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Struggling Aussies increasingly turning to debt agreements

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Australian Broker | 18 Jan 2013, 08:15 AM Agree 0
More and more indebted Australians are turning to debt agreements as an alternative to filing for bankruptcy - but consumer credit rating experts warn it's not an easy way out
  • Edgar | 18 Jan 2013, 09:57 AM Agree 0
    It's any wonder so many people get bad advice to go into these sort of agreements when even the Attorney General gives the impression that debt agreements won't affect your credit rating like a traditional bankruptcy. And they are promoted so much lately, I see at least two or more adverts each night on TV ..."Have you got more than $8,000 debt we can help.....". I had one client recently who'd gone into a debt agreement where she paid out the debt over five years, she was discharged from it two years later than if she had gone bankrupt and paid nothing back. Effectively by paying the debt instead of wiping it off she ended up worse as it was an additional two years before main stream lenders would even consider her
  • Richard | 18 Jan 2013, 10:45 AM Agree 0
    I own a micro lending business as well as a home loan broking business. I always wish clients would talk to me before entering into a debt agreement. I would advise them to go bankrupt before a debt agreement. However the best strategy is to enter into an arrangement with creditors, not a debt agreement for the reasons Graham Doessel outlines in the article. I will always stop charging interest and will accept as little as $10pw. Most creditors will enter into an arrangement so long as the person does what they say. They would be far better to see an accountant to work out a budget and repayment strategy and for the accountant to contact and make an arrangement with creditors. From the creditor's perspective, a small regular payment is better than bankruptcy and receiving nothing. The important thing for the client is to act before it is too late and too hard.
  • JacK | 18 Jan 2013, 11:28 AM Agree 0
    Whilst there is a legitimate place for debt arrangements in any civilized society, encouraging consumers to enter into Debt Agreements or Bankruptcy (as is evident in Australia) disclours the moral & ethical obligations of people to fulfill what was promised by them i.e. 'repay what you owe'. What kind of society are we promoting by encouraging people to 'go bankrupt'? A sick one, I might suggest. The moral bankruptcy rests with those companies promoting this malpractice. Are you listening Fox Symes !!!
  • Positive Broker | 18 Jan 2013, 01:56 PM Agree 0
    Couldn't agree more with Graham Doessel. Debt agreements may be fine for some people but if you look at the websites of some of the companies offering this service they very rarely make it clear it is a bankruptcy event. Misleading to say the least.
  • John | 18 Jan 2013, 02:13 PM Agree 0
    The whole issue of Debt Agreements (part X and IX's) and the way it marketed by many promoters is paramount to fraudulent and dishonesty against their clients. I see many such arrangements when these clients should never have been sold this type of solution. However, the lawmakers of this country have framed the Acts so they are the Rules we have to play with. My business is now utilising the current law to assist clients to minimise the impact of what is still draconian legislation which buggers the financial lives of those effected for up to seven years. The whole legislation needs to be amended as the current legislation does not provide any incentive for a financially stressed person to do the right thing and I do not blame them.

    Even the way that the Credit infringements are handled on Credit Bureau Files give absolutely NO incentive for a borrower to do the right thing once they have been listed as there is no reward provided if they do.... An animal will always do what you want it to do if you reward it. Humans are no different.......

    Jack's righteous comments on morality above is in my view typical of a person who has never found themselves in compromised financial position and would have NO idea the stress and strain it places on the affected person, their families, their lives and the rest damage it does to reputations etc.

    Companies such as FS & others exploit the law to make a business out of it, and that's business.

    Change the legislation which gives hope and encouragement to do the right thing, rather than hang onto the typical Australian Convict Mentality of while the dog is down keep kicking it, for which we Australians are so unfortunately famous for.... It is also Nanny statism which this current government cherishes to control their constituents.

    The whole issue of the Privacy Act, Bankruptcy Act and how Debt Stress is handled needs to be revisited and completely restructured..... However I am unlikely to see this in my life time so I will continue to assist my clients to minimise their damage even if it is not morally correct!! Want to change the legislation to make it positive instead of the negative it currently is, I am first in line to promote it!
  • Kev | 21 Jan 2013, 10:08 AM Agree 0
    Do you guys understand that when someone owes $80,000.00 on their credit cards and that their statements tell them that by paying the minimum payment it will take 109 years to finish the debt that no borrowing for 7 years is pretty attractive.

    Its easy to give advice when you don't have to lug the millstone around on your neck.

    Brokers seem to always whinge that people's credit ratings are going to be affected. Maybe its just the best thing for a person so that they can get their life back on track.

    You guys just want them to have a clear rating so you can flog them more money. It looks like you are the instigators of all these problems.
  • Anton | 29 Jan 2013, 12:41 PM Agree 0
    I entered into an agreement by mistake and am now paying for it hard. I'm 30 years old, I have no future, I can't apply for credit anywhere, My fiance left me because of this stress.
    i have no assets to borrow against to wipe this stupid debt from my credit rating. I have worked in my job for the last 3 years. If anyone can offer me advice on how i can repair credit, perhaps put a complaint into the creditor who signed me up when i was struggling financially years ago, please email me.
  • Lynne Gray | 11 Jun 2013, 02:53 PM Agree 0
    We were badly advised that a part 1x would definitely not affect our future home loan application.
    We have never been in debt and we only owed $25000.
    Now we have been refused further borrowings, by Anz,who we have had a mortgage with for 15 years, because of the part 1 x
  • John C | 12 Jun 2013, 01:27 PM Agree 0
    Change the legislation. Even the new "revised" legislation due to come into play next year is draconian and a severe impost on borrowers civil rights. The way in which Credit Reporting is managed in this country is frightening. There is nothing positive in any of it. John's comments above are absolutely spot on. Given where we are heading no one will be able borrow money for their needs. We voted this idiotic government in so we are now paying the price for this situation occuring.
  • Deb | 01 Aug 2013, 09:16 PM Agree 0
    Hi l am another person taken in by thinking a debt agreement was the right way to go. I thought at least im attempting to pay my debts, little to know that l am now struggling week by week to pay the normal everyday living expenses eg rent, electricity food petrol etc luxuries like a night out or once in awhile go to the pictures is completely off the budget. I even inquired if l could change from debt agreement to bankruptcy apparently that is a big NO NO so here l go having to pay back for 5 yrs and with the over $7,000 fees put on top of my debts i still have 2 and half years to go of living nearly as bad off as l was before l entered into this debt agreement. Please people think very hard l only wish l went bankrupt the reason behind my debt problem was my husband had a heart attack and could no longer work thus loosing his wage. Just a question am l being told the truth that l cannot change to bankruptcy apparently because l own a car valued at $10,000 which was brought before debt agreement and has since been paid off as it was not included in debt agreement
  • Andrew | 08 Aug 2013, 05:39 PM Agree 0
    Is there anyway to have a Part X agreement removed from the National Personal Insolvency Index?
  • John C | 10 Aug 2013, 09:29 PM Agree 0
    Deb and Andrew, let me answer your question 1st Deb, I bet the people who told you it would be a big NO NO to submit a Debtor's Petition were the people who are administering your Part XI/X facility! Of course they would tell you it's a big NO NO because if you did, they would suddenly lose their humongous fees they are gouging out of your estate which should be going to your creditors. If you feel that you need to submit a Debtors Petition then by all means do so. Go and get some independent advice for heavens sake. The Debt Agreement listing stays on your credit file for seven years anyway so you might as well end it and clean the slate out, and start fresh in three years time as there is no benefit in trying to do the right thing when there is no encouragement to do so. You can always go back to your Bankruptcy Trustee when you are on top of things and make an offer to settle the estate and get your Bankruptcy annulled, which under the Act means it is a legal fiction and if asked the question have you ever been bankrupt your answer can with hand on your heart a resounding NO! Think of yourself first and use the law to your advantage. The way the current legislation is drafted why bother in trying to do the right thing when all that will happen is that these self righteous people suggesting this cause of action will just step on you like a dog again.

    Andrew, the short answer to your question is NO. Once the NPII has your details on file it is there for the rest of your life!! However your question poses an interesting scenario which I will investigate and if there is a solution I will get back to you here.
  • Nick | 09 Sep 2013, 11:34 PM Agree 0
    I entered into a Part IX Debt Agreement back in March this year due to about $50K in credit card and store card debt. The agreement is over five years and I understand that it will affect my ability to go for a loan on credit for the next seven years. But can anyone please tell me if it will affect my ability to apply for a rental property if i was to move out of home within the five years or even after the next seven years? Also after the next seven years is finished, how will this affect my ability to obtain credit? I'm asking because I was told by the debt company i did this through that my ability to obtain credit after the seven years is up should be ok. Plus i've got a gut feeling that i should have taken a different road.... Any wisdom, advice or harsh words to bring me to reality on this would be greatly appreciated.
  • John C | 10 Sep 2013, 08:01 PM Agree 0
    Nick, you are not prevented from entering into a residential lease if you are under a Part IX or Part X. Both these types of Debt agreements are simply a Management arrangement and not a Sequestration of Bankruptcy where your estate comes under the control of a Bankruptcy Trustee. So if you want to move out of home and go get your own pad go for it!
    Under the current draconian Privacy Laws any act of Bankruptcy (which Part IX & X's fall under) will remain on any file held on your name by the various Credit Reference Associations (Veda Advantage and Dun & Bradstreet being the major ones) for a maximum period of seven years. After this period of time the act states that this information must be removed from your file. However the NPII (National Personal Insolvency Index) will keep a record of this forever. Most lenders will (in particular if they use the services of a Mortgage Insurer) will use this listing to either refuse your finance application or penalise you financially for your history even if the reasons for your predicament were caused by Force Majeure. Once the seven years is up, these listing will drop off and your credit history file will be clear.

