--- title: Part 9 Debt Agreement Consequences description: Some debt relief solutions in Australia come with consequences and restrictions. If you want to find a debt relief solution to improve your situation you should weigh up the pros and cons of each option. We have provided a summary of Part 9 Debt Agreement consequences. image: https://lanyana.revivefinancial.com.au/hubfs/Part-9-debt-agreement-consequences.jpg --- [![DR-Logo---Powered-by-RF-(2021)-137x60px](https://lanyana.revivefinancial.com.au/hubfs/DR-Logo---Powered-by-RF-(2021)-137x60px.png)](https://debtrescue.com.au) Menu [Apply Online](https://solutions.debtrescue.com.au/online-assessment-form) [1800 003 328](tel:+611800003328) 1800 003 328 - [Recent Articles](https://solutions.debtrescue.com.au/articles) - [Debt Consolidation](https://solutions.debtrescue.com.au/articles/tag/debt-consolidation) - [Debt Agreements](https://solutions.debtrescue.com.au/articles/tag/debt-agreements) - [Informal Agreements](https://solutions.debtrescue.com.au/articles/tag/informal-agreement) - [Debt Relief](https://solutions.debtrescue.com.au/articles/tag/debt-relief) - [Bankruptcy](https://solutions.debtrescue.com.au/articles/tag/bankruptcy) - [Budgeting](https://solutions.debtrescue.com.au/articles/tag/budgeting) - [Business Debt](https://solutions.debtrescue.com.au/articles/tag/business-debt) - [Credit File](https://solutions.debtrescue.com.au/articles/tag/credit-file) - [Education](https://solutions.debtrescue.com.au/articles/tag/education) - [News](https://solutions.debtrescue.com.au/articles/tag/news) - [Research](https://solutions.debtrescue.com.au/articles/tag/research) - [1800 003 328](tel:+611800003328) Talk to a Professional Apply Online [1800 003 328](tel:+611800003328) Call Now # Part 9 Debt Agreement Consequences Posted by [Debt Rescue](https://lanyana.revivefinancial.com.au/articles/author/debt-rescue) on Apr 27, 2018 2:35:00 PM - [Tweet](https://twitter.com/share) [![Part-9-debt-agreement-consequences](https://lanyana.revivefinancial.com.au/hubfs/Part-9-debt-agreement-consequences.jpg)](https://lanyana.revivefinancial.com.au/articles/part-9-debt-agreement-consequences) The 2017 Financial Year saw 13,597 Part 9 Debt Agreements lodged in Australia. They prove to be an increasingly popular way to repay debt and avoid bankruptcy, despite the consequences of Part 9 Debt Agreements. Entering a Part 9 Debt Agreement is a serious step and it is important to understand how this agreement works. Some debt relief solutions in Australia come with consequences and restrictions. If you want to find a debt relief solution to improve your situation you should weigh up the pros and cons of each option. We have provided a summary of Part 9 Debt Agreement consequences. ## [![A Part nine Debt Agreement proposal lodged by Debt Rescue](https://debtrescue.com.au/wordpress/wp-content/uploads/2015/04/photo-e1429856988711-300x300.jpg)](https://debtrescue.com.au/wordpress/wp-content/uploads/2015/04/photo-e1429856988711.jpg?_ga=2.192516269.661145996.1554419710-1706687908.1542584291)What is a Part 9 Debt Agreement? A [Part 9 Debt Agreement](https://lanyana.com.au/our-solutions/part-9-debt-agreement/) is a legally binding agreement between you and your creditors which outlines a new affordable payment schedule. In order for this to happen, your creditors agree to pause further interest payments, remove all fees and accept a percentage of each dollar owed to satisfy your debt. A Part 9 Debt Agreement can only include unsecured debts and the majority of your creditors must agree to your proposal before it is put in place. Most creditors are likely to accept your Part 9 Debt Agreement proposal, especially if you are in genuine financial hardship. A Part 9 Debt Agreement is an act of bankruptcy, but it doesn’t mean you are bankrupt. A Part 9 Debt Agreement will help you avoid serious long-term consequences associated with bankruptcy. ## Consequences of a Part 9 Debt Agreement The main consequences of a Part 9 Debt Agreement are: - A Part 9 Debt Agreement will appear on your [credit file](https://lanyana.debtrescue.com.au/articles/how-will-a-debt-agreement-affect-your-credit-file?