There’s a lot of confusion in the Australian community about what, exactly, bankruptcy involves and how good, decent people can solve their debt problems.
So we’re now going to explain:
- What bankruptcy is
- What Part 9 and Part 10 debt agreements are
- How you can escape your debt nightmare with Solve My Debt Now
Bankruptcy
Bankruptcy is a legal declaration that you’re unable to repay your debts and typically lasts for three years and one day.
Bankruptcy will clear you of most of your unsecured debts, such as:
- Credit card debt
- Electricity bills
- Internet bills
- Medical bills
- Unsecured personal loans
However, if your debt is tied to a secured asset, the creditor (the person you owe money to) may be able to seize that asset to recover their money. This might include:
- Your home being seized to pay off a mortgage
- Your car being seized to pay off a car loan
You can volunteer for bankruptcy – this is called a debtor’s petition. Or someone to whom you owe money to can ask a court to make you bankrupt – this is called a creditor’s petition.
Bankruptcy might sound like a quick, easy solution to your debt problem, but it does come with consequences:
- You will be permanently listed on the National Personal Insolvency Index (a public register)
- Your credit file will be affected for at least five years which will make it hard to get a loan
- You must disclose your financial information to your trustee (the official who oversees your bankruptcy)
- The trustee may seize some of your income and assets to reduce your debt
- You need permission from the trustee to travel overseas
Part 9 and Part 10 debt agreements
Part 9 debt agreements and Part 10 debt agreements are legal arrangements between you and your creditors that allow you to clear your debts and are a form of bankruptcy.
Here are the key differences between the two:
Criteria | Part 9 debt agreement | Part 10 debt agreement |
Unsecured debt limit | $115,733.80 | No limit |
Income limit | $86,800.35 | No limit |
Unsecured asset limit | $231,467.60 | No limit |
Maximum term | 5 years | No limit |
Overseer | Administrator | Trustee |
Under a Part 9 debt agreement (also known as a debt agreement), you and your creditors agree on a repayment plan for a capped amount of unsecured debt, which often involves you repaying your debts over a five year period.
A Part 10 debt agreement (also known as a personal insolvency agreement) is similar, but generally involves bigger debts or more complicated financial predicaments.
Again, Part 9 and Part 10 debt agreements have serious consequences:
- You will be listed in the National Personal Insolvency Index – temporarily for a Part 9 and permanently for a Part 10
- You must disclose personal details to the administrator/trustee
- Secured creditors may still seize your assets (your home or your car)
- Depending on your profession, you may be expelled from your industry association
- Your credit file will be affected for at least five years
- It will be hard to get a loan for at least five years
Solve My Debt Now
Solve My Debt Now is a holistic solution that helps consumers clear their debts – but without filing for bankruptcy or taking out a debt agreement.
Solve My Debt Now staff negotiate with your creditors to reach a settlement that allows you to clear your debt in three years (not five). Other benefits include:
- Negotiation on your behalf to reduce your overall debt owing
- Negotiation on your behalf on any type of debt (secured or unsecured)
- We can work with any amount of debt (large or small)
- Your credit file will remain free of a part 9 debt agreement or bankruptcy notice
Solve My Debt Now staff are experienced, non-judgmental professionals who work hard to deliver great outcomes. Contact them today for a confidential chat on 1300 070 672.
We Can Help You – Today
Book your FREE Consultation now and talk to one of our qualified SMDN Advocates that will help put you back on the road to financial freedom!
I dont want bankruptcy at all, just help to manage debts and make a budget with my income. Like mybudget
I need you help
I have 5 personal loans and 2 After pays which amount to about $3500.I want to put them all together in one manageable loan and reduce the amount of interest.
Regards,
Helen Hanrahan
Want to be debt free
I just wanna get my loans ova and done with so I’m not in debit anymore
Need to find debits and hopefully negotiate a good pay out price as I have 10grand hoping to set my self ready for 1st home buyers
Helpful
I hope I can get a loan
Please help me clear my Dept.
Hi I want help to get out of debt Quickly
Hi wanna get my debt out quickly and fast