    Yes your GUT feeling is right. What a shame you didn't know me before you got yourself into trouble. Using the legislation at your disposal we could have resolved your financial issues, keep you credit rating clean and clear (or had it cleaned up within a very short period of time - certainly substantially sooner than 7 years). The number of people I come across who have entered into Debt Agreements who in my opinion either did not need too or should have taken a different path due to bad advice or misguided opinions from well meaning friends is simply astounding.

    Trust this clarifies your position for you.
  • Samantha | 25 Sep 2013, 05:36 PM Agree 0
    If I enter a part 9a debt agreement does this prevent me from becoming an property owner in the future? I am getting told so many things I need to confirm it is correct. I only have a credit card to pay off and my circumstances have changed. Im worried that I am being declared bankrupt?
  • John C | 26 Sep 2013, 11:44 PM Agree 0

    No you are not bankrupt by entering a Part IX. A Part IX is a debt agreement administered by a registered manager. However as it falls under the Bankruptcy Act, think very carefully about entering into such an agreement as this will be listed on the NPII forever and on your Credit Files held by the likes of Veda and D&B for seven years thus making it difficult to obtain finance (or being penalised with a rate loading) during this period even after you have finalised the agreement. Please seek INDEPENDANT professional legal advice and NOT be persuaded by the sales process of the various Debt Agreement Management companies who would encourage you to take this route unless there are no other options. If it is only the one credit card debt (depending upon the amount of this debt) it should be possible to reach a suitable agreement with the provider, particulurly with the assistance of your lawyer. You are still able to legally engage credit whilst under a Part IX agreement, however most lenders will not advance a loan as the listing will be shown under an "Act of Bankruptcy" on your credit file. The answer to your question is; no it will not prevent from buying a property in the future, however this experience would surely dictate as to what legal structure you may want to put in place to protect your assets in the future. If your credit card debt is humungous and you can't jump over it then you may need to look at another strategy to resolve it, however in my world I would look at another option rather than a Part IX if at all possible.
  • Ricky | 01 Oct 2013, 12:23 PM Agree 0
    I have also been a victim of a profit making financial firm, suggesting that Debt Agreement is the best place to land for a total sum of $30,000, which I might have settled myself (if I would have been smart enough at that time). I have been so unfortunate not to talk to a broker or a proper financial expert before I talked to the company who gave me false impression that I will be perfectly fine after I pay off my debts.
    They post these very nice and pretty advertisement online which appeal people like me to "get rid" of financial difficulty, and not telling on phone when contacted about the consequences of it.
    My question is, can I please be advised what to do if I want to make it right. Apparantly I am unable to buy a property, already spent two years of Part IX so for next five years, still not eligible to buy or borrow.
    What options do I have to make it right? Just sit quite and wait for another five years?
  • John C | 02 Oct 2013, 12:23 AM Agree 0
    Ricky, in answer to your question I believe this has been addressed in the post back to Samantha. If you have already entered into a Part IX arrangement, your options to "fix" this are limited. This forum is not designed to provide advice, as everybody's circumstances will be different and as such you should contact your legal professional for advice (even though many of these so called professionals unfortunately have not got a clue) as to your options. As stated previously a Part IX does not prevent you from legally engaging credit such as purchasing property, however the negative listing on your credit file will make it challenging to find a financier to assist you whilst the listing remains published on your credit file, and most certainly if the Part IX has not been satisfed/completed. As a suggestion, if you are not successful in obtaining the information and advices that you require, please come back to this forum and let us know (or even if you are) and I maybe able to point you in a direction where you can get some assistance. I am also aware of a group of very concerned business people who are most worried at the impact of the draconian credit reporting laws in this country where there are now increasing incidents of people inflicting self-harm to themselves because they have nowhere to turn for assistance, support or advice. This group I am aware are in the process of setting up an "Non Profit" Support Association which is to be named something along the lines of "Don't Die for your Debts" or similar. Should this association eventuate I will publish it here. In the meantime I trust the information above assists you.
  • Ricky | 29 Oct 2013, 02:46 PM Agree 0
    John. Thank you for the advise you gave me regarding Part IX. I am unable, as you stated, to find a suitable solution. Can you direct me if there is any solution for part IX to be revoked somehow. If I chose to pay off my creditors by directly engaging with them, is it possible that debtagreement is revoked from my file earlier than it has to finish in next five year? Thank you
  • tony b | 30 Oct 2013, 12:02 PM Agree 0
    forget all this debt agrement stuff, if you do not own property, shares or any other hard assetts and your veda file is blistered by one or more defaults, then just lodge a debtors petition declaring yourself bankrupt! The current manner in which Veda and others addopt and apply their version of the Privacy Act (Comm) 1988 does not generate the slighest incentive for anyone to pay their debts! i say, Veda,s interpretation as it is their incorrect interpretation of Section 18F of the privacy Act (Comm) 1988 that causes harm and loss to creditors the parties they profess to act for and support and who are in fact their members but in reality their behaviour supports their business only. Paing your debts once the debt or debts have been listed on your Veda file, is useless and and of no benefit to you. Veda will thought tell you that you have a moral obligation
    to pay your debts! What to bloody Banks! where are the Banks morals?
  • John C | 30 Oct 2013, 01:19 PM Agree 0
    Ricky, Yes Tony b's comments strike a chord for sure. The legislation that controls this area of the Privacy Act, Bankruptcy Act, Credit Act all needs to be reviewed, overhauled and changed and brought into line for todays environment. Some of this legislation is 50 years old and not relevant in today's business environment.

    In answer to your question once you have entered into a debt agreement you can't revoke/undo it. If you read between the lines of Tony b's comments there are some possible solutions that can be considered, if you feel that the current arrangements you have in place are not suitable. I will see if I can find an address I can refer you to where you can seek the assistance of an advocate.
  • Kylie | 13 Nov 2013, 03:40 PM Agree 0
    I would love some advice as now I am really confused with what decision to make. I have 36K in debt and have struggled with it for years. I am confused with whether to take out a debt agreement or bankruptcy after reading all these comments. I am currently not working so feel I have no other option. I am extremely stressed and would appreciate any advice. Thanks.
  • Ricky | 14 Nov 2013, 11:10 AM Agree 0
    Kylie. I was in the same situation and I took out debt agreement, consider now as one of the biggest mistake I have ever made. Circumstances change, so don't sacrifice your present for future which might be bright.
    If I were you, I would talk to creditors for hardship payment plans or options. But if you want to get rid of it, and you don't own a house, shares or big assets, and you don't plan to run a business as a director, consider bankrupcy over debt agreement. Think about debt agreement many times before signing it.
  • Kylie | 14 Nov 2013, 01:16 PM Agree 0
    Thanks Ricky for your reply. Can you explain to me why it was the biggest mistake of your life? They are changing the legislation for debt agreement to be on your file for 5 not 7 years, so that is one differentiation. I understand it still will still show under the Act of Bankruptcy but doesn't it look better if you commit to pay it off rather than go bankrupt? I don't have any assets, but my greatest concern is the travel restrictions of bankruptcy, i don't want that to be hanging over my head in the event I do want to move overseas at some point. I'm definitely thinking that debt agreement is more favourable? So your explanation would be valuable to me. Thanks
  • Ricky | 14 Nov 2013, 03:15 PM Agree 0
    Kylie. You gave me one good news that they are changing the legislation of debt agreement from 7 to 5 years. That s good. I don't see any point now not to get any loan or credit despite committing to paying to my previous creditors. I see debt agreement same as bankrupcy in terms of negative impacts it has over you in your credit file. I want to buy a property now, but cannot because it hangs in my file for next 3 years. Whereas my friend who declared himself bankrupt was able to buy property ater 2 years of his declaration. You can travel as well with permission of your trustee, and generally they let you to. But everyone's circumstances are different. One advice though; try not to be trapped into debt settlement agencies. They charged me$6,000 fees to settle agreement of $12,000. I could have saved that fees amount if I would have gone myself or AFSA. Try to save this money by having AFSA as your trustee.
  • Jane | 11 Dec 2013, 09:58 AM Agree 0
    John, who and where are you?
  • Paul | 18 Dec 2013, 03:38 PM Agree 0
    Entering into the Part IX was by far the biggest mistake I made.

