Part IX Debt Agreement & Credit Score in Australia (2026)

Quick Answer: A Part IX (9) Debt Agreement is a formal insolvency arrangement under the Bankruptcy Act 1966 — not to be confused with informal debt repayment plans. Entering a debt agreement creates: (1) a listing on the National Personal Insolvency Index (NPII) — a permanent public record, (2) a listing on your credit file for 5 years from the date of the agreement (or 2 years after completion if that's later), and (3) notification to all three bureaus. Your credit score typically drops 100–200+ points upon entering a debt agreement. Rebuilding after a debt agreement is possible — Australian Credit Solutions can also review your credit file during and after a debt agreement for any incorrectly listed additional entries that can be disputed under the Privacy Act 1988. 98% success rate. No Win No Fee. ASIC ACL 532003. Industry Excellence Award 2022, 2023 & 2024. 4.9/5 from 976+ reviews. Over 5,000 Australians helped since 2014.

A Part IX Debt Agreement is one of the most significant financial decisions an Australian can make — and one of the least understood in terms of credit file consequences. The marketing from some debt agreement administrators doesn't always make the impact crystal clear.

What Is a Part IX Debt Agreement?

A Part IX (Part 9) Debt Agreement is a legally binding agreement under Part IX of the Bankruptcy Act 1966. It allows people who cannot pay their debts to make a formal arrangement with creditors — typically paying a reduced amount over a set period (usually 3–5 years) in full settlement of the debts included.

It is a form of personal insolvency — legally similar in structure to bankruptcy, though with different conditions and consequences.

Eligibility requirements (at time of entering the agreement):

• After-tax income below a threshold (indexed annually — approximately $87,000 in 2026)
• Unsecured debts below a threshold (approximately $130,000 in 2026)
• Assets below a threshold (approximately $130,000 in 2026)
• Not previously been bankrupt or entered a debt agreement in the last 10 years

What it covers:

• Unsecured debts — credit cards, personal loans, buy now pay later, phone plans
• Does NOT cover: home loans (secured), car loans where the car is security, child support, HECS/HELP debts, court-ordered fines, student debts

The Credit File Impact — Exactly What Gets Listed

Listing 1: National Personal Insolvency Index (NPII)

The NPII is a public register maintained by AFSA (Australian Financial Security Authority). Your name, date of birth, and address at the time of the debt agreement are listed permanently on the NPII. This is a public record searchable by anyone — lenders, landlords, employers.

This listing is permanent — it does not expire.

Listing 2: Credit File Listing (All Three Bureaus)

Your debt agreement is listed on your Equifax, Experian, and Illion credit files. The retention period is the longer of: 5 years from the date you entered the agreement, or 2 years after the agreement completes. For professional assistance, see our credit repair after debt agreement service.

Example: Agreement entered January 2024, completing January 2027 (3-year term). 5 years from entry = January 2029. 2 years after completion = January 2029. Drops off January 2029.

Example 2: Agreement entered January 2024, completing January 2029 (5-year term). 5 years from entry = January 2029. 2 years after completion = January 2031. Drops off January 2031.

The longer the agreement term, the longer the credit file listing.

Listing 3: Individual Defaults May Remain Separately

Defaults that were listed by individual creditors before the debt agreement was formalised remain on your credit file with their own 5-year retention periods — separately from the debt agreement listing itself. This is a commonly misunderstood compounding effect.

Score Impact Over Time

What You Cannot Do During a Debt Agreement

During an active debt agreement:

• Cannot apply for most forms of credit above small amounts
• Cannot be a company director without court approval
• Cannot leave Australia without AFSA trustee approval (in some arrangements)
• Cannot take on new debts not disclosed in the agreement

These restrictions end when the agreement completes.

Rebuilding Credit After a Debt Agreement — The Strategy

Phase 1 — During the Agreement (Years 0–3/5): Focus on the agreement payments. No missed payments — this extends the record and creates new CCR positive entries. If any incorrect credit entries exist on your file (from before the agreement), have them assessed for dispute. Removing old defaults that exist alongside the agreement listing won't eliminate the agreement itself, but can accelerate score recovery.

