Quick answer
A Part IX debt agreement makes borrowing harder but not impossible. While it's active, most lenders decline unless the new loan pays the agreement out in full. Once it's completed, property-secured, private and asset lenders will often consider you, especially with clean bank statements. The listing stays on your credit report for at least five years from the start, and on the public insolvency index permanently.
Key points
- A debt agreement is not bankruptcy, and it doesn't stop you being a company director
- Credit files show it until five years from the start or two years after it ends, whichever is later
- Completed agreements read far better than active or terminated ones, so keep the completion letter
- A secured loan that pays the remaining balance can finish the agreement early and start the clock
Choosing a debt agreement over bankruptcy usually takes discipline. You committed to paying creditors an agreed sum over years, often while still running a business. Lenders know the difference, and the ones who specialise in credit-impaired clients tend to view a completed Part IX agreement as evidence that you stick to a plan. The question is which stage you’re at, because an active agreement and a completed one sit in very different places.
A quick refresher on Part IX
A debt agreement is a legally binding arrangement under Part IX of the Bankruptcy Act between you and your unsecured creditors. A registered administrator manages it, collecting your payments and passing them on. AFSA says agreements generally run for up to three years, or up to five if you own your home. To propose one, your unsecured debts, assets and after-tax income must sit under limits that AFSA indexes each March and September.
It’s personal, not corporate. If your company has debts, a debt agreement in your name doesn’t deal with them, though it often covers guarantees you gave for the business and credit cards used for business costs.
Where does it show up, and for how long?
- Credit reports. The OAIC’s retention period is five years from the day the agreement was made, or two years from the day it ended, whichever is later. Finishing a three-year agreement on time usually means it drops off around five years after it began.
- The National Personal Insolvency Index. AFSA’s public register keeps the record permanently. Lenders who ask about past insolvency can check.
- Repayment history. Accounts included in the agreement may show missed payments from before it started. Those age off after two years.
Because the index is permanent, there’s no point hoping a lender won’t notice. Disclosure, plus evidence, is the whole game.
Active, completed or terminated: why the stage matters most
| Stage | How most lenders see it | Realistic options |
|---|---|---|
| Active, payments up to date | You’re still repaying creditors under a formal arrangement; new debt adds risk | A secured loan that pays out the remaining balance; asset finance in limited cases |
| Active, payments behind | A warning sign; falling far enough behind can end the agreement | Talk to your administrator first; borrowing is unlikely until it’s back on track |
| Completed | A finished commitment, the best of the three | Property-secured, private, asset and some non-bank lenders; banks later |
| Terminated | Debts not resolved, creditors may pursue you again | Mainly property-secured or private lenders that clear the debts at settlement |
Ask your administrator for the completion letter as soon as the final payment clears, and check that both Equifax and Experian update the listing to completed. That one document does more for an application than any explanation you could write.
Can a business loan pay the agreement out early?
Often, yes, and this is the strategy many owners never hear about. If you own property with enough equity, a second mortgage or private lender may approve a loan that does two jobs at settlement: pays your administrator the full remaining balance, and funds the business need.
Paying out finishes the agreement sooner. Under the OAIC’s rule, the credit listing then runs for two years from the end date or five years from the start, whichever is later, so in the right timing an early payout can bring forward the day your file is clear. It also removes the obligation that stops most lenders from looking at you at all.
An illustrative example: a mobile mechanic entered a debt agreement 26 months ago and has $14,200 left to pay. They own a unit worth $610k with $395k owing, and want $40k for a second service van. A second mortgage lender approves $60k: $14,200 to the administrator, the rest to the business after costs. The agreement completes on settlement day. Run your own figures through the second mortgage calculator to see what’s possible.
Thinking of using this approach? Outline your figures for us so someone experienced can judge whether the equity stacks up. No credit enquiry is lodged for that.
Which lenders consider applicants after a debt agreement?
Start with your bank if the agreement finished some years ago, the listing has gone from your credit report and you’ve banked with them throughout. Banks offer some of the cheapest business money available, and a long relationship counts. If the answer is no, or it’s too soon, these lenders are the usual next step:
- Non-bank secured lenders, for completed agreements with property as security. See secured business loans.
- Private business loans, which suit active or terminated agreements where the loan clears the remaining debt.
- Equipment finance, secured by the vehicle or machine itself, where some financiers accept completed agreements.
- Invoice finance, which looks hardest at the creditworthiness of your customers.
- Unsecured lenders, usually only after the listing has aged off and recent bank statements are strong.
Directors take note: ASIC’s list of people who can’t hold office covers undischarged bankrupts and people under a Part X personal insolvency agreement. A Part IX debt agreement isn’t on it, so you can usually stay on as a director and keep trading through your company while you repay. Lenders will still read your personal file when you sign a guarantee.
A step-by-step plan
- Confirm the stage. Ask your administrator for a current statement: balance remaining, payments made, and whether you’re up to date.
- Pull both credit reports and check that every debt included in the agreement is shown correctly.
- Decide whether to pay it out. If you have property, compare finishing early against waiting.
- Gather documents. The agreement, the completion letter if you have one, your latest BAS and the past year of business banking.
- Explain it briefly. What caused the debt, why you chose an agreement, and how the business is different now.
- Apply to one lender that fits your stage. The business loan finder can help you shortlist.
Common mistakes
- Taking on new credit mid-agreement without checking. Ask your administrator first. Missing agreement payments puts the whole arrangement at risk.
- Forgetting the completion letter. Without it, lenders may assume the agreement is still running.
- Ticking “no” to past insolvency. The record is permanent and searchable.
- Waiting for the score to recover on its own. It does, slowly. A clean business bank account and on-time bills speed things up.
A finished agreement deserves a fair hearing
Seeing a debt agreement through takes years of steady payments. Owners who did that, or who are close to done, often make careful borrowers, and the right lender recognises it.
The enquiry takes around sixty seconds and isn’t a credit application, so nothing is recorded on your file. We won’t pass your details along to an assortment of lenders. A real person on our side reads it and gives you a call. Tell us the stage of your agreement and the balance left, if any, so the first suggestion we make is one that can actually work.
Frequently asked questions
Can I get a business loan while my debt agreement is still running?
It's difficult. Most lenders won't add new debt on top of an active agreement, and borrowing that puts your agreement payments at risk could see it terminated. The main exception is a property-secured loan that pays the remaining agreement balance in full at settlement.
How long does a Part IX debt agreement stay on my credit file?
The OAIC's retention rules keep it until the later of five years from the date the agreement was made, or two years from the date it ended. The National Personal Insolvency Index records it permanently.
Can I be a company director with a debt agreement?
Generally, yes. ASIC's list of people who can't be company officeholders covers undischarged bankrupts and people under a personal insolvency agreement, which is a different arrangement under Part X. A Part IX debt agreement isn't on that list, though lenders will still see it.
Is a debt agreement the same as bankruptcy?
No. It's a formal, binding deal with your unsecured creditors under Part IX of the Bankruptcy Act, where you repay an agreed amount over time instead of being declared bankrupt. Lenders still treat it as a serious credit event, though most view a completed one more kindly than a bankruptcy.
What do I need to show a lender after finishing a debt agreement?
The completion letter or certificate from your administrator, credit reports showing the agreement as completed, recent business bank statements and a short explanation of what led to it and what has changed.
What if my debt agreement was terminated?
A terminated agreement is harder to fund than a completed one because the debts weren't resolved. Some property-secured and private lenders will still look at it if the remaining creditors are paid out from the loan and the business itself is trading well.