    I was shattered when I later found out the even applying for a Part IX was recorded on my credit file. Had I known this, I would have NEVER even put in an application, I would have stayed working 3 jobs to make ends meet for a couple of years than do this. I'd strongly encourage people to be well informed about what a Part IX or Debt Agreement is before signing it.

    However, I believe in my favour I do have a mortgage to which I have been honourable with, however I am led to believe now, that this will not matter in the future anyway because of the NPII - is this correct?

    I am full of regrets these days, 29 and credit scarred!

  • John C | 26 Dec 2013, 01:55 AM Agree 0

    I am a former Finance/Mortgage Broker and Mortgage Originator and have taken the decision to exit the industry after some 25 years of giving my life to it. The reasons for exiting were numerous, in particular the draconian legislation brought in by the former Federal Government which has been in my opinion in the main a massive retrograde step. I don't have an issue with continuing education etc, this is essential, however the new and additional regulatory imposts placed on small businesses operating in this sector in my view no longer make is a profitable business to remain. It also gives the power back to the "big end of town" such as the banks and takes away the competitive edge of the small boutique lenders which in turn disadvantages the customers/clients.

    Having been in the industry for so long I have seen a tremendous amount of change (or lack of changes as times change) and I have taken this on to assist people who may have been caught in the trap to resolve their issues and get a clean start.

    Most borrowers do not know their rights and enter into arrangements and find out too late there was another way of doing things. The issues of debt agreements and other resolutions that maybe available is a pet subject of mine. Now I DO NOT advocate that people should shirk their financial responsibilities and it should always be your intent to honour your agreements/arrangements where you can. However circumstances can change and with that it maybe become an impossibility to continue with your intentions. Unfortunately "CRAP" happens and in most cases it will be the result of circumstances outside your control. Many people will have the resources to deal with these changes and good on them for doing so. However there are many people who do not have access to these resources or do not have the monies needed to access these resources. My interest , which is why I contribute to this forum, is to see the latter be able to get some suggestions for alternative directions. I have a particular issue with Section 18f of the Privacy Act and the Bankruptcy Act as these current sets of legislation are way out of date and negative in their structure. I have a distinct dislike of Debt Agreements (Part iv & x's ) and I believe until legislation is changed there are better options to consider which will not ruin your credit history for seven years (on the odd occassion these maybe the only option).

    We are in the process of establishing a Not for Profit Association to be named "Don't Die for your Debts". This also covers assisting people to deal with stress & worry of debt levels that they do not believe they can jump over. I am happy to provide recommendations for you to take to your legal advisor's as anything in this area needs to be done in conjunction with independent legal advice. If you would like a referral to an advocate please drop a line to debtrelief at fcxcorporate dot com and see if we are able to point you in the right direction.

    Regards, John C

  • Sharon | 01 Jan 2014, 10:05 AM Agree 0
    I entered into a debt agreement (6 years ago) and it was the best thing I ever did. I was over my head in debt and struggling what to do. Every time the phone rang or there was a knock on my door I freaked. Yes, I know it's on my credit file but it was something that help me out.
  • John C | 06 Jan 2014, 09:44 PM Agree 0
    Hi Sharon, Debt Agreements do have their places I agree, as long as you are aware of the consequences then that is fine. The major issue I can see from the majority of people who have posted on this blog is the lack of information provided by the organisation that advocated a Debt Agreement as a solution which became a short term fix and a long term disaster for them. There are other ways of resolving these issues using the law to your advantage. However in your case if the Debt Agreement resolved your issues and did not (and continues not too) affect your financial position then that's fabulous news. You will be one of the rare species that have this view.

    Jane, I forgot to mention in my previous post that I am located in the Sydney region.

    Cheers, John C
  • Jade | 17 Jan 2014, 02:13 AM Agree 0
    Hi John C
    I'm wondering whether you are able to help me sort out/find a solution to pay my debts off? I'm having trouble sleeping at night.
    I live in Adelaide, would you happen to know anyone in SA that might be able to help me sort out my situation?
  • John C | 17 Jan 2014, 06:12 PM Agree 0
    Hi Jade,

    My contact details are at the bottom of my previous post. Drop me a line and I will refer you to an Advocate who can discuss your position and suggest some options for you to consider.
  • Sophie Madam | 02 Feb 2014, 03:47 PM Agree 0
    Id like to know if you enter into a debt agreement 9 or bankruptcy and your name is recorded on NPII permanently - Say you got married whilst in midst of your debt agreement & name is on NPII, do your debt records transfer automatically to your new marriage name? Or when you get married, is it a whole new credit file? And will your old credit file prevent you and your married partner from obtaining credit anywhere because of the file on your maiden name? #curious
  • John C | 05 Feb 2014, 10:40 AM Agree 0
    Sophie, yes your name is recorded on the NPII for eternity unfortunately. You pose an interesting question and I am not sure of the answer. Legally even though you have changed name by Deed (marriage for example) you are still the same person. However unless you advise your Debt Manager or Trustee of the name change they will be none the wiser and if the records are not updated then your former name will remain listed.

    With your credit file, the various Credit Reporting Agencies will pick up your old file when you make any new credit enquiries under your new name, as most States when changing your Drivers license details such as change of name you will still retain your original Drivers License number. Most of the Credit Reporting agencies will have a process in place where they get a match on one common piece of information on a fresh new file such as a Drivers License Number, will employ additional algorithims of at least three pieces of informtion to confirm the change of name such as Given Names, Date of Birth, Address history, Employer etc to validate that you are one and the same person. Should this algorithim get three matches then the Credit Agency will when creating the new credit file for your new name will lodge a notice that there is another person on file with details that match and show this file on your new credit file as an Alias. This will then allow the credit provider checking your file to review the other file to determine if this other file belongs to you. The old file will be also updated with the details of your new file under your new name. A double whammy!!

    You need to be aware that many finance applictions ask if you have been known by any other name and have you ever had credit issues in the past. Failure to answer these questions accurately and it is found that you have misled the financier with your answer/s is a serious offence.

    I trust this answers your question although I do need to check the position about the change in name where you are in an existing Debt Agreement or Bankruptcy administration.
  • Paula | 22 Feb 2014, 12:54 AM Agree 0
    Help & advice needed!
    I entered into a debt agreement in 2009 same as others was unaware of the part ix, I paid off this debt in 2011 and I have sinced saved 50k for a deposit for a home. Which is 10% at moment. I have been to a broken & basically said I will need minimum of 20% deposit before any if the major lenders will look at me. However my part ix is still on my Veda file until 2016. My questions are: so say by the end of 2014 I have 20% deposit. Will the major lenders look at me favourably or and I still going to have to go to a specialist lender with the high interest rates? And also was reading earlier posts about the change from7 years to 5 years on your file for part ix, when will that happen and will they apply that to people who already have it on their Veda file?
  • Paula | 22 Feb 2014, 09:57 AM Agree 0
    I went into a debt agreement in 2009 paid it off by 2011. Since then have saved 50k deposit but been told that ill need 20% before any major lender will consider me. Say end of this year I have 20% deposit, the part 9 is still on my Veda file until 2016. So will I still only be able to go through the specialist lenders at the high interest rates or will major lenders consider me at lower interest rates? Also when are they going to reduce it from 7 years to 5 years on your credit file? And will that apply to people who already have it on their credit report?
  • John C | 25 Feb 2014, 01:24 AM Agree 0
    Paula, I am unable to comment about the reduction of the publishing time frame with implementation of the revised Privacy Act. This due to come in on or about 14th March 2014 and I am not sure if the five period relates to fresh infringements or whether existing infringements are retrospectively amended. I will clarify this and post this on the blog in the next day or so.

    In relation to being approved for a loan with an 80% debt to valuation ratio with a finalised Part ix still showing on your credit file will be up to the credit criteria of the individual lender. If any of the lenders use LMI (Lenders Mortgage Insurance) then there is a good chance that you will be refused. However if you are able to increase your deposit % to 25-30% where the lender does not have to engage LMI then your chances of securing a loan facility with a lender without the need for LMI will be more likely. Given the that the competition has started to hot up in recent months there is a more than reasonable chance that you will get facility that you require. It will be very important to show your savings history and other regular payments you make such as Rent etc to demonstrate that you have no issues in meeting your commitments. Your local Mortgage Broker should be able to assist you. If you don't have one go to and select a broker member in your area that you can contact and have a chat!

    My concern is that the existing credit infringement may still be an impediment!
    John C
  • Arron | 25 Feb 2014, 08:05 PM Agree 0
    Very happy to find this conversation and that there is an effort to change the unethical practice of some companies and the immoral BS that exists here in Australia.
  • Rachael | 27 Feb 2014, 08:17 AM Agree 0
    Hi, just thought I would help out as I have been doing extensive research on the changes. The changes will be retrospective. This is confirmed by the information on the government oaic site.
  • John C | 27 Feb 2014, 10:04 AM Agree 0
    Rachael, Thank you for clarification. Even so these amendments are are way out of whack and the new legislation still draconian in its current form. The whole business of the Privacy Act (in particular Section 18f), Bankruptcy Act etc has to be completely revisited and changed.

