Part IX Debt Agreements

A Part IX Debt Agreement is an alternative to bankruptcy.

In order to avoid bankruptcy, a person who has net assets, creditors and income under a certain statutory limit, may put forward a proposal for a Part IX Debt Agreement.

A proposal for a Part IX Debt Agreement will usually involve a person agreeing to pay a certain amount in a lump sum or by instalments over time (which is generally less than the total amount owed to creditors). If the proposal is accepted by the person’s creditors, then it is binding on all unsecured creditors and the administrator of the Part IX Debt Agreement will collect the amount(s) payable by the person and distribute the funds to creditors.

Benefits of a Part IX Debt Agreement

The benefits of a Part IX Debt Agreement, include avoiding bankruptcy and the restrictions to which a bankrupt is subject. The person is only required to make payments to the administrator of the Part IX Debt Agreement and no longer has to deal with or make payments to individual creditors who are to participate in the distribution of funds (e.g. credit cards and loans).

Provided the Part IX Debt Agreement is complied with, most debts owed to creditors are released, although there are some exceptions as there are certain types of debts which are not released by either a Part IX Debt Agreement or by bankruptcy.

Advice Regarding Part IX Debt Agreements

If you are seeking advice regarding the possibility of putting forward a proposal for a Part IX Debt Agreement, please contact our Brisbane or Gold Coast office and our experienced staff will be able to assist you.