Key Takeaway
A Part IX debt agreement doesn't have to define your financial future. While the listing stays on your credit file for a set period, there are legitimate steps you can take to rebuild your credit score -- and in some cases, have inaccurate listings removed sooner. You took control of your debt. Now it's time to take control of your credit.
You did the right thing. When the bills were piling up, when the phone calls wouldn't stop, when it felt like there was no way out -- you made a decision. You entered a Part IX debt agreement because it was the responsible choice. You committed to paying back what you could, on terms that were fair. And you followed through.
So why does it still feel like you're being punished?
That's the cruel irony of a debt agreement. You did the honest thing instead of walking away. You avoided bankruptcy. You paid your creditors. And yet, years later, your credit file still carries the mark. Every time you apply for finance -- a home loan, a car, even a phone plan -- that listing is the first thing they see.
If you're reading this feeling like the agreement was supposed to be the end of it, but instead it just started a different kind of stress, I want you to know: you're not alone. And there is a path forward.
What Is a Part IX Debt Agreement?
A Part IX debt agreement is a formal, legally binding arrangement under the Bankruptcy Act 1966. It sits between informal payment plans and full bankruptcy. When you enter one, you propose to repay a portion of your unsecured debts over an agreed period -- usually three to five years. Your creditors vote on whether to accept the proposal, and if they do, it becomes binding on everyone.
The agreement is administered by a registered debt agreement administrator, and while it's in place, your creditors cannot chase you for the debts covered. Once you've made all the required payments, the agreement is complete.
It sounds straightforward. But the credit consequences are anything but.
How a Debt Agreement Affects Your Credit File
Here's where it gets real. A debt agreement creates two separate impacts on your credit file.
First, the agreement itself is listed. Under the Privacy Act 1988 and the credit reporting framework, your debt agreement appears as a "Part IX Debt Agreement" on your credit file. This is reported by the Australian Financial Security Authority (AFSA) and shows up on all three bureaus -- Equifax, Experian, and illion.
Second, the individual debts included in the agreement may also carry default listings. So you could be looking at the agreement listing plus multiple defaults, all sitting on your file at the same time.
How long does it stay? The debt agreement listing remains on your credit file for five years from the date it was accepted, or two years after completion or termination -- whichever is later. For most people who complete a three-year agreement, that means five years from the start date.
What does this mean in practice? It means lenders see the agreement every time you apply for credit. Most mainstream banks treat an active or recent debt agreement as an automatic decline. Even after the listing is removed, some lenders ask whether you've ever entered a debt agreement -- and the National Personal Insolvency Index (NPII) keeps a permanent record.
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Common Myths About Debt Agreements and Credit
Myth: A Debt Agreement Is the Same as Bankruptcy
This is one of the most damaging misconceptions. A Part IX debt agreement is explicitly an alternative to bankruptcy under the Bankruptcy Act 1966. While both involve formal insolvency processes, they are legally distinct. Bankruptcy typically lasts three years and has more severe restrictions on travel, employment, and asset ownership. A debt agreement allows you to retain more control and avoid many of those consequences. The credit impact is different too -- bankruptcy stays on your credit file for five years from the date you become bankrupt, or two years after discharge.
Myth: Your Credit Is Ruined Forever
It certainly feels that way when you're living with the listing. But the reality is that credit files have retention periods governed by the Privacy Act 1988. The debt agreement listing will be removed after the mandated period. Once it's gone and you've built a positive credit history, lenders assess you on your current profile -- not your past. Your credit is not permanently damaged.
Myth: You Can't Get Any Credit While the Agreement Is on Your File
While most mainstream lenders will decline applications during an active debt agreement, there are specialist lenders and products available. Once the agreement is completed (even if the listing is still visible), your options begin to expand. A secured credit card or a small personal loan from a specialist provider can be a stepping stone to rebuilding. The key is to be strategic about when and where you apply.
Myth: Paying Off Early Removes the Listing Sooner
Completing your agreement early is a positive step, but it doesn't mean the listing disappears from your credit file immediately. The retention period is calculated from the start date of the agreement, not the completion date. If you entered a five-year agreement and paid it off in two, the listing still stays for five years from the original start date. Early completion does, however, mean the listing shows as "completed" rather than "current," which some lenders view more favourably.
What Can Actually Be Done About Your Credit
Here's where I want to give you something concrete. Because while some things are fixed -- the retention period is what it is -- there are real, legitimate steps you can take right now.