  • jo | 27 Feb 2014, 10:41 AM Agree 0
    Hi All,
    I used to work in finance and am still in the industry and have a couple of pieces of advice.
    Always approach your lender/lenders first if you keep your arrangements then in general they will assist.
    Approach your superannuation company - if you have outstanding lialbities they can in certain circumstances release some of your super to asssist in the payments.
    Bankruptcy and part nine can also impact future employment - particularly in the industry.
    There are some very good financial counsellors from Salvos etc that can help with budgets and communication with companies you owe money to. Some of these companies can also assist you with making the final decision regarding bankruptcy and can assist you without the high costs, i think one is Moneycare.
    There is certainly some situations where bankruptcy/part nine is the best option but seek good advice first.

  • Broker | 27 Feb 2014, 12:43 PM Agree 0
    So does the new positive credit reporting info and changes to the privacy act mean that defaults will never disappear from a credit file, or will their credit file be clean again after 5 years from the default listing?

    Hoping someone can answer this
  • Paula | 27 Feb 2014, 10:11 PM Agree 0
    Thank you all for you help and advice.
  • Paula | 27 Feb 2014, 10:17 PM Agree 0
    I checked out oaic and found this info
    "When will personal information that was included on an individual’s credit report before 12 March 2014 be removed?
    The new credit reporting laws (the new laws), which commence on 12 March 2014, regulate what personal information can be included on an individual’s credit report, and how that information can be handled. This includes how long that information can be retained on an individual’s credit report.

    From 12 March 2014, any personal information permitted to be included on an individual’s credit report must be handled in accordance with the new laws. This includes personal information that was in a credit report before that date. This means that the new laws will determine how long that information can be held on an individual’s credit report.

    How long information is permitted to be kept on an individual’s credit report varies depending on the type of information. Under the new laws, some of the retention periods have been shortened, while others are unchanged. Importantly, once the relevant retention period ends, the personal information must be removed from the individual’s credit report within 1 month.

    Where the retention period has been shortened, the new shorter retention period applies. Importantly, the new retention period will apply from the date that information was first included on the credit report, and not from the 12 March 2014. This means, for example, that any information included on an individual’s credit report prior to 12 March 2014, for which the new retention period has expired, must be removed by 12 April 2014, even if the old retention period may not have expired.

    As well, personal information that does not meet the criteria in the new laws for inclusion on an individual’s credit report or is not covered by the transitional provision in paragraph 5.1 of the new credit reporting privacy code cannot remain on an individual’s credit report after 12 March 2014. An example of this would be defaults of less than $150."
    Thanks again for all your help
  • John C | 27 Feb 2014, 11:57 PM Agree 0
    Broker, My understanding is that the 5 year period still stands. However the interpretation of 18f of the Privacy Act is not in accordance with what the original framer's of the act would have envisaged. That's my issue with how the various CRA's manipulate the information just so they can benefit themselves to the detriment of the people who are affected by this information.
  • Broker | 28 Feb 2014, 10:30 AM Agree 0
    Thanks John & Paula , your comments are greatly appreciated
  • Maree | 06 Mar 2014, 05:15 PM Agree 0
    Wow I feel like such an idiot, I did NOT properly research this, and all of the 3 debt agreement providers I spoke with said my credit rating would be fine again after the 7 year period, and once the debt was paid even if before the 7 year period I should still be able to get a mortgage! Not one of them mentioned that the insolvency record would remain forever and potentially impact on my capacity to get credit or a mortgage again. I feel stupid! Thank you John for your advice though - luckily I am still in the voting ('cooling off') period and have already contacted one of my creditors and they have been agreeable to a hardship arrangement which means an affordable amount to pay (comparable to the debt agreement) with suspended interest for that period. Once they knew that I was a potential bankruptee (er?) and willing to set up a direct arrangement to save my credit rating they became a lot more flexible! I have 3 weeks to get to my other creditors to agree to come to the party before I can cancel the debt agreement proposal, even though I now know that the proposal stays on my record forever too! This lesson will cost me $1,950 in professional fees for the business I chose to lodge my proposal. Hard lesson.
  • Dee | 10 Mar 2014, 06:59 PM Agree 0
    Hey John C (or anyone else),

    Can you make any recommendations on who to talk to in Brisbane? I'm about $25k in debt and can't pay any of it off each week but these horror stories are completely putting me off the debt agreement. I'm 30 and would love to start getting ahead in life!

  • John C | 11 Mar 2014, 09:26 AM Agree 0
    If you look further down in one of my other posts you will see an address that you can use to make contact so we can refer you to an Advocate in your area. Cheers, John
  • Zac | 09 Apr 2014, 05:32 AM Agree 0
    Can anyone suggest to me my options if any in obtaining a loan to buy a house once I have paid my part 9 debt agreement off! I was unaware of the full extent as to what the consequences would be entering into this agreement. I have since started a good paying job and am renting for what it might cost to buy a house. I have been and have paid off my debt much quicker than required n should have it wrapped up by mid next year. Is it worth pursuing a home loan after that or shall I concentrate on trying to see if my partner can borrow as she would have a stable credit rating?
  • Tony Brownlee | 09 Apr 2014, 08:03 AM Agree 0
    Forget it! While Veda and others continue to impose a penalty upon you by holding your default or 9 when paid or settled for the maximum permissible period of 5 years as against removing same when paid or settled, there is little or no hope the place will be a wasteland lacking in small business as so goes the jobs!
  • John C | 10 Apr 2014, 02:53 AM Agree 0
    Well ALL, a New political party has been established and one of their priority policies on their platform is to correct the injustices that the current Privacy Act 1988 (as amended March 2014) is causing and will continue to cause. Help them to help you. Go and register with them and better still, sign up and be a member to voice your concerns and get change happening. These people have a real issue with the way the various Credit Reference companies manipulate the information that is held, in particular after any alleged debts have been paid or settled. Show your support to get change. The listing of alleged debts / overdue payments after 7 days under the new revised APP in march this year is just ludicrous and plainly idiotic particularly when big business and GOVERNMENT take up to 90 days (and sometimes more) to pay their bills at the expense of the little person. Whats this world coming too, particularly in Australia. Just plain lunacy by the previous Government and if the current Government does nothing to reverse this, then they deserve to be a one term wonder!
  • John C | 10 Apr 2014, 03:16 AM Agree 0
    Zac, If you are applying for a high LVR loan where mortgage insurance is required you will definitely hit a snag. If your partner has the income capacity to support a proposed loan facility then that is certainly an option. However if your partner does not have the capacity without your income assistance, if you are able to keep your borrowings down to under 75% Loan to Value ratio (where a number of lenders dispense with Mortgage Insurance) you should be able to find a non-conforming lender who will assist you. You will no doubt be reamed with a weighted risk rate, however if this gets you into the property market, you can always refinance with a Tier One lender once your credit infringement has disappeared. Speak to your local mortgage broker and see whether they have any non-conforming Lenders on their panel. If you are having no joy let me know what area you are located in and we will refer you to an advocate who should be able to assist you. In the meantime have a look at as one of their platform policies is the addressing of how your credit file information is used and they are strongly advocating for amendment/clarification of Section 18f of the Privacy Act 1988 to remove the issue of the continued "punishment" of victims after they have paid or satisfied a debt through the CRA's own misinterpretation of this piece of legislation. Support them to help you. Let us know how you go with your local Mortgage Broker.
  • Dean | 19 Apr 2014, 08:26 AM Agree 0
    I too went into a Part IX agreement, which I have now paid off. I would like to know if the seven year period referred to throughout this blog applies from the moment the agreement is entered into or does the seven year period apply from the date the agreement is finalised?
  • Carolyn | 05 May 2014, 07:55 AM Agree 0
    I entered into a debt agreement which I pay off next year feb 2015.
    That would be 5 years since I started the agreement. How long do I have to wait until I can get a home loan?
  • Megan | 03 Jun 2014, 12:01 PM Agree 0
    Hi there,
    My bedbt agreement is about to be finalised in October. My partner currently has a mortgage in his name but we would like to sell and buy another property togther. Can you please tell me if will this would be possible given my credit history - his is perfect.
  • jason | 04 Jun 2014, 04:54 PM Agree 0
    where do we even begin, even fox symes won't help because i don't have a full time job. I know i can begin to repay the bad debt however with the interest the creditor charges it will be 20 years before its paid off. Surely somebody can help
  • SteveL | 05 Jun 2014, 09:53 AM Agree 0
    Hi Jason, I see your stress and anguish. email me at

    I've been in the industry for 20 odd years and have some great contacts that MAY be able to help.
  • Steven | 07 Jun 2014, 04:12 PM Agree 0