_ga=2.191949160.358748532.1554158526-605402969.1554158526) for 5 years - It may be difficult to access more credit while in an active Debt Agreement ## How Will a Part 9 Debt Agreement Impact My Credit File? If you are experiencing severe financial hardship, you could already have [defaults and judgements noted on your credit file](https://lanyana.debtrescue.com.au/articles/what-is-a-credit-file-and-how-can-i-fix-it). If this is the case, a Part 9 Debt Agreement may be beneficial for you. A Part 9 Debt Agreement allows you to repay your debts at an amount which you can afford. We recommend you avoid taking on new debts, which allows you to develop long-term money management skills. If you have made all repayments, at the end of 5 years, your Part 9 Debt Agreement will end. The Debt Agreement will disappear from your credit file, and you will be able to move on. ![Is-Your-Business-In-Financial-Distress](https://lanyana.revivefinancial.com.au/hubfs/DR%20Blog%20CTA%20Banner%20-%20Debt%20Agreement.gif) ## A Part 9 Debt Agreement is Considered an Act of Bankruptcy Australian debtors and creditors will find protection and support in the Bankruptcy Act 1966. This Act provides a legislative framework which forms Part 9 Debt Agreements and [Bankruptcy](https://lanyana.debtrescue.com.au/articles/declaring-bankruptcy-in-australia) processes. When you enter a Part 9 Debt Agreement or Bankruptcy you are not only bound by law but also protected. This means that if creditors continue to harass you after you have entered an agreement, they are breaking the law. A Part 9 Debt Agreement allows you to repay your debts without having to declare bankruptcy. Bankruptcy involves a number of [consequences and obligations](https://lanyana.debtrescue.com.au/articles/the-definitive-list-of-bankruptcy-regulations?_ga=2.123899464.358748532.1554158526-605402969.1554158526) which restrict your way of life. Below is a table which compares a Part 9 Debt Agreement with the consequences of Bankruptcy. ## Part 9 Debt Agreement Consequences Compared to Bankruptcy |   | Debt Agreement | Bankruptcy | | --- | --- | --- | | Debts which can be included | There are set limits on the amount of debt which can be included. The value of unsecured debts cannot exceed [the indexed amounts set out by AFSA](https://debtrescue.com.au/debt-thresholds/). Only unsecured debts may be included in a Debt Agreement. Secured debt payments must be managed outside of your Debt Agreement payments. | Most debts can be included in Bankruptcy. This includes your secured debts, which could result in your assets and property being sold to assist in paying your creditors. | | Earning capacity | A person cannot enter a Part 9 Debt Agreement if their annual after-tax income is more than a [set threshold](https://debtrescue.com.au/debt-thresholds/). Once they have entered a Part 9 Debt Agreement, there is no limit to the income earned. | A Bankrupt can only earn up to the indexed threshold. Once you exceed the threshold, 50 cents to every dollar will be contributed to the trustee and your creditors. | | Operating a business | You are able to continue to be a director of a company and running your business, but you may have to disclose your Part 9 Debt Agreement to others who deal with your business. | You cannot be a director of a company or be involved in its management without permission of the court. You may be able to operate a business while bankrupt but in some industries, you must disclose are bankrupt. | | Can I own real estate/property? | Yes, as long as you maintain the minimum repayments on your mortgage you may own property while in a Part 9 Debt Agreement. | No. You may not own property while you are bankrupt. However, there are ways you can keep your family home. [Watch this video](https://www.youtube.com/watch?v=HFqgDMgGVP4) to find out more. | | Vehicles | There is no restriction on the number or value of vehicles you own while you are in a Part 9 Debt Agreement. | The value of the car you drive must not exceed [an indexed amount set by AFSA.](https://debtrescue.com.au/debt-thresholds/) | | Credit Rating | A Part 9 Debt Agreement is noted on your credit file generally for 5 years as long as you keep up with repayments. After that, the Part 9 Debt Agreement will be removed from your Credit File. | Bankruptcy is marked on your credit file for a minimum of 5 years. The period of Bankruptcy generally lasts for 3 years. It will remain on your credit file for the remaining 2 years noting you as a discharged bankrupt. Your period of bankruptcy may be extended up to 7 years by your trustee. | | Travelling Overseas | There is no restriction of travelling overseas when you are in a Debt Agreement | You are able to travel overseas while you are Bankrupt, but you must apply for written permission from your Bankruptcy Trustee before you go. Each application will cost $150. | Learn more about the differences between [Bankruptcy and Part 9 Debt Agreements](https://lanyana.debtrescue.com.au/articles/debt-agreement-vs-bankruptcy). ## Are There Any Long-Term Part 9 Debt Agreement