What is a Debt Agreement or Part IX?

A Debt Agreement, otherwise known as a Part IX, is a way to come to an affordable arrangement with your unsecured creditors which is legally binding and will (if your creditors accept it and you complete your obligations) release you from that unsecured debt.

What does insolvent mean?

You are technically insolvent if you can’t pay all your debts as and when they fall due.

Is a Debt Agreement the same as Bankruptcy?

A Debt Agreement is an alternative to Bankruptcy. However, by submitting a Debt Agreement proposal you are committing an “Act of Bankruptcy”. If the proposal is not accepted by creditors, a creditor can use this to apply to the court to make you Bankrupt.

What are the benefits of a Debt Agreement?

A Debt Agreement enables you to propose affordable payments over a period of time, even if they equal less than the full amount that you owe. Debt Agreements also have the ability to suspend all interest and protect you from any action whilst the arrangement is in place or once it’s completed. Also your Debt Agreement administrator can talk to your creditors on your behalf, therefore stopping all the harassing phone calls. Debt Agreements don’t have the same restrictions as Bankruptcy does (e.g. travel restrictions and restrictions on what you can own/keep). Unlike Bankruptcy, under a Debt Agreement directors of a company may be able to continue to manage a corporation.

What is provable unsecured debt?

Your provable unsecured debt is the only debt that you are able to put into your Debt Agreement. Examples of unsecured debt include, medical and phone bills, credit card debt, personal loans and the shortfall from secured debts. Examples of unsecured debt that cannot be included are child support payments and court fines.

Do all creditors have to agree to my Debt Agreement proposal?

No, not all creditors have to agree. If the majority in dollar value of those who decide to vote, vote yes, then your proposal is accepted and all creditors in the proposal are bound by it. This includes the creditors who didn’t vote or even voted no.

Can you guarantee that my Debt Agreement will be accepted?

No, it would be unprofessional to make such a guarantee. It is up to your creditors to decide whether they accept or reject your proposal.

How do I make payments towards my Debt Agreement?

Your payment is set up with your administrator who will debit it directly from your bank account on a weekly or fortnightly basis and then distribute it to your creditors. Alternatively, you may wish to make a single lump sum payment or offer the proceeds directly from the sale of property as a lump sum payment.

What’s the best way to get my Debt Agreement proposal accepted?

Your responsibility is to make full and complete disclosure of your financial position, put forward the best offer you can and commit to complying with the terms of the agreement. This is the best way to ensure you are doing everything you can for your agreement to be accepted.

Who is an administrator?

An administrator is licensed with AFSA and is responsible for collecting and distributing your payments to your creditors.

Who is AFSA?

The Australian Financial Security Authority (AFSA) is the government body responsible for reviewing and facilitating our Debt Agreement process, Personal Insolvency Agreements, Bankruptcy and other insolvency matters. Prior to 15th August 2013, AFSA was known as ITSA.

How will a Debt Agreement affect my credit rating?

Both Debt Agreement proposals and Debt Agreements are listed on the National Personal Insolvency Index (NPII). The Debt Agreement will be listed on your credit report for 5 years from the date the agreement was made, or from the day the agreement ends (whichever is longer), or if the agreement is terminated, it will be listed on your credit report for 2 years from the termination date, or 5 years, whichever is longer.

Do I pay my unsecured creditors whilst I wait for them to vote on my Debt Agreement proposal?


When a Debt Agreement proposal is lodged with AFSA, the debt will be on hold pending the outcome of the voting process. We can’t tell you whether or not to pay your creditors, that is your decision. However, you must treat these creditors equally and fairly. It is important to pay your secured creditors (like mortgages, etc.) otherwise you run the risk of those assets being repossessed.

Are there any fees in a Debt Agreement?

Your administrator will receive a fee which is approved by your creditors. The Government department (AFSA) will also charge a small fee. These amounts are usually included in your payments. Credit Repair Australia may also charge a fee.

How long does it take to get a Debt Agreement proposal approved?

The time between appointing Credit Repair Australia and the creditors’ voting date is approximately 50-55 days, however this timeframe varies from case to case.

What if my creditors continue to call once in a Debt Agreement?

It is important that you maintain your relationship with your creditors. Therefore, if they call you throughout the process, simply advise them that you are attempting to propose an arrangement to pay them. Obtain the person’s name who is calling, where they are calling from and the best contact number to call them back on. Pass this information onto your Credit Repair Australia case manager and we will handle it from there.