    I have finished paying my debt agreement in Oct 2013. This was paid out early by 6 months. I am starting a new job in 2 weeks as a sales rep. My income will be $95000 plus bonuses. However, I need a more reliable car. Can I apply for finance for a car?
    $15000 is all I would need and I can make payments on such a loan quite easily. Thank you in advance.
  • John C | 09 Jun 2014, 10:45 AM Agree 0

    The time period referred to commences from the date you enter into the arrangement.
  • John C | 09 Jun 2014, 11:13 AM Agree 0

    The difficulty will be that until your Debt Agreement is finalised that you will be prohibited from engaging credit. If your agreement is finalised in February 2015 then you will need to wait until after that date to apply for credit. The difficulty will be in finding a financier to assist you with a freshly completed Debt Agreement on your record. There are non-conforming lenders in the market place who may look at your circumstances and maybe prepared to assist you......... for a price!! If it requires mortgage insurance.... forget it until the Debt Agreement notation is removed from your credit file! Even when you have in your mind done the right thing you are still continued to be punished until the CRA remove the entry off your credit file. That's why I dislike Debt Agreements so much. They are a short term fix with long term seven year painful sting in it's tail. There are other alternatives available to resolve those issues and in the main the Debt Agreement promoters do not tell you about them as it is not in their financial interests to do so. The legislation needs to reviewed and changed in this area urgently.

    Check with your local mortgage broker as to what your options are and who might look at your position once the Debt Agreement is finalised so at least you know and start planning?

    John C
  • John C | 09 Jun 2014, 11:41 AM Agree 0

    The difficulty will be that until your Debt Agreement is finalised that you will be prohibited from engaging credit. The challenge will be in finding a financier to assist you with a freshly completed Debt Agreement on your record even when your partner has perfect credit. If your partner is able to service the proposed debt without your financial assistance (under the NCCPA) then that would be the way to go. If your income is required to assist with the servicing of the proposed debt, there are non-conforming lenders in the market place who may look at your circumstances and maybe prepared to assist you......... for a price!!

    I have responded to another post here earlier to Carolyn which summarises the position. Further down the posts there is another reply to a post made by Zac which seems to fit your circumstances. Please review this.


    John C
  • John C | 09 Jun 2014, 12:06 PM Agree 0

    Like SteveL, I feel you pain. Your post is not clear however it would appear to be just one creditor that is giving you grief. Depending upon the creditor, (e.g. Credit Card) most of these financiers will abide by the Government's "Financial Hardship" provisions as long as you approach them and APPLY for it. Under Hardship provisions, the financier will provide a moratorium on interest rates for an initial period up to four to six months (as per your negotiations) to give you an opportunity to knock the debt on the head. Depending upon the result of your position after the initial period, the financier may extend that moratorium period for a further term. They would rather see their principal returned rather than lose the lot through an act of bankruptcy. The fact you are not full time employed will increase their incentive to agree to a moratorium under the Hardship Provisions. The other benefit is that if you have not had a credit infringement placed on your credit file, that entering into such an agreement prevents such a listing occuring as once an Hardship agreement has been entered into, you have modified the agreement and as long as you keep to it no adverse listing can be placed on your credit file.

    However if you have several creditors you may need to look at alternative options available to you. However I would recommend you seek independent advice for your options.

    Alternatively if you search through my previous posts you will find an email address where you can contact me for an impartial chat! Whatever you do, do not entertain a Debt Agreement (Part IX or X's) unless you have obtained serious independent advice. This blog is full of the pitfalls of the short term gain and long term suffering from Debt Agreements.


    John C
  • Dean | 09 Jun 2014, 12:11 PM Agree 0
    Thanks, John. So, do the recent changes in government legislation mean that I can apply for credit once more? I finalised my part IX agreement as of mid 2012 after a five year payment plan. I am now two years clear of finalising my plan, so seven years since I first began my Part IX journey. All clear to apply for a credit card?
  • John C | 09 Jun 2014, 01:36 PM Agree 0

    The first thing to do is to check you have a clean credit file. Under the Credit Act all CRA's must provide you a copy of your file that they hold at no cost. This will take anything up to three weeks to arrive (supposed to only take 10 days) once you apply for it. Contact both Veda Advantage and Dunn & Bradstreet (the two major CRA's in Australia) and request a copy of your credit file. They will try and sell you a Credit File Subscription for $60.00 or so P.A. to get your report immediately so this is a commercial decision for you. I do advocate the subscription service if you can afford it only because should an enquiry be made on your file you know about within 24 hours and if not made by you, you can investigate it.

    Once you have the copy(s) of your credit file and show it is clean you are free to go. However a word of caution, don't be in too much of a hurry to incur debt again (such as a Credit Card) as you have just learned the hard way what can happen if it gets out of control again.


    John C
  • John C | 09 Jun 2014, 01:52 PM Agree 0

    Sorry Dean, I made an error. It is not the Credit Act, it is the Privacy Act that provides your rights of access to your Credit File.


    John C
  • Dean | 09 Jun 2014, 02:07 PM Agree 0
    Thanks, John. would getting the credit report you mention be wise in two ways: 1. I could use it to prove that I now have a clean credit history should I apply for credit, and, 2. I can find out if or not I now have clean slate? Yes, I do not want the burden of owing thousand and paying all that debt off again!
  • John C | 09 Jun 2014, 09:26 PM Agree 0

    Both points are correct. Nothing like being fully armed and informed.

    John C
  • Cara | 11 Jun 2014, 03:30 PM Agree 0
    I am curious, do banks access the npii to check individuals for home loans??? Or just credit check that they see from Veda etc. if so, if you have been clear for the time after initiating it and the such, wouldn't they see you as any other customer if nothing is present on your credit check from Veda etc?
  • John C | 12 Jun 2014, 09:12 PM Agree 0

    The procedure is usually as follows; the majority of lenders will just check Veda or D&B for your credit history & approve your loan application based on this information. They do not usually check the NPII as part of their preliminary Due Diligence. However prior to settlement the lawyers preparing the documents will carry out an NPII search to ensure you are not under any form of current Bankruptcy or Part IX/X administration or have pending action out against you (outstanding Bankruptcy Notice or Creditors Petition) prior to allowing settlement to complete. The only exception to this rule is where you have answered yes to a question have you been bankrupt or under any administration previously and they may elect to carry out a search to confirm that you are discharged.

    However, each financier will have their own policy and procedures and what I have espoused above may not be correct for every lender although it will not be too far out.

    John C
  • Steven J | 15 Jun 2014, 09:10 PM Agree 0
    Hi, I have finished paying my debt agreement in Oct 2013. This was paid out early by 6 months. I am starting a new job in 2 weeks as a sales rep. My income will be $95000 plus bonuses. However, I need a more reliable car. Can I apply for finance for a car? $15000 is all I would need and I can make payments on such a loan quite easily. Thank you in advance.
  • John C | 16 Jun 2014, 11:13 AM Agree 0
    Stephen J, I thought I had replied to your earlier post however it would appear the moderator for this site has not published it. Let me see if i can remember what I posted before.

    A freshly completed Debt Agreement irrespective of the conduct on how quickly it was completed or not will always be a barrier to getting any form of credit even for a secured loan facility for a new (or used) vehicle whilst ever it appears on your Credit File. First thing is to let the vehicle dealership salesperson know that you need to speak with their Business Manager first to explain your circumstances. You do not want to intentionally waste your time or theirs if this position can't be overcome. Since the GFC the number & choice of financiers of motor vehicles has dropped significantly. First thing to check is make sure that the proposed motor vehicle financier was not a creditor of your Debt Agreement. That will be an automatic decline with that lender. Make sure you have a recent Credit Report from both Veda Advantage and Dunn & Bradstreet. Under the Privacy Act they must provide you one for free and must be provided to you with 14 days. If you can't wait the 14 days is will cost you have one provided immediately. If you are going to pay for one I recommend spending the extra money and get a Alert Subscription service. Veda is the main Consumer Credit Reporting Agency.

    Be prepared to mitigate the risk to a proposed lender for the new vehicle. This can be done either with a substantial deposit (usually a minimum of 25% or more) or by having a clean-skin guarantor (or co-borrower depending upon the personal arrangements) to support your application. Make sure you have a copy of your executed employment agreement. What will be important in the Employment agreement as whether you have a probationary period included in the employment contract. If yes, this may be an impediment to your application as most financiers don't want to be in the position of having to deal with a delinquent account because you have had your employment terminated. There are also possible issues under the NCCPA which will influence a financier's decision in this regard.

    If you have other supporting information that demonstrates your ability to make regular payments such as rental payments or any other loans that were not included in your Debt Agreement where you have maintained an excellent payment history will all help your case.

    If the dealership you are purchasing your vehicle from is comfortable with your position they are usually in a position to exert a special over-ride to get an approval in particular with high volume dealer. If you select a dealer with their own in-house finance facilities (usually only the very major dealers - One in Brisbane I know of, One in Sydney as well) where they can sign-off themselves as its their own money.

