tick iconWhat is a part 9 debt agreement?

Part 9 or part IX debt agreement is a binding legal agreement with your creditor(s) to repay your debts in a stipulated manner.

It’s referred to as ‘Part 9 Debt Agreement’ because the debt agreements are administered in accordance with Part IX of the Bankruptcy Act 1966.


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How much can I borrow?

  • Borrow up to 95% of the property value with one of our specialist lenders. (Stricter lending criteria applies)
  • Borrow up to 80% of the property value with a major lender (conditions apply).

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Will I get approved?

  • Yes, if you have paid off your Part 9 debt agreement, we can help you get a home loan.
  • You cannot buy a property while in a debt agreement.
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Interest rates available:

Standard home loan interest rates are available for borrowers with a large deposit. Contact us to learn more.


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Discover if you qualify:

Our mortgage brokers are specialists in home loans for people with impaired credit.

Can I get a home loan while in part 9 debt agreement?

No, you cannot buy a property while in debt agreement.

However, we can assist you if you are refinancing the debt agreement into your home loan.

We know a few specialist lenders who can help you if you’re currently in a part 9 debt agreement.

If you’re close to the discharge date, then this is favourable to lenders.

However, many lenders will only consider your situation if you’re discharged from the debt agreement.

How long does a Part 9 Debt Agreement stay on your credit file?

Your debt agreement will stay on your credit file for 5 years from the entered date and might affect your ability to get a home loan during this period.


What if I’ve just paid off my part 9 debt agreement?

You can apply immediately if you’ve paid off your part 9 debt agreement. You don’t have to wait 5 years for the debt agreement to clear off your credit file to apply.

Many lenders might only accept your application if you’ve been discharged from the debt agreement for up to 2 years.

Fortunately, we know non-conforming or specialist lenders who can accept your application if you have been discharged from part 9 debt agreement for at least 12 months.

Furthermore, some of our lenders can consider your application after one day of your discharge from part 9 debt agreement.

Call us at 1300 889 743 or fill in our free assessment form to talk to our mortgage brokers.


What if I have a large deposit?

If you’re in a strong financial position then we may be able to help you to qualify with a major lender that’s more accepting of debt agreements.

To qualify for a major lender with a discounted interest rate you must:

  • Borrow no more than 80% of the property value.
  • Have a very good reason for getting into the Part 9 agreement.
  • Have made all of your payments on time during the agreement.
  • Have strong savings and an excellent employment history.

The reason must be substantial enough to justify the agreement – such as a major illness.

You must also prove that after the agreement you have made all of your rent payments on time, have saved some money on your own and haven’t had any more credit issues.



What if I don’t meet the above criteria?

We can still apply with a specialist lender and help you to borrow up to 95% of the property value, however, the maximum loan size is $650,000.

While these lenders are more flexible when they assess your application, they will charge a higher interest rate to compensate for the higher risk on your home loan.

What if my credit file no longer shows my Part IX?

With some of our lenders, you can now apply for a standard mortgage at standard interest rates, but some lenders will still only lend you 80%!

Please fill in our free assessment form or give us a call on 1300 889 743 and one of our mortgage brokers will let you know your options.



Can I refinance my loan if I’m still in Part 9 debt agreement?

If you’re currently in a Part IX or Part 9 Debt Agreement then we might be able to help you refinance your current mortgage to pay out your agreement.

You can borrow up to 80% LVR (of the value of the property) if you’ve been in the agreement for at least 12 months and have made perfect repayments for the last six months.

You can obtain a home loan with a specialist lender, typically at 2% to 4% above the Bank Standard Variable rate.


Debt Agreement FAQs

What if I’m in a Part 10 insolvency agreement?

If you’ve entered into a Part X or Part 10 Personal Insolvency Agreement then the same lending criteria will apply as if you had been in a Part 9 Debt Agreement.

Please refer to the lending guidelines listed above.

Is there an advantage to Part 9 agreement?

Compared to being bankrupt, the Part 9 debt agreement is far more flexible and allows the borrower to have a number of options including:

  • Negotiating a system of periodic payments out of your salary which is set at a level that you can afford.
  • Having a moratorium arranged which is a temporary suspension of paying your debt.
  • A transfer of some of your property from you to your creditor in full or part payment of your debt.
  • Having an agreement with your creditor to pay less than the full amount of the debt that you owe.

What are the consequences of a debt agreement?

  • Although you’re not bankrupt, proposing a debt agreement is “an act of bankruptcy.” Your creditor could use it to make you bankrupt if the agreement is not accepted.
  • You will be listed on the National Personal Insolvency Index (NPII) for at least 5 years from the date the agreement was made.
  • It will appear on your credit report.
  • You cannot borrow or get goods and services on credit without declaring you’re in a debt agreement.
  • Administrators charge fees between $200 to $2,000 when entering an agreement.
  • The debt agreement is automatically terminated if you have arrears that have not been repaid within 6 months.
  • If you’re entering a debt agreement for secured debts like a mortgage, car, etc. then the creditor has the right to repossess your property and car.

Does debt agreement affect my credit score?

Yes, missing your repayments will lower your credit score. You can apply for a debt agreement if you’re unable to pay what you owe.

It’s best to wait before applying for a home loan after you’ve paid off your debt as making too many applications can also lower your credit score.

Too many inquiries on your credit report can limit your borrowing ability in the future due to a lower credit score.

Who can enter a debt agreement?

The eligibility criteria to enter a debt agreement are as follows:

  • You’re not able to pay your debts when they are due.
  • You have not entered into a debt agreement or declared bankruptcy in the last 10 years.
  • The total unsecured debt is less than $119,119.00.
  • Your after-tax income is less than $89,339.25.
  • The value of your property is less than $238,238.00.

Read more information on whether you qualify for a debt agreement.


Am I eligible for a Part 9 debt agreement home loan?

Our mortgage brokers know the right lenders who will consider a debt agreement when you apply for a mortgage.

Please fill in our free assessment form or give us a call on 1300 889 743 and one of our mortgage brokers will answer all of your queries.

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