Part IX Debt Agreements What Are They? How Do They Work?

Part IX – Debt Agreements

A number of options are available to people who are insolvent or can not pay their debts as and when they fall due. One of these options is to enter into a binding arrangement with creditors to satisfy their debts in part or in full.

The Australian Law Reform Commission has concluded in the General Insolvency Inquiry that there is a need in Australia to provide cost effective and efficient ways for people to manage debt problems with creditors. Debt Payment Plans have now been implemented in the new Part IX of the Bankruptcy Act 1966 (Cth).

Eligibility of a part IX Debt Agreement

1. Limited assets and liabilities (less than $54,254.20).

2. Annual after tax income of less than $27,127.10.

How does the Part IX Debt Agreement work

1. A Debtor submits a proposal and Statement of Affairs to the Official Trustee who assesses the eligibility requirements under Part IX.

2. The Insolvency Trustee Service Australia advises the Creditors of the proposal and provides a summary of affairs.

3. Creditors vote on whether to accept or decline the proposal by post or by meeting.

4. Whilst the proposal is being considered, a moratorium applies to creditors against the debtor.

5. The debt agreement becomes effective when the proposal is accepted by a majority and at least 75percent of the dollar value of debt owing to the creditors voting.

6. The agreement remains in force until it ends, is varied or terminated.

If you want to speak to the Insolvency Professionals about entering into a Part IX debt agreement please call 1300 … …