If you sign up for your debt contract that will be repaid, you will be free of most of your unsecured debts, which is a toxic debt. Compare how this works if you continue to make payments on your credit cards. Like many people, you can only pay the minimum monthly refund on your credit cards. This way, you will find that it takes years to pay off your debts. Take a look at the moneysmart site (moneysmart.gov.au). It shows how $1,000 on your credit card can be converted into an 11-year loan because the amount you need flows slowly and you pay a large amount of interest. Compared to bankruptcy, the Part 9 debt contract is much more flexible and allows the borrower to have a number of options, including: If you meet your contractual debt obligations on time and do not miss any payment, it will be removed from your credit file after about five years. This will still be listed in your credit file for at least 5 years, even if you pour it prematurely. Your name will also be removed from the NPII after five years, or within one month and one day after release if it is more than five years.

You can continue to pay your creditors during the processing period, the amount of debt included in the debt contract is the amount owed on the reference date. However, you should pay your secured creditors all the time, as these are not included in the debt contract. As a general rule, fines are not demonstrable misconduct. This means that you must continue to pay them outside of your contract. If you get to a point where you are unable to pay your debts, a Part 9 debt contract can offer welcome relief. If you enter into such an agreement, your debts will be repaid for a certain period of time and the included creditors will stop calling while you are a party to a Part IX debt contract. Once you have your debt contract, you will have a clean slate on which you can rebuild your financial life. Sometimes someone who has successfully repaid a Part 9 debt contract will again find themselves in a difficult financial situation. In this case, the same services and solutions are not immediately available, which limits your chances of freeing up your debt. You cannot enter into a 9 debt contract if you have gone bankrupt in the last 10 years or in a debt contract.