When it comes to the topic of debt, everyone wants to stay well away from it. It can be a sensitive subject and depending on the extent of your debt, you may already be getting a lot of hassle coming your way. If you are looking at the Part IX Debt Agreement and need some clarification on what it all means, this article is the perfect place to start.
A debt agreement, often referred to as the part IX debt agreement, is when a debtor makes an agreement with their creditors and proposes to pay off their debts at an affordable rate.
So if you cannot pay off the money you owe at this moment in time and want to ensure your house or other valuable assets are kept safe and sound, you can propose the Part IX Debt Agreement to your creditors.
They will then consider your proposal and either accept or decline it. If your proposal is accepted, you will then enter into a debt agreement and this will go on your credit history for the next five years.
Most companies will require an initial fee before you enter into the contract with them and normally charge an extra monthly administration fee.
What to Consider When Preparing Your Proposal
When you are getting your offer ready to be considered, it is crucial to be forward-thinking and anticipate anything that could happen in the future. It is also important to accurately evaluate your current situation. Don’t be tempted to over valuate or under valuate as you want to make sure everything goes smoothly when preparing your part 9 debt agreement proposal.
Think About The Following:
- What will be acceptable to your creditors
- How much you can realistically afford
- What happens if your situation changes
When you are weighing up the pros and cons of debt agreements, it’s good to remember that entering the part 9 agreement gives you more of a safety buffer compared to choosing an informal agreement. You must be prepared to meet the requirements outlined by the creditor however if you do not, it is likely that your proposal will be declined.
Another good thing about going down this route is that the same payment rate is offered to all creditors.
So how do you go about making the part 9 debt agreement in the first place? Your first point of contact will be the debt agreement administrator who will help you prepare the proposal and ensure all the correct forms are used before being sent to the Official Receiver.
Once the proposal is sent, it is out of your hands and you must wait for the verdict! If the creditors accept, then you will be bound to the agreement and no longer declared bankrupt. Once the agreement commences, any unsecured creditor is paid according to the proportion of the amount owed to them. On the other hand, when a creditor is secured, they can take assets away which you have already agreed can be taken if you are in deposit.
If you are seriously contemplating opting for a part 9 debt agreement, you will need to be prepared to pay the fees which may range from $880 to $1320. The price you have to pay will depend on how complex your proposal is. In some cases, the creditor will make special allowances and discounts for those debtors who are having some real financial trouble and will make some leeway so you won’t have to pay a set-up fee upfront.