    If this fails please let me know and we'll arrange for you be introduced to an Advocate in your area to see if there an alternative way for you to be assisted.

    Trust this gives you an insight.

    John C
  • Mark | 18 Jun 2014, 01:55 PM Agree 0
    Firstly, entering a Part IX DA addresses the moral obligation that many debtors feel when weighing up their options.

    Typically, debtors reaching the decision to propose a DA will have already attempted negotiating directly with their creditors and will also have a significantly damaged credit report.

    The lodgement of a DA requires a signed Prescribed Information form, which states in clear language the consequences of entering a DA.

    A DA fundamentally protects the assets and income of the debtor while returning a significant dividend to creditors. It makes it harder to borrow in the future. I see that as a fair outcome.
  • Steven J | 19 Jun 2014, 08:17 PM Agree 0
    Thankyou John C. You have answered alot of my questions. I think I might need to wait some time.
  • John C | 21 Jun 2014, 01:29 AM Agree 0

    I agree with some of your comments and I do not have any issues with people wanting to do the right thing where they can. However, to continue to punish them by blacklisting them until seven years has expired is counter productive and of convict mentality. We are in the year 2014 not 1788. The whole system of bankruptcy, Part IX & X's needs to be reviewed completely and brought in to the modern times. If you want to encourage people to do the right thing, they need to be encouraged and supported, not be kept down trodden and kicked like a mangy dog. This post is littered with people who thought they were doing the right thing by entering DA's only to find when they have, to be continued to be punished after completing their arrangements, thus turning what should have been resolution into long term pain & suffering when it would have been much better for them to go bankrupt and end it once and for all and save all that money. The reasons for doing a Part IX or X in the majority of cases does not justify the on-going pain it causes after completing it when it would far easier and simpler to submit a Debtors Petition and then apply for a Section 73 Annulment and come out with NO listing on their Credit Reference file and MORE IMPORTANTLY achieve the same result as Debtor Agreement does. That's why I am opposed to Part IX's and X's in the majority of cases, as the benefits in most cases is just not worth the pain under the current legislative structure. Take Stephen J for example, it would appear he has done the "right thing" and is still being punished for it! Now that's wrong and I believe he may have been given incorrect advice by the DA company he contracted as they were more interested in the fees they were earning rather than his welfare.

    I have seen hundreds of people who have done DA's when in my view they should have looked at other alternatives.

    So peoples, if your are in trouble and a DA company is trying to talk you into a Debt Agreement, for heavens sake don't sign anything until you have received independent legal advice first.

    There will be in many cases better alternative solutions available which still resolve the immediate urgent debt crisis issues, however not have the long term sting in it's tail that a Debt Agreement brings.

    Stephen J, all is not lost and don't give up to easily. Give Greg from G&H Financial in North Sydney a call as he seems to have some very good connections and he is a straight shooter.


    John C
  • Catherine | 28 Jun 2014, 09:33 PM Agree 0
    Ok, so, I've read most of the questions and answers. I am on my last payment for my DA ($24K) next month July 2014.

    Can I get a lone for as little as 2-3K sometime in November or December?

    Or can you refer me to someone who might be able to?


  • Mark | 30 Jun 2014, 01:21 PM Agree 0
    Hi John,
    I wouldn't offer professional advice along the lines of your s73 Annulment proposal, and I truly doubt you could find a registered trustee to support it as cost effective alternative to a Part IX.

    To blithely recommend a debtors petition as the path of least long term consequence makes me wonder what your experience of bankruptcy has been.
    AFSA on the consequences of annulment:
    "Your name will appear on the National Personal Insolvency Index (NPII) forever, with the record showing that your bankruptcy was annulled and on a credit report available from a credit reporting agency for 2 years from the date of annulment, or 5 years from the date you became bankrupt, whichever is later."

    The Part IX scheme is a relatively recent change to act and I agree that there has been some outrageous behaviour from many DA Administrators, particularly in the marketing of their services.

    My chief complaint is regarding the credit reporting of a Part IX vs Bankruptcy. I'm not in the lending business, but somebody who manages to adhere to the commitments of a Part IX would seem a better financial bet than a discharged or annulled bankrupt.

    Is it not in the community interest that the Part IX debtor be rewarded?

  • John C | 30 Jun 2014, 04:22 PM Agree 0

    Who's offering advice? I am stating fact! In layman's language a Section 73 could be viewed a Debt Agreement in reverse. Under a section 73 you still need to make an offer to your creditors (as you do with a DA) however once the Section 73 proposal is accepted by the creditors the Bankruptcy is annulled in that instant and has to be removed from your credit file as an annulment is defined as a legal fiction. As long as the debtor keeps to their arrangements then it is no one's business. Better than being punished for five/seven years with the listing showing on the credit file that time as either a bankruptcy or Debt Agreement.

    My experience with this subject is extensive and personal. Until the legislators change the Act then we have to use the law to one's best advantage. However I am not saying that everyone should do a debtors petition and then a Section 73, there will be certain circumstances where a DA will be preferable however everyone should ALWAYS seek independent advice to review their options before making any decisions. Would be happy to catch up and have a coffee to discuss in more detail. - John C
  • Broker | 30 Jun 2014, 05:16 PM Agree 0
    There is also other options for unsecured debt mediation that is not a part nine or a part ten (I; .act of Bankruptcy) you wont end up on the NPII Index.

    Post a message and I'll advise further
  • Steven J | 30 Jun 2014, 08:49 PM Agree 0
    You are right John C. I did think entering a part ix would be the right thing to do and better looked upon than a bankruptcy by future lenders. Unfortunately, I was on my own at that time with no-one to help and in a vulnerable financial position.
    Fox Symes offered me an easy, stress free way out, sold to me as a lifeline and the first step to fixing my financial situation. At the time, i didnt think i had any other option. If only I knew then what I know now.
    My advise to anyone considering a part ix, if possible Dont!! There are other ways. You need to explore all your options.
    Im stuck now for another two years. I have a combined houshold income of $180, 000pa and cant get a $15000 loan for a car in my name unless I pay a huge interest rate, 18% or more, with a 20-30% deposit. One silly mistake has ruined my financial freedom for what seems forever!!!!
  • bernadette | 08 Jul 2014, 10:07 PM Agree 0
    John C reading through the comments made me think you really know what you are talking about , i would really like to get some personal advise if i can get your info. My husband and i have a large unsecured debt and seriously thinking in doing a part 9 debt agreement but i am doing a little research if there are other option for us, i am concern about leaving a permanent mark against our credit rating so i could really use some help. thanks in advance
  • John C | 09 Jul 2014, 01:24 PM Agree 0
    Catherine, whilst ever the Insolvency listing remains on your Credit File the ability to obtain an unsecured loan irrespective of the amount will be a challenge. I wish I could be the bearer of better news. This is what is wrong with this country where you continued to be punished for firstly making a mistake and then for trying to do the right thing. This is what governments want to do. This is how they can control you! You may need to enlist the assistance of a family member or friend to either be a co-borrower or guarantor to help you re-establish your credit worthiness. Otherwise you will need to wait until the entry has been removed off your file.
  • John C | 09 Jul 2014, 01:27 PM Agree 0
    Hi Broker,

    I would like to know of your other options. If they are inexpensive options to either DA's or Annulments I would be very interested to know. There are not many options at law available to the general population. Can you please let me have a contact point so I may communicate withg you. Cheers, John C
  • John C | 09 Jul 2014, 01:37 PM Agree 0
    Hi Bernadette,

    Please contact me on credit at and I will put you in touch with an Advocate in your area to assist you should your circumstances warrant it.

    John C

    Cheers, John C
  • bernadette | 09 Jul 2014, 04:27 PM Agree 0
    John C
    Thanks heaps! I will be in contact with you
  • bernadette | 09 Jul 2014, 10:01 PM Agree 0
    Hi John C
    I am having trouble looking you up I must be doing it wrong
  • John C | 10 Jul 2014, 10:29 AM Agree 0
    email me on ""
    John C
  • Paul | 10 Jul 2014, 07:03 PM Agree 0
    Hi all

    I have been following this thread for some time as I made the worst choice and enter a Part IX - anyway in short, I was reading a moneysmart document released in Feb 14 by ASIC which appears to state the Part IX is now only recorded on file for 5 years from when it commenced.

    Page 8 > What's in your credit report box > other information....

    Might make a call tomorrow to confirm the 7 to 5 years has actually changed and is correct !

  • Paul | 10 Jul 2014, 07:04 PM Agree 0
    Here's the link:
  • Mark | 11 Jul 2014, 10:19 AM Agree 0
    Paul, I understand it to be 5years from lodgment or 2 years from completion, whichever is longer.

