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Part IX Debt Agreement

If bankruptcy is on your mind then you should first consider a Part IX Debt Agreement. While Just Budget does not offer this service directly, our affiliate, Debt Fix Pty Ltd does. Find out how this works below.

Part IX Debt agreements

Formal Part 9 Debt Agreements

Just Budget Debt Support

How Do Part 9 Debt Agreements Work?

How can a Part 9 Debt Agreement Help?

avoid bankruptcy with a part 9 debt agreement

Debt Problems can happen to Anyone

One of the most important things to remember is that debt problems can happen to anybody, and thousands of other Australians are in the same shoes as you right now. What matters, is how you deal with it. Since you are reading this right now, it already shows that you are doing the right thing by looking for solutions to your debt problems. This is the first step and it is a brave one.

Just Budget has assisted people in coming to terms with seemingly uncontrollable debt since 2013, helping Australians to find solutions to their money worries. A caring team of debt specialists are trained and experienced in helping to alleviate the stress associated with multiple debts. 

The primary goal of Just Budget is to put you on the best path to becoming debt-free. A Part IX Debt Agreement is one way to do this. If you cannot afford to repay your current debts and feel like you’re stuck at a dead-end, this is something to consider, but not enter into lightly. Our affiliate, Debt Fix has helped thousands of Aussies to avoid bankruptcy thanks to a Part IX Debt Agreement.

a solution to Overwhelming Debt

When you are in real strife, and considering bankruptcy, there might be a way to avoid it. While a Part 9 Debt Agreement (also called a Part IX or Formal Debt Agreement) has serious repercussions on you future credit rating, it can prevent the much harsher restrictions of declaring bankruptcy. 

We encourage you to explore all you options before entering a Part IX as there are restrictions and income limits for this type of contract.

The next step is taking 5 minutes to enquire with Just Budget so we can get the ball rolling and start changing your life for the better. The sooner that you make the first move to get a grip on your debt and take back control, the sooner you will be able to sleep easy again.

part 9 debt agreements

Part 9 Debt Agreement - an alternative to Bankruptcy

If you are seriously struggling with your debts and are considering declaring bankruptcy then take a deep breath, look up and seek an alternative option in the form of a Debt Agreement (also known as a Part IX Debt Arrangement).

Just Budget’s affiliate, Debt Fix could help with this.

Meanwhile, here at Just Budget we can consider whether you could potentially qualify for an Informal Debt Arrangement.

Informal Debt Arrangements do not fall under the Bankruptcy Act where Part IX Agreements do.  There are more consequences from a Part IX Agreement than an Informal Debt Arrangement which is why the Informal Debt Arrangement should always be considered first.

If an Informal Debt Arrangement is not for you then we can refer you to our Part IX Debt Agreement specialist Debt Fix Pty Ltd.

Part 9 Debt Agreements Are Strictly Legislated

Also known as Part IX, while similar to an informal debt arrangement, Part 9 Debt Agreements have stricter regulations since they are structures legislated by the Australian government to assist people in resolving their financial issues.

This means that they have stricter terms to qualify and tend to be more restrictive than informal debt arrangements. However, a Part IX Debt Agreement may provide a better alternative than going bankrupt.

Part 9 Debt Agreements are a formal way of settling most debts without going bankrupt. It’s an agreement between you and creditors. There are however limits and restrictions that we detail further in our FAQ section.

Restrictions of Formal Part 9 Debt Agreements

A Part IX Debt Agreement is one solution if you cannot afford to pay what you owe. It is crucial that you understand formal debt agreements come with some restrictions.


Only unsecured debts are included in a Part 9 debt agreement

This means if you have a mortgage or a car, then these are not included in the agreement.

A Debt Agreement remains on your credit file for up to 5 years

This is to alert potential lenders that you have been in financial difficulty where you were unable to afford your debt repayments in the past.

For some lenders, you may not have to declare that you are in a debt agreement. You can still apply for bad credit loans.

If you need to Borrow money during these 5 years:

  • For some lenders, you may not have to declare that you are in a debt agreement.
  • You can still apply for bad credit loans.

There are fees for lodging Part 9 Debt Agreements

While debt agreements do cost money to implement, it’s money well spent. Some of the fees are government charges and others are paid to the administrator.

Fees are calculated based on the amount of debt and the client’s capacity to repay. The cost of a debt agreement is not a fixed charge. Because the cost depends entirely on the circumstances of the client, it can be more affordable than the cost of paying out the entire remaining debt.

Ultimately, you can think of a formal debt agreement as a small investment into your financial future.

Declaring bankrutpcy Australia

Who can enter into a debt agreement?


Part 9 Debt Agreement eligibility criteria

You Must Honour Your Legal Obligations

Because a DA is a legal agreement – once confirmed, you are protected by law and your creditors cannot demand a greater debt repayment amount than what was agreed upon. However, this also means that it is your legal obligation to honour the agreement and responsibly repay the new amount that you do owe.

If your Debt Agreement is terminated, your debts will be reinstated and you will no longer have protection from your creditors under the act. Interest and charges will also be reinstated as if the agreement never happened.

Not only will this mean you will have to repay the original amount as before, but this record will also remain on your credit file for 5 years.

If your circumstances have drastically changed since entering into the agreement and you can no longer afford the set payments then you can seek further help and there may be a further solution to help you to avoid the path of bankruptcy. 

It is important to seek help if you are ever struggling with debt, no matter how big or small. If debt starts to build up then it can very quickly spiral out of control.

formal debt agreement

How a debt agreement works


You negotiate to pay a percentage of your combined debt that you can afford over a period of time.


Upon entering a DA, your old creditors will be paid off and out of the picture. You can expect to benefit from a lower overall repayment which you can utilise by lowering your monthly repayments or extending the length of your loan.

