unsecured debts is paused, preventing further financial strain. -
Asset protection
Unlike full bankruptcy, your assets are protected, helping you maintain stability. -
Shortened repayment period
Complete your repayments within a 3 to 5-year timeframe, freeing you from debt sooner. -
Creditor relief
Alleviate creditor pressure and prevent legal action against you. -
Payment administration
Revive Financial will administer all of the payments to your creditors on your behalf. -
Majority approval
Not all creditors need to agree to your proposal. You only need the majority of creditors (50.1% by value) to agree for the Debt Agreement to be accepted.
-
Credit file impact
Your credit file rating will be affected for up to five years, which may limit your ability to incur further debt. Where you complete the agreement (ends under S185N of the Bankruptcy Act), the agreement remains on the credit file & NPII until the longer of 5 years and 1 month from the day the agreement is made, or 1 month from the completion date. -
Professional licenses
Certain professional licenses may be impacted, so it’s essential to understand the implications for your career. -
Compliance requirements
If you don’t meet the terms of your Debt Agreement or make your payments in full and on time, the creditors are within their rights to seek termination of the agreement and recommence collection proceedings, legal action, or enforce bankruptcy. -
Exclusions
Not all debts can be included in a Part 9 Debt Agreement. Secured debts (e.g., home loans and car loans) and some state debts (e.g., fines) cannot be included. -
Joint debts
A Debt Agreement does not release another person from a joint debt.
Debt Agreement case study
See how the right Part IX (9) Debt Agreement proposal has unlocked the first step to financial control for our customers.
After the tragic loss of her fiancé, Sarah was exhausted from juggling mounting debts alone – Revive Financial helped her regain control, avoid bankruptcy, and focus on her young son.
The problem
Following the loss of her fiancé, mounting childcare costs, medical expenses, and the impact of COVID on the farming industry left Sarah overwhelmed by $40,000 in debt. As a single mum, she was completely exhausted from juggling it all alone.
The solution
Negotiated a Part 9 Debt Agreement that consolidated her debts into a single, affordable plan, reducing her total debt by over 60%.
The outcome
Successfully avoided bankruptcy and reduced her debt by $25,000. She now has one manageable repayment plan, giving her the breathing room to regain her financial footing and move forward.
How much could you save?
Find out how much difference the right Part IX (9) Debt Agreement could make with our calculator.
Your results
Your Revive Financial Success Specialist will conduct a confidential assessment (factoring in your income, assets and total unsecured debts) to determine whether you qualify. If a Debt Agreement is right for you, they will help create a Debt Agreement proposal for your creditors.
There will then be a creditor vote on the proposal (lodged through the Australian Financial Security Authority).
No.
Not all creditors need to agree to the Debt Agreement proposal. As long as creditors representing a majority (50.1% of the total dollar amount) of those who vote and are entitled to vote accept the proposal. If accepted, it becomes legally binding on all creditors. Your Revive Financial Success Specialist will explain the voting period in detail when your proposal is prepared.
As trusted debt solutions specialists, we are here to advise you on your options and Debt Agreement eligibility criteria, create your debt agreement proposal, seek its approval from your creditors, and then act as your personal Debt Agreement administrator. This means that we engage with your creditors and help you improve your financial situation.
There are certain guidelines and thresholds you must meet to be eligible.
- You cannot have been bankrupt or completed your Debt Agreement in the last 10 years.
- The required income, value of unsecured assets, and value of unsecured debts thresholds change. You should refer to the AFSA guidelines for the latest figures and come within that.
While the specific terms and conditions of each Debt Agreement is unique and particular to the individual involved, in general, the average Debt Agreement typically lasts between 3 years for non-home owners or 5 years for homeowners. However, you can complete it earlier if you make larger payments than the set amount.
Your credit file rating will be affected, which may limit your ability to incur further debt. Where you complete the agreement (ends under S185N of the Bankruptcy Act 1966), the agreement remains on your credit file & NPII until the longer of 5 years from the start date, the completion date or 2 years after the completion or termination date, or whichever is the longer.
There is typically also a 1-month processing period while your credit file and NPII is updated.
After the listing period, you will have a clean slate from which to rebuild your finances. We have access to a panel of lenders willing to lend money to individuals who have completed Debt Agreements at competitive rates.
A Debt Agreement can impact your employment, especially if you hold a professional license or work in certain industries. Some employers may have policies regarding employees entering into Debt Agreements, and certain professional licenses may be affected. It’s important to check with your employer or professional licensing body to understand any potential implications for your employment.
A Debt Agreement includes ‘provable debts’, which are debts that entitle the creditor to participate in dividends paid in a bankrupt estate or under a Debt Agreement. Typically, these include unsecured debts such as credit card debt, personal loans, medical bills, and other similar obligations. Secured debts (like home loans or car loans) and certain state debts (such as fines) cannot be included. Provable debts are extinguished upon completion of the Debt Agreement.
Yes.
While you can include joint debts in your Debt Agreement, it’s important to note that this agreement does not release the other person from their responsibility for the debt. They will still be liable for the remaining portion of the joint debt.
If you fail to meet the terms of your Debt Agreement or fail to make payments in full and on time, creditors can seek to terminate the agreement. If the Debt Agreement is terminated, they may recommence collection proceedings, take legal action, or pursue Bankruptcy.
To get started, contact Revive Financial for a consultation. Our team will assess your financial situation, explain your options, and help you determine if a Debt Agreement is the right solution for you. We’ll guide you through the entire process, from proposal preparation to finalising the agreement.
Debt management companies charge a professional fee for their debt solutions. Our friendly team of non-judgmental Success Specialists will assess your financial situation for free and clearly explain all costs associated with our solutions.
Related articles