    Only for debt agreements 3 years or less will it be removed after five years.
  • Ricky | 11 Jul 2014, 11:35 AM Agree 0
    I have been following this post for quite a time. I thank John so much for educating poeple and leading them to right path. And he is very right in saying that when people are still punished while doing the right thing of paying back by part IX. And I think that if government ease the conditions of it by making legislations that they will not be treated as bankrupts are, then less people will go bankrupt and atleast will agree to pay something back by part IX. But unfortumately this is not the case.
    I am glad though there is some progress in easing the law by reducing the period of listing. Thanks Mark. This is little bit relief that I will be discharged two years earlier than what it was prior to this amendment.
  • John C | 11 Jul 2014, 02:53 PM Agree 0
    Hi Ricky,

    I agree with your sentiments, however this will never happen in our lifetime unless something positive is done to change the legislation. Whilst ever the big end of town control the incumbent Government that's where it will stay. What it needs is to have a independent association / party to take up the cudgels to get this change. You will NEVER see the current Government or the Opposition party (if & when they regain power) do this as it is not in their interest to do so.

    There is a group who are so incensed about the UNFAIRNESS of the various legislation in all areas of business and consumerism including the current Privacy and Credit Legislation that they have formed an Association to tackle this idiotic legislation head-on. They need YOUR support so jump on board and join them and help them get change occurring. I have..... great Investment at $77.00.

    Cheers, John C
  • Catherine | 11 Jul 2014, 07:28 PM Agree 0
    John C,

    So what does mean?...

    Dear Catherine,

    After your last payment hits our system, a Paid Out letter will be sent to you.

    AFSA (Australian Financial Security Authority)will also be notified and you will receive a Completion Certificate from them and they will take off Debt Agreement from your credit report.

  • John C | 14 Jul 2014, 10:08 AM Agree 0

    Who has issued the letter stating this information?

    Once the DA has been registered with the AFSA it remains on your AFSA file in perpetuity. The CRA's under the new legislation will keep it on your file for minimum of 5 years (Assuming it has been discharged within 3 years) or if it takes longer to be discharged they will add another 2 years to the discharge date. This applies to either a DA or Bankruptcy. e.g., if a Bankruptcy is not automatically discharged after 3 years and is extended for another 2 (+ years) years (and this can happen if there is an objection to debtor's discharge) then the legislation states that the time it is removed will two years after discharge has occurred.

    The information provided in the correspondence to you appears to be contradictory, hence my question who issued this letter and made this statement.

  • shane | 06 Aug 2014, 01:20 PM Agree 0
    Hi john, have just joined this forum as I need some advice. Im at the very early stages of entering into a debt agreement. I enlisted foxsymes to help me, but after reading some of the comments im not entirely convinced that this is my best option. I kind if felt like my back was against the wall as I was being hounded by the lion finance group as they bought my debt from the ANZ bank. They sent me to court as they wouldnt accept my re payment offer, anyway I now have a new partner who wants to help me clear my debt. Sooner than later as we would like to buy a house together. Im under the impression that if I pay back the debt earlier that im might have a chance of borrowing for a house together? But a debt agreement might go against me doing this? Should I annul the agreement and try to negotiate with the finance company myself? My debt is $14,000
  • John C | 06 Aug 2014, 07:12 PM Agree 0

    Whilst you have provided good information, it is not enough to be able to review your full position in order to make any recommendations or suggestions as to whether you see your legal advisor, visit an Advocate or continue down the path you are on. Please email me on with your contact details so I can speak to you in more detail. It would appear from your language that you may have already entered a Debt Agreement which, if it is the case, could have challenges in annulling it! If you have not entered into the agreement or still are in the cooling off period then by all means exercise your rights and take advantage of this until you have explored all your options. To be punished for five years is an extremely undesirable option!

    John C
  • Jason | 02 Oct 2014, 07:07 PM Agree 0
    Hey just a quick few questions I entered a part 9 a couple of years back I was not struggling with load just lookin to consolidate a few I told the people that when I signed up for it and they said it may or may not affect my credit file me bein young I didnt reasearxh it more n now it has pretty much stuffed up everything is there anyway I can get it removed because they lied to me to get me to sign up thank you for your time
  • Faye M | 03 Oct 2014, 10:58 AM Agree 0
    Jason, I agree these companies who do these debt arrangements are so unethical and so greedy that they don't warn clients of the impact on their credit records. What's the use of your good intention by trying to pay off your credit if the result will show a bad credit report due to this debt agreement. This is very unAustralian, you signed the agreement without reading it but relying on their misrepresentations. The government should regulate this practice.
  • John C | 03 Oct 2014, 12:11 PM Agree 0

    Unfortunately once you are in it is very difficult to undo. If you have completed your Debt Agreement that's it. The only positive thing is that under the revised APP that the listing can only now stay on for a maximum of five years (there are one or two exceptions where this will not apply) on the various Credit Reporting Agencies. However it will remain on your NPII file in perpetuity. If you are still in the Debt Agreement and there is still a considerable time to go there maybe another alternative to bring the matter to a head, however we would need to see your position and circumstances to ascertain as to whether it would be worth your while to consider that option and discuss same with your Legal Advisors.
  • John C | 07 Oct 2014, 12:26 PM Agree 0
    Fay M, it is regulated by the Government, that's the problem! Each of the practitioners of Debt Agreements are operating according to the Legislation so there is nothing illegal about it. Immoral yes certainly however they are operating within the Law. A new political group has recognised this onerous legislation as being immoral and flawed. The has the Insolvency Legislation and the Privacy Legislation on their radar as being one of their main platforms to have this legislation reviewed, changed and modernised as the current legislation is draconian and not conducive for positive credit reporting or encouragement of positive credit behaviour. All we can do in the meantime is try and warn everyone of the pitfalls of the current legislation. However if you believe change is needed join the Small Business Party and help them seek change.
  • Pauline | 10 Oct 2014, 11:24 AM Agree 0
    Well I have been discharged from bankruptcy in 2013. Will it stay with me forever now. How long after the discharge will I be ok. Will I ever get into another rental property?
  • Faye M | 13 Oct 2014, 12:28 PM Agree 0
    You should be able to get a loan straight away as there are some lenders who will lend you from day 1 after you are discharged from bankruptcy.

  • John C | 13 Oct 2014, 01:42 PM Agree 0
    Pauline, the listing will stay on your file for five years from the date of your Bankruptcy. This will not prevent you from renting a property as the declaration on the tenancy application only asks if you are bankrupt which of course you are now not, as you have been discharged. The listing on the NPII will remain in perpetuity however most lenders do not bother with a NPII Search, relying on the CRA's Credit Report to base their decision.

    In respect of Fay M's comments, it will be highly unlikely to secure a unsecured loan (Personal Loan, Credit Card etc.) whilst the entry remains on your Credit File. Those lenders who would CONSIDER a loan will want security to offset the loan (even Car Finance Companies will very rarely look at you even with a 50% cash deposit) so more than likely if you find someone who will, just make sure you count your fingers after doing the deal to make sure you have not lost any in the transaction.
    Cheers, John C
  • Lynn D | 17 Oct 2014, 01:29 PM Agree 0
    I have been in a debt agreement now for 3 years. When I entered this agreement it was sold to me as a consolidation, rather than a bankruptcy option. It did not affect me until last year when I looked into salary sacrifice and they told me then about the details of a part 9. I called the company and they explained in quite fine detail but I am already in it so it doesnt matter. The law needs to change so that they must verbally and write the bankruptcy note. My whole debt was only 18000 but i had lost my job due to no work and did not want to lost my house. They fed me crap when I was vulnerable and I think it is the lowest action a business could take and I for one am still furious and all I can do is 'get over it' cos nobody will help.
  • John C | 20 Oct 2014, 10:27 AM Agree 0
    Lynne D, Please join the and give them your support as a Foundation Member. The issue you and everyone else who have been caught in this trap is one of their major policy platforms for change. Review their position on the Privacy Act and Bankruptcy Act. Help them to make change and get involved.
  • nadia | 05 Jan 2015, 09:36 PM Agree 0
    Hi, any advice would be greatly appreciated!
    I am just about to have my debt agreement sent to me to sign before lodgement to the government. I have been paying a debt agreement company for the last 3 months. I have about $25K in small loans and c/c debt which I was unable to pay due to loss of income. I am really worried to go through with it and have changed my mind. Just wanting to know if it is too late? and also what about all the money I have already paid? plus what would you think the chances of my creditors making arrangements with me after all this time would be? Please help, thanks so much!
  • Faye | 12 Jan 2015, 10:29 AM Agree 0
    Hi Nadia,
    Before you sign the agreement, please read this information from ASIC. Try to talk to your creditors directly first and negotiate a suitable payment arrangement.
  • John C | 13 Jan 2015, 01:23 AM Agree 0

    Before I could make any suggestions I would need to know more about your position in order to be able to give you some options to consider. Drop me an email with your contact details to and I can then either assist you or refer you to an appropriate Advocate in your area. Depending upon your circumstances Debt Agreements are not necessarily the best way to go. If you have not signed anything it's never too late. Don't be coerced into entering any agreements unless you are completely satisfied and comfortable with your decision and the proposed/anticipated outcome. Once you have entered into a Debt Agreement, it is very difficult to reverse the process. Any money paid to date will have been lost in the majority of cases. However there are options that may have not been explained to you and you should at least explore these to ensure that you have investigated all your available options.

