Debt Agreements are part of the Bankruptcy Act, however, once you have completed your payments, usually after 3 years, your name is removed from the National Personal Insolvency Index (NPII)

Depending on the amount of debt you have, payments will vary – usually over a number of years so it’s wise to remember that as your unsecured debts will be bundled together , that your payments are manageable and will still leave you enough money to live from and pay your normal costs of living, eg: rent/mortgage, household bills etc. There is simply no point entering into a Part IX Debt Agreement if you cannot afford to maintain the regular payments along with your usual household bills.

From speaking to hundreds of people who enter into these agreements, this is often the biggest difficulty and they find it very hard to maintain or keep up the payments for their agreement. Should you fail to keep payments up to date, your creditors can and often do, take action against you.

This is why it is SO important to ensure a complete budget is done for your household. Without this, it may make your life more difficult entering into such an agreement. However, if all circumstances are taken into consideration, in an honest way, a Debt Agreement might be the best solution for you.

Part IX Debt Agreements are usually your last option to avoid bankruptcy.

A Debt Agreement may suit some situations/people however, if your circumstances change during your agreement period, such as losing your job, reduction of work hours, or simply changing to a job that doesn’t pay you as much, it may prolong the agony associated with severe financial pressures. 

A large volume of debt agreements are never completed due to the above reasons and many other situations such as not allowing yourself enough to live on when doing your household budget.

For some, a Part IX Debt Agreement is a great option. If you have a limited amount of equity in a home or investment properties and a high enough income to manage a realistic budget with money left over to repay your Part IX Debt Agreement, then it may be your best solution.

It can turn your problems around without actually declaring voluntary bankruptcy. The important part is making sure it’s going to relieve your stress and pressure – NOT add to it!