Where can I find out more information about 
Debt Agreements?

You can give us a call or visit the AFSA website for more information.

What is a Personal Insolvency Agreement?

A Personal Insolvency Agreement (PIA) is an alternative to Bankruptcy where you enter into an affordable arrangement with your provable unsecured creditors.

What does insolvent mean?

You are technically insolvent if you can’t pay all your debts as and when they fall due.

Is a Personal Insolvency Agreement the same as Bankruptcy?

A PIA is an alternative to Bankruptcy. However, by appointing a Controlling Trustee you are committing an “act of Bankruptcy”. If a PIA fails, a creditor can use this to apply to a court to make you bankrupt.

Who is a Trustee?

A controlling Trustee is a person registered with AFSA as a Trustee who can administer all administrations under the Bankruptcy Act.

What are the benefits of a Personal Insolvency Agreement?

A PIA enables you to propose affordable payments over a period of time, even if they equal less than the full amount you owe. A PIA may also allow you to offer a lump sum to creditors that is less than the full amount of the debt. PIAs also have the ability to suspend all interest and protect you from any action whilst the agreement is in place or once it’s finished. The proposal must be more than creditors would receive under Bankruptcy.

How does a Personal Insolvency Agreement work?

The controlling Trustee will prepare a report to your creditors outlining the proposal and how it will compare to their returns if you became bankrupt. All creditors then have the opportunity to vote at a meeting held by the Trustee.

What is provable unsecured debt?

Examples of provable unsecured debt include medical and phone bills, credit card debt, personal loans, the shortfall from secured debts, etc.

Do all creditors have to agree to my Personal Insolvency Agreement proposal?

No, not all creditors have to agree. If the majority in number (51%) and more than 75% of the dollar value, of those who decide to vote, vote yes, then your proposal is accepted and all creditors in the proposal are bound by it. This includes the creditors who didn’t vote or even voted no.

Can you guarantee that my Personal Insolvency Agreement will be accepted?

No, it would be unprofessional and unrealistic to make such a guarantee. It is your creditors who decide whether they accept or reject your proposal.

What’s the best way to get my Personal Insolvency Agreement proposal accepted?

Your responsibility is to make full and complete disclosure of your financial position, put forward the best offer you can and commit to complying with the terms of the agreement. This is the best way to ensure you are doing everything you can for your agreement to be accepted.

Who is AFSA?

The Australian Financial Security Authority (AFSA) is the government body responsible for reviewing and facilitating our Debt Agreement process, PIAs, Bankruptcy and other insolvency matters. Prior to 15th August 2013, AFSA was known as ITSA.

Will a Personal Insolvency Agreement affect my credit rating?

Yes, a PIA is listed on the National Personal Insolvency Index (NPII). Credit reporting agencies may access the NPII and list the agreement on your personal credit le.

Do I pay my unsecured creditors whilst I wait for them to vote on my Personal Insolvency Agreement?

We can’t tell you whether or not to pay your creditors, that is your decision. However, you must treat these creditors equally and fairly. It is important to pay your secured creditors (like mortgages, etc.) otherwise you run the risk of those assets being repossessed.

Are there any fees in a Personal Insolvency Agreement?

Your administrator will receive a fee which is approved by your creditors. The Government department (AFSA) will also charge a small fee. These amounts are usually included in your payments. Credit Repair Australia may also charge a fee.

What if my creditors continue to call once in a Personal Insolvency Agreement?

If your creditors continue to pressure you for payment, simply advise them that you are attempting to propose an arrangement with Credit Repair Australia and if they have any questions to call us on 1300 871 253.

How long does it take to get my Personal Insolvency Agreement approved?

The time it takes between appointing Credit Repair Australia and the voting dates of your creditors is approximately 35 days, however this varies from case to case.

What happens once the Proposal Insolvency Agreement is accepted?

If accepted, the creditors listed in the agreement can take no further action against you, provided you comply with the terms of the agreement.

Where can I find out more information about Personal Insolvency Agreements?


You can give us a call or visit the AFSA website for more information.

How long does Bankruptcy last?

Bankruptcy usually lasts 3 years; however, this period may be extended up to 8 years through an objection by the Trustee.

Who is a Trustee?

A Trustee is a person registered with AFSA to hold property, authority, or a position of trust or responsibility for Bankruptcies and PIAs.

Why would I become bankrupt?

You would usually become bankrupt if you had no other option to resolve your debt, or your creditors force you into Bankruptcy.