Check Whether Listings Are Accurate
The first thing we do at Australian Credit Solutions is examine every listing on your credit file with a fine-tooth comb. Under the Privacy Act 1988, credit reporting bodies and credit providers are required to ensure that the information they hold is accurate, up-to-date, and complete. If it isn't, they must correct it.
We regularly find errors in debt agreement-related listings. Incorrect start dates. Wrong amounts. Defaults that were included in the agreement but are still showing as separate unpaid debts. Each of these errors is a potential ground for correction or removal.
Challenge Defaults That Don't Comply
Before a credit provider can list a default, they must follow a strict process under the Privacy Act 1988 and the National Credit Code. They must send a written default notice to your last known address, give you at least 14 days to remedy the situation, and ensure the amount owed is above the reporting threshold.
If any of these steps were missed -- and we see it happen regularly, particularly with debts that were already heading into a debt agreement -- the default may be eligible for removal regardless of whether the debt was genuine.
Expert Tip from Elisa
"Many of our debt agreement clients are surprised to learn that individual defaults listed alongside their agreement were never properly documented. The credit provider may have skipped the required notice because they knew the debt was going into an agreement anyway. That shortcut can work in your favour -- it gives us legitimate grounds to have the default removed."
Start Building Positive Credit History Now
You don't have to wait for the listing to fall off before you start rebuilding. In fact, the sooner you begin, the stronger your credit profile will be when it does.
- Pay every bill on time, every time -- utilities, phone, internet. These are now reported under comprehensive credit reporting.
- If you can access a small credit product (like a secured credit card), use it responsibly and pay the full balance each month.
- Avoid making multiple credit applications. Each application creates a hard enquiry on your file, and too many in a short period signals desperation to lenders.
- Set up direct debits for recurring payments so nothing slips through the cracks.
- Check your credit file every three to six months to track your progress and catch any new errors early.
Know Your Timeline
Understanding exactly when the debt agreement listing will be removed gives you something to work towards. Calculate the five-year mark from your agreement's start date and the two-year mark from completion -- the later of those two dates is when the listing should disappear.
If the listing is still showing after that date, contact the credit reporting body immediately. And if you need help getting it corrected, that's something we handle every day.
A Real Scenario: From Debt Agreement to Home Loan
We recently worked with a client -- let's call him Daniel -- who had entered a Part IX debt agreement three years earlier after a business downturn left him unable to manage repayments on several personal loans and credit cards. He completed the agreement on schedule, but when he tried to apply for a home loan, he was knocked back immediately.
When we reviewed his credit file, we found three default listings that were technically part of the debt agreement but had been listed separately -- and one of them had an incorrect date that extended the retention period beyond what it should have been. We challenged all three on procedural grounds. Two were removed within four weeks. The third was corrected, bringing its removal date forward by eight months.
With a cleaner credit file and 12 months of positive repayment history on his current obligations, Daniel was able to secure conditional approval with a specialist lender. It wasn't the lowest interest rate on the market, but it was a home loan -- something he'd been told he could never get.
*This is a composite scenario based on real client outcomes. Individual results vary.
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What to Do Next
If you've completed a debt agreement -- or you're close to finishing one -- the worst thing you can do is nothing. The second worst thing is to start applying for credit everywhere and hope for the best.
Here's what I'd recommend instead:
- Get your credit file. Request a free copy from Equifax, Experian, and illion. Look at every listing carefully.
- Identify potential issues. Are there defaults listed separately that were part of the agreement? Are dates correct? Were proper notices sent?
- Talk to a professional. A free credit assessment from Australian Credit Solutions can tell you exactly what's on your file and what can realistically be done about it.
- Start rebuilding now. Don't wait for listings to expire. Begin building positive credit behaviour today so you're in the strongest possible position when they do.
At Australian Credit Solutions, we're ASIC Licensed (ACL 532003) and led by qualified lawyer Elisa Rothschild (BA/LLB). We've been recognised as industry leaders three years running for our results in credit repair. We only take on cases where we've identified legitimate grounds -- which is why we maintain a 98% success rate on the matters we accept.
You made the hard choice when you entered that agreement. You followed through. Now let someone help you with what comes next.
Learn more about our dedicated credit repair after debt agreement service or explore our credit score improvement options.
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What Our Clients Say
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"I wish I had found Australian Credit Solutions sooner. They sorted out my credit issues professionally and now I have a much better financial future ahead."
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Elisa Rothschild
(BA/LLB)Principal Solicitor & Director
With over 12 years of experience in credit law, Elisa has helped thousands of Australians remove unfair credit listings and rebuild their financial futures. She leads Australian Credit Solutions' legal team with a focus on consumer advocacy and regulatory compliance.
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