Business Debt Management

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Personal Debt Management



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Debt Agreement 

A debt agreement is a binding arrangement between you and your creditors. It is flexible and you can propose any type of arrangement that best suits you. This may include a moratorium to allow you to get back on your feet before you start making payments. A lump sum borrowed from a friend or relative or a payment plan to an approved amount.


The proposal should be more than what your creditors would otherwise get in bankruptcy. Your creditors will vote on the proposal so the more attractive you make the offer the more likely they will accept it.


There are limits and conditions associated with this option and would suggest that you review these limits to ensure you meet the criteria.


Related Links

Bankruptcy Act 1966

Part IX Debt Agreement Section 185 IX debt agreement eligibility

Current Index Amounts


Frequently Asked Questions About Part IX Debt Agreements


How is a debt agreement made?

We can help you with the proposal. A debt agreement proposal is prepared and lodged with AFSA using the appropriate forms.  

AFSA must approve the debt agreement proposal in the first instance and then it is sent to the creditors to vote on.


If after the voting period is over and if the creditors accept the proposal the debt agreement proposal becomes a debt agreement and is registered on the NPII.


Who can propose a debt agreement?

You are eligible to lodge a debt agreement proposal if, you are insolvent (unable to pay their debts as and when they fall due), have not been bankrupt, had a debt agreement or given an authority under Part X of the Bankruptcy Act in the last 10 years, have unsecured debts, assets and after-tax income for the next 12 months all less than the indexed amounts and pay the debt agreement lodgement fee specified in fees and charges



Can a debt agreement be varied or terminated?

Yes it can. If your circumstances change, there is the option to lodge a proposal to vary or terminate the debt agreement.  Also, if you do not comply with the terms, your debt agreement may be automatically terminated by the Official Receiver.  



When will a debt agreement end?

A debt agreement finishes when all obligations and payments have been fulfilled.

You are then released from all the debts covered in the debt agreement.  

The National Personal Insolvency Index (NPII) will be updated once your administrator notifies the Official Receiver.

A debt agreement can also end when the court orders the debt agreement be terminated or declared void or the debt agreement is terminated by creditors.

The Debt Agreement - Part IX



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