What are Debt Agreements?
A debt agreement is a binding agreement between you and your creditors and fall under Part IX of the Bankruptcy Act 1966.
Under a Part IX debt agreement your creditors agree to accept an amount of money that you can afford to pay, over a set period of time to settle your debts. Once you have paid this money, your creditors cannot recover the rest of the money you owe.
The proposal will be sent to the each of your creditors and they can vote to accept or reject your proposal. If the majority of creditors accept your proposal, then the debt agreement will start and all creditors will have to accept the terms of the agreement.
All creditors will receive the same proportion of the amount you owe. For example, if you propose to repay 90% of all your outstanding debts over a five-year period, then all creditors will get 90% of what you owe them.