What is an (informal) Debt Arrangement?
A Debt Arrangement is an informal, non-legal, non-regulated arrangement between you and your creditors, or with the assistance of a third party company, like MyDebt Solutions, to set up a manageable repayment plan for your debts. It helps reduce financial stress by creating a structured way to pay off what you owe.
What is a Debt Agreement?
A Debt Agreement is a formal, legally binding agreement under a Part IX of the Bankruptcy Act 1966. It is a regulated insolvency solution that provides an alternative to bankruptcy.
What types of Debt Arrangements or Debt Agreements can MyDebt Solutions help me with?
We can help with:
✅ Part 9 Debt Agreements: A Part IX (9) is a legally binding arrangement, under Part IX of the Bankruptcy Act 1966, that allows individuals struggling with debt to propose a repayment plan to their creditors, potentially avoiding bankruptcy.
✅ Hardship Arrangements: For personal loans, credit cards, car loans, or home loans where you’re struggling to make repayments.
✅ Collections Arrangements: For those that have had their debts sold to a collection agency, need a structured plan to catch up, and/or want to negotiate on any collections terms like any interest applied, repayment frequency or term, or any other part of the proposed collections agreement.
✅ Standard Agreements: For managing utility bills, rent payments, council rates, tolls, tax debts, legal fees, or fines, or any sort of debt you have incurred.
✅ Arrears Arrangements: For those that can afford to make repayments, but need a structured plan to catch up on arrears.
What happens once I enter a Debt Arrangement?
- you’ll need to make repayments on time.
- we’ll manage communication with your creditors on your behalf.
- if your circumstances change, contact us immediately so we can adjust your plan.
What are the consequences of entering a Debt Arrangement?
- Credit file impact: some arrangements may appear on your credit file.
- Closed credit facilities: credit cards or lines of credit may be permanently closed.
- Extended loan terms: if your loan term is extended, you may pay more interest over time.
What if I’m struggling to keep up with my arrangement?
If you’re having difficulty maintaining your arrangement, contact us as soon as possible. We’ll review your budget and explore new options to help you stay on track.
What happens if I break my Debt Agreement?
Once you are enrolled in a Debt Agreement, you are required to adhere to the agreed payment schedule. MyDebt Solutions will incorporate these payments into your budget to ensure they are manageable. However, if your circumstances change and you are unable to maintain the agreed payments, your Debt Agreement Administrator can assist you in either varying or terminating the agreement.
In such cases, a new proposal for variation or termination must be submitted to your creditors for approval. If your creditors do not accept the revised proposal, you will remain bound by the original terms of the agreement.
A Debt Agreement will automatically terminate if you fail to make payments for six consecutive months or do not complete all payments within six months of the agreement’s end date. Upon termination, your creditors may initiate recovery actions for the outstanding debts and may seek to have you declared bankrupt.
How long will a Debt Agreement stay on my Credit File?
Debt Type | Duration |
Defaults | 5 years from the date of collection |
Serious Credit Infringements | 7 years from the date of collection |
Current Loans | 2 years after the loan ends |
Part 9 Debt Agreements | 5 years from the agreement start date, or longer if voided or terminated |
Bankruptcy | 5 years from the bankruptcy date, or 2 years after it ends, whichever is longer |
Can MyDebt Solutions stop creditor calls?
Once you enter a Debt Arrangement, you may see a reduction of creditors calls, which will help you relieve stress and gain peace of mind.
Can MyDebt Solutions remove debts from my credit file?
No, we cannot remove debts from your credit file. However, we can assist in managing your debt repayments, which may result in improvements to your credit score over time.
Can MyDebt Solutions negotiate on all my debts?
A Part 9 Debt Agreement generally covers unsecured debts such as:
- credit card debt
- personal loans
- store cards
- old utility bills
- old medical bills
- payday loans
- overdrawn bank accounts
Secured debts like mortgages and car loans are not included and must be managed separately.