What happens to my debt once bankrupt?

After your Bankruptcy you are discharged from all your provable debts.

What is a provable debt?

A debt for which a claim can be made in your Bankruptcy.

What if someone has guaranteed some of my debt?

Bankruptcy does not affect the rights of a creditor to claim under a guarantee. The creditor is entitled to recover payment from the guarantor as per their original agreement.

What happens if I incur debt after Bankruptcy?

You will be responsible for any debts incurred by you after Bankruptcy.

Can my creditors still contact me for payment after I become bankrupt?

No. The Bankruptcy Act prevents creditors from recovering money from you after the day of Bankruptcy. If your creditors contact you for payment you should contact your Trustee immediately. However, an exception may be made if you have arranged to retain secured property, such as your house.

Can I continue to use my credit cards after i become bankrupt?

It is up to the credit provider of the card whether they are prepared to extend credit to you. However, they will be notified of your Bankruptcy.

Will I lose my car or other assets once bankrupt?

Once bankrupt you can no longer sell or deal with most of your assets or items of value. Your Trustee can sell your property for the bene t of the creditors. Some assets that are protected under Bankruptcy and cannot be sold by your Trustee include: necessary household furniture, personal effects, limited tools of trade, life insurance and superannuation policies and a motor vehicle up to a prescribed value.

Will I lose my house once bankrupt?

It is up to the Trustee to determine whether your house is sold, however the Trustee must act in the best interest of the creditors. If you are eligible, you might be able to utilise a Debt Agreement or Personal Insolvency Agreement as a way of protecting your house or other assets.

Who is AFSA?

The Australian Financial Security Authority (AFSA) is the government body responsible for reviewing and facilitating our Debt Agreement process, PIAs, Bankruptcy and other insolvency matters. Prior to 15th August 2013, AFSA was known as ITSA.

How does Bankruptcy affect my employment?

If you are engaged in particular trades or professions there may be certain restrictions imposed by professional associations or licensing authorities. If you fall in this category you should contact your professional association or licensing authority to confirm whether there is any effect on your membership or ability to practice a particular trade.

Do I need to make contributions/payments from my income once bankrupt?

If your income exceeds the threshold amount you may have to make compulsory contributions to your Trustee. However, there are certain circumstances where you may bene t from voluntary contributions.

What happens to any assets that have not been sold after I am discharged?

Those assets are not returned to you. The Trustee may sell such assets after the date of discharge.

When are my creditors notified of my Bankruptcy?

They are notified in writing within 28 days from lodgment of Statement of Affairs by the Trustee and informed of the assets and liabilities disclosed by you on your Statement of Affairs.

What are my rights and responsibilities once bankrupt?

Borrowing Money: It is an offence to borrow over a certain limit unless you inform the person that you are dealing with that you are an undischarged bankrupt. Operating a business: You can still operate a business while bankrupt. If you trade under an assumed name or business name, you will have to disclose your bankrupt status. However, you cannot be a director of a company. Change of name, address and overseas travel: You are required to notify your Trustee of all changes of name and/or address. If you wish to travel overseas you must obtain the written permission of the Trustee administering your estate, who may impose conditions of travel.

Will I have to appear in court?

Your Trustee will decide whether there are matters requiring examination before the official receiver or the court.

Will Bankruptcy affect my credit rating?

Bankruptcies are listed on the National Personal Insolvency Index (NPII). Credit reporting agencies may access the NPII and list your Bankruptcy on your personal credit le.

What happens to my ABN when I am bankrupt?

Your Trustee will notify the Deputy Commissioner of Taxation of your Bankruptcy. If you wish to continue to use the ABN you will need to contact the Australian Taxation Office and have your ABN reactivated. You will still be responsible for lodging your Business Activity Statement regardless of Bankruptcy.

What if I get a tax refund?

If the tax office is a creditor, they may keep the refund as an offset to the amount owing. Refunds from income earned before Bankruptcy can be claimed by the Trustee. Refunds from income earned whilst bankrupt are treated as income and may affect your compulsory contributions.

What if I transferred my house or any other asset of value to someone else’s name prior to Bankruptcy?

The Trustee has the power to void transactions made within 5 years prior to the Bankruptcy. The Trustee will investigate the transfer and may recover the asset if the transfer was to defeat creditors or if the payment for the asset was less than the market value or if it was a preference to other creditors.

Where can I find out more information about Bankruptcy?

You can give us a call or visit the AFSA website for more information.