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 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 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. Both Part 9 and Part 10 Agreements are acts of bankruptcy.
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 involves you repaying your debts over a three 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 offers a holistic solution that helps you pay off your debts – but without filing for bankruptcy or entering a Part 9 or Part 10 debt agreement.
Solve My Debt Now staff negotiate with your creditors to reach a settlement that allows you to clear your debt in 3-5 years. Other benefits include:
- Negotiation on your behalf to reduce your overall debt
- Negotiation on your behalf on unsecured debts and some secured debts
- We can work with any amount of debt over $2,000.
- Your credit file will remain free of a 5-year bankruptcy listing.
- Negotiation on your behalf to set up affordable creditor repayment plans that fit within your budget.
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!