Rapid Finance on 16 June 2022

If you’re looking forward to discharge from a Part IX Debt Agreement, congratulations! It’s important to celebrate this milestone and take a moment to reflect on your financial journey – both the challenges you’ve conquered and where it’ll take you next.

A Part IX Debt Agreement is a serious responsibility, but many people find the process cultivates positive financial habits that stay with them for the rest of their lives – seeing them own their own property and stay out of debt into the future.

For specialised advice on life after a Part IX Debt Agreement, the Rapid Finance team is here to support you as you navigate your next financial chapter. Generally speaking, though, this is what to expect after you’ve repaid the amount owed and are released from the agreement.

How do you become free of a debt agreement?

You are automatically discharged from your debt agreement once you’ve fulfilled your obligations to your creditors and no longer owe money. You can either repay your debt in installments over a timeframe outlined in your agreement, or you can repay the debt early to expedite your discharge. 

What happens to your old debts?

You can only be discharged from a Part IX Debt Agreement if you’ve satisfied the requisite conditions and met all repayments outlined in the agreement. 

There are some debts, however, that you may be required to keep paying off after you are released from the Part IX Debt Agreement. These include secured debts and any debts owed to the Commonwealth – more on that soon.

What is a secured debt?

A secured debt is when a lender requires you to use a secured asset as collateral to offset the risk of a loan. As an example, if you’re buying a new car, a secured car loan will mean the car is collateral in the event you don’t meet repayment obligations, and can be seized by your lender in lieu of the outstanding money owed.

Which debts do I owe to the Commonwealth?

You may continue to owe the Commonwealth repayments if you have incurred debt for child support, Centrelink services, higher education loans or SPUR debts and fines. Likewise, you may be required to continue to meet court-ordered repayment obligations or any debts incurred by fraudulent activity in your past.

How will involvement in a Part IX Debt Agreement affect your credit history?

If you have the capacity to repay your debts early, this is a fantastic option. Then, once five years passes from the date you entered the Part IX Debt Agreement and two years after your Part IX finishes, if you continue to honour any loan obligations, your Debt Agreement will be expunged from your credit history – so long as your loan term doesn’t exceed five years.

Think of life after your Part IX debt agreement as a fresh financial start: it’s a chance to build a credit track record that will work in your favour in the future.

Your Debt Agreement Administrator will advise you on the precise terms of your agreement, and what you are expected to pay and when. If in doubt, contact them for clarification.

Reclaim your financial future

Good news: after you’ve been released from your Part IX Debt Agreement, your financial future is bright! It’s a real turning point, so it’s important to harness your momentum, get organised and form healthy (and sustainable) financial habits.

The Rapid Finance experts are here to make your life easier in this domain – plus you’ll find plenty of online tools, apps and templates to help you formulate your financial game plan.

Start with small steps

But even once your debts have been permanently removed from your track record, you may struggle to secure a new loan with a new lender. 

That’s because lenders like to see evidence of your ability to repay loans – preferably in an established pattern over a period of time. As you’re finding your financial footing again, start out small: the next time you need capital, apply for a small loan with an achievable term – preferably a small car loan and not payday loans. This is an excellent way to demonstrate your competency as a debtor – and you’ll be rewarded with a healthy boost to your credit score in as little as six months (depending when your part 9 falls off your credit file).

Accumulating small wins like this will position you as an attractive candidate for bigger loans when and if the time comes further down the track.

Don’t suffer in silence

Even if you’ve made it through a Part IX Debt Agreement, you may encounter financial hardship in the future. Act as soon as possible and seek expert help. You’re not alone, and the sooner you seek support, the more solutions will be available to you.

On a side note, don’t forget about our wholesale cars. We offer a one stop shop to help you source a vehicle through our extensive wholesale network.

Through our network, we will do some extra checks on your behalf as well as inspecting the vehicle to ensure it’s a great vehicle.

We will also check :

  • There is no money owing on the vehicle

  • The vehicle has not been a repairable write-off

  • The vehicle has not in any serious accidents 

  • We will check everything works on the vehicle 

  • We will get the roadworthy for the vehicle

  • We will do a detailed inspection on the vehicle 

Find out more info about our wholesale network vehicles.

For more information and to understand your options,  contact the Rapid Finance team today.