    Kind regards,

    John C
  • Jessica | 16 Mar 2015, 10:24 AM Agree 0
    Hi, my partner signed a debt agreement with fox symes end of last year with $16,500 in the agreement due to losing his job. We were told that if he was to pay that off quicker for example in the next year then he wouldnt have the agreement on his file anymore and it would all be cleared. Is that correct or would he still have it on his file for 5 years and not be able to get a home loan till than?
  • John C | 16 Mar 2015, 11:57 AM Agree 0
    Jessica, irrespective how quickly you pay the Debt Agreement, the listing will remain on your partner's credit file for five years from the date that he entered into the agreement. If he has discharged his obligations sooner this I believe should be noted on his credit file showing that it has been completed at the earlier date. Either way the credit infringement listing will still remain for the five year period before it is removed by the Credit Reporting Agencies.
  • Lauren | 22 Apr 2015, 11:50 PM Agree 0
    Hi, what should I do if I have concerns regarding the conduct of my formal debt provider- being moved from consultant to consultant, having to chase information such as money owed details, being called the wrong client name, asking questions regarding increasing my minimum payment and having those questions blatantly by my "client case manager"? I feel as if I am being manipulated by a corrupt system at this point in time.
  • John C | 27 Apr 2015, 01:11 AM Agree 0

    You pose a very good question. I am assuming that you mean that the original debt that was incurred has been sold/transferred/acquired/moved to another company allegedly saying they have purchased/owned the debt! The first thing I would be doing is to ask for proof. This proof would not be a letter from this company, the proof should a settlement statement from the former creditor along with the copy of the sale of Debt contract to show the alleged transaction. No can show then you no can pay! Secondly I would then be asking for a DEED of RELEASE from the original Creditor as until you have this there is no guarantee that if you pay the new alleged owner of the debt that the original creditor will not pursue you. If there has been an infringement marked on your Credit File by the original creditor, as the original Creditor has been paid allegedly out, therefore you indebtedness to the original creditor has been discharged and this should be shown and noted on your Credit File. So until you have a Deed of Release from the original Creditor I certainly would not be paying anything to the new alleged owner of the debt. Depending upon the amount of the alleged debt involved, it may be wise to obtain some independent legal advice as to your rights. If you would like more information please email me on with your contact details and I can either discuss in more detail or refer you to an appropriate Finance Counsellor in your area to assist you. Please include your address details so I can ascertain the most efficient way to assist you.

    Upon reviewing your post again, these people I believe have a serious issue, so if you could contact me I would like to have more information that I can seek further advice for you.

    Kind regards,
    John C
  • Megan | 25 Jul 2015, 11:54 AM Agree 0
    My husband entered into a part ix agreement in 2009 and at the time we were told it would stay on his credit file for 7 years. However I am reading that others have had it removed after only 5 years. The whole debt was repaid within 15 months and he has been released. Could someone please clarify if it's 5 years or 7 years? I am only now aware it will stay on his permanent record forever (which we weren't told at the time....Grrrrrr ) but we'll just have to live with that. But we are hoping to buy a house and we're waiting until his 7 years are up but if it's 5 years, then we can do it sooner! Advice please
  • John C | 27 Jul 2015, 12:37 PM Agree 0

    Under the new legislation the time it remains on your various Credit Bureau Files is now restricted to just five years. The only time an infringement could remain on your file for seven years if you are listed for a "Serious Credit Infringement" (and there is ? about this as I would have thought required a Court decision as in my book only a Court can issue a punishment) or as a "clear-out", and cannot be found.

    Just be sure contact Veda ( and Dunn & Bradstreet ( and request a free Credit File check which they must provided to you by law (will take 10-20 days to arrive) and any credit infringements listed on your files should have a date printed on them showing the date that these entries will be removed.

    Hope this assists you.
    John C
  • Lynn | 28 Jul 2015, 08:46 AM Agree 0
    Megan, it is definitely 5 years, this was another problem for me as I commenced paying my debt agreement in October 2011. Because I moved house, they had me sign a whole new agreement which did not get signed off until august 2012, all the while I was paying my fortnightly agreed payment. My date of it coming off my credit file is August 2017 even though I will have finished paying it in October 2016.
  • Lexina Brown | 03 Aug 2015, 03:58 PM Agree 0
    I have just begun a part 9 debt agreement and now checking for cheaper car insurance only to be refused after I ticket the box about the debt agreement
  • Bj | 26 Aug 2015, 06:12 PM Agree 0
    Hi guys, I have a question, who let's companies know (such as Veda) that you are now discharged from bankruptcy?or if there has been no objection to the discharge does it automatically happen on the assigned day? I'm a bit confused as I keep getting contradictive responses from parties involved.
  • Steph | 27 Aug 2015, 02:09 PM Agree 0
    I entered into a part 9 last year. It was accepted by the creditors based on I have my partners support. But now circumstances have changed & my partner are no longer together & I don't have his support. I am having to move interstate & take a job that is less than what in currently on. Based on my new income I won't be able to make the current payment set out in the agreement & there's no guarantee my creditors will accept a new agreement. Can I file for bankruptcy? And can they take my assets? I have a car that is used as security for another loan. Can they take my car?
  • John C | 28 Aug 2015, 09:48 PM Agree 0

    The legislation states that your bankruptcy listing has to be removed from your credit file five years from date of Bankruptcy. If you do a Section 73 or Section 153 Annulment then your Trustee must notify the Credit Reporting Agencies that your Bankruptcy has been annulled and the entry is to be expunged from your Credit File. Bankruptcy is normally discharged after three years unless your Bankruptcy Trustee files an objection. If this happens your Bankruptcy can be extended by up to a further five years (eight years in total). Your question as to whether the listing stays on your file where the bankruptcy has been extended is a good one. I do not know the answer to that question. Unless the extension is published in the Government Gazette there is the possibility that it (the extension) will not be recorded on your Credit File.

    John C
  • John C | 28 Aug 2015, 10:10 PM Agree 0

    If your circumstances have changed then contact the Administrator who is handling your Part 9 Debt Agreement. Explain the circumstances and advise what is the new amount you can afford to pay. Do not let them try and talk you into keeping the current arrangements or extend the time frame at a reduced payment amount, if you definitely can't afford it. Yes you can definitely submit a Debtors Petition and declare Bankruptcy. In respect of your motor vehicle as long as the equity between what you owe and what the vehicle is valued at (Dealer Wholesale) is less than $7,600 then the Bankruptcy Trustee will not seize your vehicle and sell it. However be wary about this as not all lenders will allow you to keep the vehicle if you declare Bankruptcy. Some lenders will see Insolvency as a threat to their security and will repossess the vehicle and sell it to minimise their "prospective" loss. Some lenders don't care, particularly if your payment history has been good. With Bankruptcy the you will have to declare the assets and loan in your Statement of Affairs and the Bankruptcy Trustee is obligated to contact the lender to let them know you have committed an act of Insolvency. Therefore it may be prudent to contact your car financier and discretely ask the question about their policy, as an act of insolvency usually is a breach of the loan agreement with them.

    It is likely that the Debt Agreement Manager will arrange a revised payment plan at a reduced amount as they will not want the loss of the enormous fees they are gouging out of your predicament. It will of course require the consent of the creditors to be approved.

    If this fails, please contact me on and I may be able to suggest other options available to you or refer you to an appropriate qualified professional to assist you.
  • John C | 28 Aug 2015, 10:16 PM Agree 0

    As you have committed an act of Insolvency many Insurance companies will not insure you for fear that you may make a claim on the policy for other reasons than what the Insurance Policy was intended. Not the first time this has happened. You may need to engage the services of an Insurance Broker to locate an Insurance facility for you, unfortunately at a higher cost.
  • Nicola | 28 Sep 2015, 07:21 AM Agree 0
    Hi John I have emailed you with the email you have put in previous comments, really looking for some options we are about to take out a debt agreement but I have my read anything good about them, we have a house with a mortgage and don't want to loose it, really unsure what to do are there other options other than this?
  • Declan | 08 Mar 2016, 10:00 AM Agree 0
    Hi John,

    I have been reading the new legislation outlined below, and according to this after a debt agreement has been discharged it will be removed from your credit file after 5 years. It also states that the NPII will remain listed for a limited time and be removed after 5 years after the date of the agreement is made. You mention that your information remains listed on the NPII forever, according to this it does not.

    What are your thoughts on this?

    Completed debt agreements
    Where the obligations of your debt agreement are discharged (you have completed the debt agreement conditions), information about your debt agreement will be removed from the NPII:

    five years from the date the debt agreement is made or
    the date the obligations are discharged
    whichever is later.
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