The Differences Between Bankruptcy and a Part IX Debt Agreement

Bankruptcy and debt agreement

What is a Debt Agreement?

A debt agreement is a formal and legally binding contract between you and your creditors, which while not formally being a bankruptcy, does fall within the auspices of the Bankruptcy Act 1996. Under such an agreement, your creditors agree to accept from you an agreed amount of money, which you are in a position to be able to afford, over an agreed period of time in settlement of your debts. Once the amount agreed has been paid in full, anything further you may have owed your creditors which was contained in the agreement is gone, with no legal recourse to pursue you.

How Does it Work?

In a part 9 debt agreement, you work with a debt agreement administrator to prepare a proposal to your creditors, making an offer to pay a certain sum of money to them, in full payment of your debts, over an agreed amount of time. It may be that your income leaves you in a position where repaying everything you owe is just not possible. Through the debt agreement, you may only offer to pay a certain percentage of the overall debt. Even a reduced amount may be attractive to creditors, especially if they may well actually receive less if they push you into a formal bankruptcy. If a majority of the creditors accept your proposal, an agreement is entered into, which is legally binding on all parties, with each receiving the same percentage of money repaid.

What Debts Can Be Included?

Not everything can be included in a debt agreement, and you can still be liable for these even after everything else has been paid. A debt against a property is considered a secured debt and the creditor may force a sale to recover some or all of the loan, with any shortfall then possibly becoming part of a debt agreement. With unsecured debts such as credit cards, utility bills, overdrafts or unpaid rent, a debt agreement is generally possible, while unpaid fines to a court and child support is not. Neither are any additional debts you may accrue after the debt agreement proposal has been received.

How Does Bankruptcy Work?

Bankruptcy is a legal process, which can release you from much of your accrued debt, whereby you are declared unable to pay your debts. You may enter it voluntarily through a debtor’s petition, or it may be forced upon you by a creditor. A trustee will be appointed to whom you must declare all of your assets and liabilities. The trustee will then be responsible for selling your assets, as permissible, to help repay some of your debt. You may be ordered to make compulsory additional payments if your income is above a certain level. Bankruptcy generally lasts for three years and a day, during which time you may be ineligible for certain types of employment, or be subjected to restrictions on obtaining any credit or even travel.

It is important to understand that entering into either bankruptcy or a Part 9 debt agreement is a very serious move and before deciding about either, it is essential to receive expert advice on your situation and listen to your options to deal permanently with that unmanageable debt.

Tips To Save Money and Get Out of Debt Fast

Save Money and Get Out of Debt Fast

Debt is a way of life for a majority of people at one point in their life or another. The main debts that many people owe are student loans, credit card bills, and mortgages. All of these debts differ immensely when it comes to interest rates and terms to pay the balance off. Saving money on a monthly basis will allow you to work your way out of debt rather than living paycheck to paycheck. Simple tweaks in habits can make a huge difference as it is a misconception that you will have to change everything just to save a little extra money a month.

Skip Going Out To Eat

The amount of money that is wasted by going out to eat is immense. The same meal could cost 10 percent of what you are paying to have someone else prepare it for you. Reducing the amount of meals eaten out can make a huge impact on the budget especially for a large family. Planning meals has to be done so there is not a scramble trying to figure out what is going to be for dinner. You can save some money on groceries by using a Sams Club coupon code from Groupon. The quality of the food that you buy can go up as well as you will be saving money from not dining out. If you are going to go out to eat make sure it is during a special like that of the popular Taco Tuesday that is a staple of nearly every establishment that serves tacos.

Quit Smoking and Drinking

The amount of money that is spent on alcohol and cigarettes is astounding. For a heavy smoker who smokes a pack a day this can come out to $50 a week and $100 if you live in a place like New York City where taxes on tobacco are high. Depending on the type of alcohol that you drink this can add up quite quickly. A 12 pack of craft beer can cost up to $20 so even having two beers a night can end up costing you close to $100 a month. The fact that many people make bad financial decisions while drinking makes giving up drinking the best idea if you want to save money.

Look Into Cheaper Options For Insurance

There seems to be insurance for everything from the home to your vehicles. Most people do not shop around for insurance as they simply use the company that their parents had used. The fact is that independent insurance agents can sell policies from a variety of insurance companies. Agents that work directly with an insurance company can only offer you packages from one company thus not guaranteeing the best protection for the best price. The only drawback is that many companies offer customer loyalty discounts which can drop prices lower than an independent agent could sell it for.

Get Rid of Your Cable

The need for cable is waning as there are a plethora of streaming services that cost a fraction of what a basic cable bill comes out to. Many people have their services bundled so this might be cause for an increase in telephone or internet charges. This increase usually is only a few dollars and you can be saving over $100 a month depending on what quality of cable you have. One issue that arises is that of watching sports but with live streams this no longer is an issue. Most NFL games can be found online and put on your TV by using an HDMI cord. Streaming services like Hulu have games available to watch on a weekly basis.

