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 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!