Consequences? Part 9 Debt Agreement consequences only apply while you are in the agreement. There are no long-term consequences. In fact, if you are really struggling with debt, a Part 9 Debt Agreement offers a simple and effective debt relief solution. A Part 9 Debt Agreement won’t have an impact on your job, your wages, the assets you own, the car your drive or any property you own. It will simply provide you with an achievable action plan to repay your debts. ## The Benefits of a Part 9 Debt Agreement If you are struggling with debt, chances are you will know the horrible feeling in the pit of your stomach, the dread of answering your phone and the constant panic associated with opening the mail. Debt is not just a financial problem. It will manifest and cause problems with your [relationships, family and health](https://lanyana.debtrescue.com.au/articles/debt-stress-survey). So if someone told you about a solution which can remove your stress and angst while solving your debt problem, you might be quick to jump. ### No More Harassing Calls from Creditors! A Part 9 Debt Agreement will stop creditors from harassing you! Once you engage our services, we become the point of contact for all your debts. That means your creditors will need to speak to your Case Manager and not you, about your debt. ### No More Interest! Another benefit of a Part 9 Debt Agreement is that your debts stop accruing any further interest during the agreement. It is common for Debt Rescue negotiators to be able to whittle down the cost of your debts a little also, meaning you could pay less in the long run. Although a Part 9 Debt Agreement is an [act of bankruptcy](https://debtrescue.com.au/declare-bankruptcy/), you are not declaring bankrupt. The restrictions and obligations that come with bankruptcy are not relevant to you, and you are free to live your life. Just make sure you keep up with those repayments! ## Where to from Here? If you need relief from debt but are not sure which solution suits you, give us a call! Debt Rescue Case Managers take your situation into account and tailor the best solution for you. They will explain the benefits and consequences of a Part 9 Debt Agreement so you can make an informed decision before proceeding. If you need to [get out of debt](https://lanyana.revivefinancial.com.au/articles/debt-agreement-proposals-to-get-out-of-bad-debt), give us a call on [1800 003 328](tel:1800%2000%203328). For more information on Debt Agreements and how they can help you find financial relief, check out our [Debt Agreement page.](https://lanyana.com.au/our-solutions/part-9-debt-agreement/)  Topics: [Debt Agreements](https://lanyana.revivefinancial.com.au/articles/tag/debt-agreements) ## More Articles - Recent Articles - Debt Consolidation - Debt Agreements - Informal Agreements - Debt Relief - Bankruptcy - Budgeting - Business Debt - Credit File - Education - News - Research ### Subscribe Here! ### Get the Latest Debt Free and Budgeting Advice straight to Inbox Free ### Recent Posts ### If you are in too deep with debt, we here to rescue you. 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Liability limited by a scheme approved under professional standards legislation. ## What Kind of Debts Do You Have? ![](https://debtrescue.com.au/wp-content/uploads/2020/11/Credit-card-icon.png) Credit/Store Card ![](https://debtrescue.com.au/wp-content/uploads/2020/11/Personal-loan-icon.png) Personal Loan ![](https://debtrescue.com.au/wp-content/uploads/2020/11/Pay-day-loan-icon.png) Pay Day Loan ![](https://debtrescue.com.au/wp-content/uploads/2020/11/tax-debt-icon-green.png) Tax Debt ![](https://debtrescue.com.au/wp-content/uploads/2020/11/Unitilties-Icon.png) Utility Bill ![](https://debtrescue.com.au/wp-content/uploads/2020/11/other-icon.png) Other Please select at least one type of unsecured debt. Next ## How Much Money Do You Owe? $10,000 $1,000 $100,000+ Next ## Find Out How To Reduce Your Debt ### Your First Name ### Your Last Name ### Your Email ### Your Phone Phone number must be 10-digits long and begin with a 0. (e.g. 04 1234 5678) ### Your Post Code Post code must be 4-digits long (e.g. 4567) Some of your details appear incorrect. Please update the highlighted fields and re-submit. Submit ## Congratulations! ### You've taken the first step to becoming debt free Let's keep the momentum going and complete our assessment form to receive an instant debt analysis. [Start Instant Assessment](https://solutions.debtrescue.com.au/online-assessment-form) By submitting this form you acknowledge that you have read and accept our [Privacy Policy](https://lanyana.com.au/privacy-policy/)