Part 9 Debt Debt Agreements Are not the following:

Part 9 Debt Agreements Can Offer a Fresh Start

Formal Part 9 Debt Agreements involve restructuring your debts by varying the contract, term and payments creditors will accept if you have experienced an unexpected, significant and permanent change to your circumstances that has resulted in you being unable to manage your current liabilities. Unlike an informal arrangement, a Part 9 Agreement has very strict requirements.

Lower your debt for easier repayments

Lower Overall Debt Means easier Repayments

With a lower debt amount, you will find it easier to keep on top of repayments, so in the long run, you can expect to benefit from an improved credit score.

While Just Budget do not administer Part IX Debt Agreements ourselves, we are still help. Our affiliate, Debt Fix could help you to save money and manage your debt better so you can move forwards with your finances positively.

Just Budget can help point you in the right direction. If you wish to know more or would like to pursue an informal debt arrangement or Part 9 Debt Agreements , contact us today.

If you need further clarification on debt agreements and how they may affect your circumstances, contact AFSA Australian Financial Security Authority which is the Government agency that is responsible for overseeing the operation of the Debt Agreement Scheme.

Part IX Debt Agreements Vs Informal Debt Agreements

Part 9 Debt Agreements

  • Interest and charges on your unsecured debts are frozen
  • Your creditors will not be able to pursue any further court action, given you keep to the arrangement terms
  • A debt agreement is a formal way of settling most debts without going bankrupt
  • The agreement binds most unsecured creditors
  • You won't have to deal with creditor letters or phone calls
  • Your name is on the National Personal Insolvency Index for five years or more.
  • There are income, asset and debt thresholds.
  • If your creditors don't accept your proposal, any one creditor can use your proposal in court to make you bankrupt
  • You are required to stick to your budget under the terms of the arrangement

Informal Debt arrangements

  • Interest can be frozen or total outstanding debt can be reduced.​
  • We can help negotiate your current credit terms​
  • Won't impact your credit rating as much as a Part IX Debt Agreement​
  • We manage your multiple debt repayments
  • You won't have to deal with creditor letters or phone calls
  • Informal debt arrangements do not appear on the public register and are less likely to appear on your credit file
  • You are not required to declare your assets
  • Your debts will still need to be repaid and terms of agreement adhered to
  • You are required to stick to your budget under the terms of the arrangement

Part 9 Debt Agreements FAQs

Once you’ve signed a formal Part 9 Debt Agreement it is listed on your credit report and will remain there for 5 years. One of your legal obligations is that you have to tell new credit providers if the credit limit you are applying for is greater than $5,934.

(source: Australian Financial Security Authority – AFSA).

If you are concerned about the impact of a formal debt agreement, you may want to consider out alternative, which is an informal debt arrangement that offers similar benefits, without the restrictions or drastic impact of a formal agreement.

Your name will also be placed on the National Personal Insolvency Index for 5 years or more.

Your professional career options can be significant;y limited by a Part IX Debt Agreement.

Below is a list of possible restrictions on continuing with certain trades or professions for those considering Part 9 Debt Agreements. If your trade or profession is listed it may not mean cannot continue your career, but you will have to check with the related government agency or professional association to check how a Part 9 Debt Agreement would impact your licence or membership.

This is not the full list of all trades and professions but offers some insight into the decision to sign a formal Part 9 Debt Agreement:

Accountants, Builder’s License, Company Director/Manager, Business in currency, Electrical License, Escort Agencies, Finance Broker and Security Dealers, Gaming Room employees, Gass Fitter license, Investigator license, Justice of the Peace, Member of parliament, Police, Plumber license, Real estate license, Pawnbrokers, Secondhand vehicle dealer license, Security license, Solicitors, Travel Agent License.

(Source: AFSA)

It is really important that you get the right information and advice before entering into Part 9 Debt Agreements, to ensure a Part 9 Debt Agreement is the right choice for you. At Just Budget we encourage our clients to speak with a financial counsellor.

If you’ve been served with a bankruptcy notice, we recommend that you get free legal advice immediately.

Our goal is to ensure you make an informed choice and that it is in your best interests.

(Source: Money Smart)

Part 9 Debt Agreements cover unsecured debts, secured debts, joint debts and tax debts.

Unsecured debts include credit and store cards, unsecured personal loans and payday loans, gas, electricity, phone and internet bills, overdrawn bank accounts and unpaid rent, medical, legal & accounting fees.

Debts you may be liable for under Part 9 Debt Agreements include court fines, student loans e.g. HECS/HELP/SFSS, victims of crime, debts you incur after the date we receive your proposal.

Make sure to check with your creditor to see if you are still liable for the following debts in Part 9 Debt Agreements: debts you incur by fraud, child support debts, fines, penalties and court-ordered payments, overseas debts (this depends on the laws of the country where the debt originated).

Secured debt is where you put up an asset (such as a house). If you don’t make your repayments the creditor can repossess the property to recover the debt. Examples include mortgage where the house is the security, car loans with the car as security, hire purchase or rent to buy (e.g. white goods and furniture as security).

If the goods repossessed don’t cover the remaining debt you have a ‘shortfall’. Secured creditors can elect to take part in your debt agreement and receive payments for the remaining debt you still owe.

You must contact your secured creditors to discuss your intentions with the debt. If you’re unable to maintain the payments, you may be able to surrender the goods.

A joint debt is a debt you share with another person. You can include them in an agreement, however, a creditor can still pursue the other person for the debt. If both people are in a debt agreement, you should both include the debt in your paperwork.

You can include Australian Taxation Office (ATO) debts in your agreement. However, the ATO can keep your tax refunds if you owe the Commonwealth a debt.