Formal Debt Solutions

Are you struggling to manage your debt?
Our formal debt solutions provide a structured approach to regain financial stability.


A formal debt refers to any debt that is established through a legally enforceable agreement or contract between a borrower and a lender. This type of debt involves specific terms and conditions regarding repayment schedules, interest rates, and penalties for non-compliance. Formal debts can include various forms of borrowing, such as:

  •  Bank loans: Money borrowed from a bank with a fixed or variable interest rate, requiring regular repayments over a set period.
  • Credit card debts are revolving credit with an agreed-upon limit, monthly statements, and required minimum payments.
  • Mortgages: These are the type of loans specifically used for purchasing property, secured against the property itself until the loan is fully repaid.
  • Student loans: Funds borrowed to cover education costs, typically offering deferred repayment options until after graduation.
  • Car loans: Specific loans for the purchase of a vehicle, usually secured against the vehicle.


Formal debts are typically recorded and monitored by financial institutions and credit reporting agencies, influencing an individual’s credit score based on their repayment history.

Most Common Formal Debt Solutions

Formal debt solutions are legally binding agreements negotiated
with your creditors to arrange the repayment of debts under more manageable terms.

Part 9 Debt Agreement

Description: A Part 9 Debt Agreement, also known as Part IX, is a formal and legally binding agreement under the Australian Bankruptcy Act. It allows individuals facing financial hardship to come to an arrangement with their creditors to settle debts without declaring bankruptcy. This agreement involves proposing a fixed sum of money, which can be paid in installments or a lump sum, that is affordable to the debtor and acceptable to the creditors. The repayment amount is often less than the total debt owed.

Suitable for: Individuals with a regular income who can manage smaller, consolidated repayments but whose debts do not exceed the thresholds set under the Bankruptcy Act.

Part 10 Personal Insolvency Agreement

Description: A Part 10 Personal Insolvency Agreement, also known as a Part X, is another option under the Australian Bankruptcy Act aimed at helping individuals deal with unmanageable debts. This agreement allows for a trustee to take control of your property and affairs to negotiate with creditors on a repayment agreement that could involve selling assets or making a settlement offer.

Suitable for: Individuals who have substantial debts or assets and need a flexible but formal arrangement to manage their financial obligations, typically involving larger sums and more complex financial situations than those suitable for a Part IX.

Debt Consolidation

Description: Combining multiple debts into a single loan with a lower interest rate. It simplifies monthly payments and can reduce the total amount paid over time.

Suitable for: Individuals with multiple debt obligations, like credit card debts and loans, looking to streamline their payments.


Debt Management Plan

Description: A plan arranged with the help of a credit counseling agency that negotiates with creditors to lower interest rates and consolidate debts into a single monthly payment.

Suitable for: Those who need assistance to manage their debts but can afford regular payments.

Individual Voluntary Arrangement

Description: A legal agreement in the UK where you pay back a portion of your debts over a set period, usually 5-6 years. Any remaining debt is forgiven after the period ends.

Suitable for: UK residents with a regular income who can make consistent payments but whose debts exceed their ability to pay traditionally.


Description: A legal process where you declare inability to repay your debts. It can lead to debt discharge, but it impacts your credit rating significantly.

Suitable for: Individuals who cannot realistically repay their debts and need a fresh start. It impacts future credit access and public records.

Debt Settlement

Description: Negotiating with creditors to pay a lump sum less than the total amount owed can lead to significant debt reduction.

Suitable for: Those who have a lump sum of money available and wish to settle debts for less than the full amount owed.

Debt Relief Order

Description: A form of debt relief available in the UK for those with very low disposable income and assets, freezing debt payments and interest for a year. If the individual’s financial situation does not improve, the debts are discharged.

Suitable for: UK residents with debts under a certain threshold, few assets, and low income.

Contact Us

Ready to take control of your debt? Contact us today for a confidential consultation. Our team is ready to assist you every step of the way.

Our formal debt solutions service is designed to provide effective relief from debts through structured and legally binding arrangements. We offer comprehensive support, from initial assessment to the successful completion of your debt solution. Contact us to explore how we can help you achieve financial stability.

Difference Between Part 9 Debt Agreement And Part 10 Personal Insolvency Agreement

FeaturePart 9 Debt AgreementPart 10 Personal Insolvency Agreement th>
Legal BasisAustralian Bankruptcy Act, Part IXAustralian Bankruptcy Act, Part X
PurposeTo avoid bankruptcy by agreeing to pay a part of the debtsTo manage substantial debts through a formal agreement potentially involving asset liquidation
Eligibility CriteriaMust meet specific income, debt, and asset thresholdsNo specific thresholds; generally for higher debts or assets
Debt LimitApplies; specific limits on debt, income, and assetsNo limit; suitable for high levels of debt
ProcessThe debtor proposes a repayment plan based on their capability to payThe trustee takes charge, may sell assets, or arrange other means to satisfy creditors
Approval RequirementThe majority of creditors by dollar value must agreeRequires a special resolution: 75% by dollar value of voting creditors
Impact on AssetsTypically, assets are not soldAssets can be sold as part of the agreement
DurationUsually 3 to 5 yearsVaries based on the agreement, generally completed once terms are fulfilled like assets sold, debts paid
Effect on Credit Rating The negative impact, noted on a credit report for 5 years from the start or 2 years from the end, whichever is longerSevere impact, similar to bankruptcy, recorded for up to 5 years or more
SuitabilitySuitable for individuals who can repay debts in part and within set limitsSuitable for those with significant assets or debts, requiring more complex financial restructuring