Part IX & Part X Debt Agreement

A Part IX Debt Agreement is a formal arrangement between an individual and their unsecured creditors under the Bankruptcy Act. It is a government-monitored process administered by a Registered Debt Agreement Administrator.

A Part IX Debt Agreement is a legally binding arrangement between an individual and their unsecured creditors under the Bankruptcy Act. It allows people with lower levels of debt, modest assets and limited income to settle debts through an affordable repayment plan.

Once accepted, creditors must stop recovery action, interest is frozen, and repayments are made under a structured, approved agreement administered by a Registered Debt Agreement Administrator.

Eligibility for a Part IX Debt Agreement

You may be eligible for a Part IX if you:

• Have unsecured debts, assets and after-tax income within the limits set by AFSA
• Have not been bankrupt or in a debt agreement within the past 10 years
• Can afford the proposed repayments
• Meet all other AFSA requirements for income, assets and debt levels

These limits are updated regularly by AFSA. Our team can confirm your eligibility and ensure the agreement is appropriate for your circumstances.

A Part X Personal Insolvency Agreement (PIA) is a flexible alternative for individuals with higher debts, more substantial assets or greater income who do not meet the criteria for a Part IX.

A PIA involves appointing a Controlling Trustee to review your financial situation and present a proposal to creditors. If creditors approve, the agreement becomes legally binding, allowing debts to be settled through contributions, asset realisation or a combination of both.

Eligibility for a Part X Agreement

You may consider a PIA if you:

• Do not qualify for a Part IX due to higher debts or assets
• Want to avoid bankruptcy while resolving significant personal liabilities
• Have the ability to offer a settlement or structured repayment plan
• Require a more flexible solution due to business or personal circumstances

A PIA is often suited to professionals, business owners and individuals with assets to protect.

These options may be suitable if you:

• Are unable to manage unsecured debts through normal repayment arrangements
• Want to avoid the consequences of bankruptcy
• Have assets or income that could be better managed under a debt agreement or PIA
• Need immediate relief from creditor pressure, interest and recovery action
• Want a clear, structured and legally binding path to resolve debt
• Prefer a predictable repayment plan that reflects your financial capacity

Part IX is ideal for lower-income individuals with modest debts and assets.
Part X is suited to individuals with higher debts, income or property.

1. Assessment and eligibility review
   We assess your financial situation to confirm AFSA eligibility.

2. Proposal preparation
   An affordable repayment proposal is prepared based on what you can reasonably pay.

3. Lodgement and creditor vote
   Creditors vote electronically. If a majority (by value) agree, the proposal becomes binding.

4. Repayment period
   Payments are made over an agreed timeframe, usually 3–5 years.

5. Completion
   Once completed, included debts are finalised and you are released from the agreement.

• Appointment of a Controlling Trustee
  The Trustee investigates your financial affairs and prepares a report.

• Proposal to creditors
  A settlement or repayment proposal is prepared.

• Creditor meeting and vote
  Creditors decide whether to accept or reject the proposal.

• Agreement becomes binding
  If accepted, the proposal is formalised as a PIA.

• Fulfilment of obligations
  You meet your agreed commitments through payments, asset realisation or both.

Most unsecured debts can be included, such as:

• Credit cards
• Personal loans and overdrafts
• Unsecured business debts
• Tax debts
• Store cards and unpaid bills
• Debts from previous business activities

Some debts cannot be included, including HECS/HELP, child support, court fines and certain penalties. We help you understand exactly what applies in your situation.

A Part IX or Part X Agreement offers a number of important benefits for individuals facing unmanageable debt, including:

• Stops creditor calls, legal action and interest
• Provides a structured, affordable repayment plan
• Helps avoid bankruptcy and its long-term restrictions
• Offers predictable outcomes and a legally binding framework
• Can protect assets depending on structure
• Provides a clear path out of personal financial pressure
• Reduces stress by giving certainty and stability

These advantages make Part IX and Part X Agreements an effective pathway for regaining control, reducing stress and moving toward financial stability.

Before committing to a Part IX or Part X Agreement, it’s important to understand how the decision will affect your financial position, your assets and your long-term plans. Key considerations include:

• Whether another solution may be more suitable, including bankruptcy, negotiation or restructuring
• How your assets and income will be treated under the agreement
• Whether the repayments will remain affordable over the life of the agreement
• How the arrangement may affect your credit file or future finance applications
• Whether your employment, licences or professional roles may be impacted
• Eligibility requirements set by AFSA, which determine whether you qualify for a Part IX or need to consider a Part X
• The timing of entering an agreement and whether early action may preserve more options

Making an informed decision is essential. With clear advice and proper structuring, a Part IX or Part X Agreement can provide certainty, legal protection and a realistic pathway to resolving unmanageable debt.

If you would like to understand your eligibility, compare all available options or explore whether a debt agreement or PIA is the right solution, the de Jonge Read® team is here to help. Contact us for a confidential, no-cost discussion about the safest way forward.