Part IX Debt Agreement

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 over time (which is generally less than the total amount which the person owes to his or her 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 equitably distribute the funds received to creditors.

The benefits of a Part IX Debt Agreement, include avoiding bankruptcy and the restrictions to which a bankrupt is subject.  A Part IX Debt Agreement also provides for the consolidation of a person’s debts such that the person is only required to make manageable payments to the administrator of the Part IX Debt Agreement and he or she is not required to make any further payments in respect of unsecured debts, such as credit cards and loans.

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.