Phase 2 — After the Agreement Completes: Review your credit file immediately. Confirm the debt agreement listing is removed if the retention period has passed. Check all pre-agreement defaults have expired on their own 5-year timelines. Any entries still showing that should have expired — dispute for removal.

Phase 3 — Rebuilding With New Credit: Start with low-risk products: secured credit card or basic credit card with small limit, pay in full monthly. Over 12–24 months of clean repayment history, score builds progressively.

Case Study: Michelle, Adelaide — Rebuilt to 621 Two Years After Debt Agreement

Michelle, 49, a nurse from Morphett Vale, entered a Part IX Debt Agreement in 2020 with four unsecured creditors totalling $58,000. She completed the agreement in 2023 (3-year term). In 2025, two years after completion, she came to Australian Credit Solutions.

Her credit file still showed the debt agreement listing (retained until January 2025 under the 2-year post-completion rule — but her file check was in February 2025 and it hadn't yet been removed). Two pre-agreement defaults were also still showing — one had expired (5 years had passed) and was still on her file due to a bureau administration lag; the other was within the 5-year window.

Australian Credit Solutions lodged: (1) a bureau correction request for the expired default showing incorrectly, and (2) a review of the one remaining default for any procedural errors in its original listing (none found — it was correctly listed and had to run its course).

The expired default was removed within 10 days. The debt agreement listing was removed by the bureau within 8 days of our formal request (it was in breach of the retention period). Michelle's score improved from 498 to 621 in 30 days — purely through removal of entries that should have already expired.

Michelle paid nothing until we succeeded.

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Frequently Asked Questions

How long does a Part IX Debt Agreement stay on your credit file in Australia? A Part IX Debt Agreement stays on your credit file for the longer of: 5 years from the date you entered the agreement, or 2 years after the agreement completes. For a 3-year agreement, the listing expires approximately 5 years from the start date. For a 5-year agreement, it expires 7 years from the start date (2 years after completion). The NPII (National Personal Insolvency Index) listing is permanent.

Does a debt agreement destroy your credit score in Australia? A Part IX Debt Agreement causes significant credit score damage — typically 100–200+ points drop upon entry, on top of any defaults already on your file. Score recovery typically begins 12–24 months before the agreement and listing expire, and rebuilds gradually with clean repayment behaviour after that. For more detail, see our guide on does paying off debt improve your credit score? (australia).

Can I get a home loan after a debt agreement in Australia? Qualifying for a standard home loan during or immediately after a debt agreement is very difficult. Most major banks will not lend to applicants with an active debt agreement or within 2 years of completing one. After the agreement listing expires and 2+ years of clean credit history, specialist lenders (Pepper Money, Liberty Financial) may consider applications. Standard bank lending typically requires 3–5 years of clean history post-agreement.

What's the difference between a Part IX Debt Agreement and bankruptcy in Australia? Both are forms of personal insolvency under the Bankruptcy Act 1966. Key differences: bankruptcy typically provides faster debt relief (automatically discharged after 3 years) but with more severe restrictions (trustees can sell assets, income contributions required). Debt agreements allow you to keep assets and maintain income but require creditor approval and have income/debt/asset thresholds. Both impact credit files significantly — bankruptcy for 5 years from discharge; debt agreements as described above.

Can incorrect entries during a debt agreement be removed? Yes — entries that were incorrectly listed before or during the debt agreement period can still be disputed under the Privacy Act 1988, even if you're in an active debt agreement. The debt agreement listing itself cannot be removed before its retention period expires (unless it was entered incorrectly), but co-existing defaults with their own procedural errors can be assessed and removed separately.

Should I enter a Part IX Debt Agreement to help my credit file? A debt agreement does not help your credit file — it significantly damages it, typically for 5–7 years. It may be appropriate as a debt management solution when no other options exist, but should never be entered primarily for credit file purposes. Before entering any formal insolvency arrangement, seek independent financial counselling from the National Debt Helpline (1800 007 007) and independent legal advice.

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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice. This article does not constitute insolvency or bankruptcy advice — seek independent guidance before entering any insolvency arrangement.

Related reading: How to recover credit score after bankruptcy → | Rebuild credit after debt agreement → | Financial hardship & credit file →