Getting out of debt is as simple as saving as much money as possible and putting it towards the unpaid balances. Do not accrue any types of late fees and work on refinancing a debt for a lower interest rate if this is an option. Take your debt seriously and be proactive about getting rid of it!

De-Stressing Your Debt Problem

Debt is an understandably big concern for many people. A survey by the American psychological association found that in the US, 73% are worried about money; 64% seriously.


You shouldn’t need to worry; it is, after all, just money. When debt seems to be collapsing on top of you, there are plenty of options for rectifying it.

Relief Solutions

A common solution to your debt issues is to enter into a debt relief solution. The Federal Trade Commission recommend them. Their advice is worthwhile, however; preach caution, and use reputable third-party services. AAA Credit Guide ( emphasize that there are, indeed, legal frameworks to protect consumers, and that after an initial storm you will be able to relax into regular payments and a solid schedule.

Debt Settlement

If you’re able to find a reputable company with real results, debt settlement programs can potentially be a good option. The issue here is you are likely to end up paying a retainer and spending money that could have paid down your debt; the upshot is, if successful, you’ll be able to reduce your debt massively. Laws are now in force to reinforce your rights; companies can no longer charge you a fee until they’ve negotiated said reduction with your creditors.

Self Management

Likely the toughest, but most gratifying manner of debt reduction is self-administering your problems. Two key methods have become popularized in this arena – the snowball, where you work off the smallest debts first to give a psychological ‘win’; and the avalanche, where the highest interest debts go first, which is the most logical and will save you money in the long term.

Research from Boston School of Business has shown it’s most effective to snowball, though this is no way a hard and fast rule. Work out which method is best for you – of course, if you’re the logical type and can keep the big payments rolling, that’s best.

Minimum Payments

Whatever your chosen method, try and keep off the minimum payments. Notorious for keeping people in the debt trap, it’s estimated that the average American credit card holder, with $15,000 of debt, will take 11 years to pay off their balance.

Whatever the method you choose, debt management need not be bleak. There are plenty of options out there besides those above, and a little digging will get you far. And even if you can’t swallow handing your problems to a third-party, science shows you can even do it yourself.

Dealing With Debt? Don’t Worry!

dealing with debt

Debt is a scary word for a lot of people. It conjures to mind images of stacks of bills and men coming to repossess your furniture. And yes, there are situations in which those things can happen, but the truth is that debt is just a natural part of everyday life for the vast majority of adults. If you want to buy a house or a car, then there’s a pretty good chance that you’re going to have to take out a loan in order to pay for them. No matter which way you look at it, those things are debt, and most people live their lives just fine with that. The difficulty arises when you start to lose control of that debt. Here are just a few things that you can do to avoid letting your debt spiral out of your control.


Check your repayment terms

When you’re looking at taking out any kind of loan, it’s not just the amount that you’re borrowing that should be a concern. You should make sure to pay close attention to the repayment terms as well. How long do you have to pay the loan back for? How high are the interest rates? These kinds of questions require you to do a bit more research but can save you a huge amount of hassle in the long run. Sites like can show you the best car loan deals on the market, and there are plenty of others that do the same for everything from homes to boats! Even if you feel as though you can afford the amount you’re taking out, make sure that you check the repayment terms so that you’re not left with a nasty surprise.


Be selective



When you first take out a loan or buy something on your credit card, it can be incredibly tempting to start feeling as though you’re able to buy pretty much anything in that way. Of course, doing that is a pretty steep slope that leads to a whole lot of trouble. The best thing that you can do is to be selective about how you’re using things like your credit card. It’s best left for things that you absolutely need like a car or a roof over your head. If something’s a luxury that you can’t afford to buy outright, you don’t need to get into debt for it.


Keep a budget

When you’re dealing with paying off debts, it can often seem pretty overwhelming. However, there’s one simple thing that you can do in order to make the whole process a lot easier. All you need to do is keep a clear budget of all of your income and outgoings. Once you’re able to do that, you can see clearly exactly what you’re paying and what you can actually afford. Not only does this allow you to better understand what you can afford, but it also lets you know that your debts are getting paid off regularly and on time.


Climbing Up And Over That Growing Mountain Of Debt

It’s something that happens to millions of people in their lifetime and can happen regardless of how safe you think you are now. All it takes is one or two emergencies and your finances could be in serious trouble. The life you’ve worked to build could be at risk. So, here’s the knowledge that will help you survive those dark times of debt and climb right back to the top.




Have the right measures in place


If you’re not currently in the thick of it right now, then now is the time to make sure your finances are as protected as they can be. You can get an impression of that by looking at your net worth. This measures how much you are currently worth, so you will always know if you could escape your current debt using your assets. Then pad that worth with things like emergency funds that are aimed solely at protecting the future of your money.


Talk about it


It’s easy to simply try and sweep it under the rug, but the sooner you address the problem, the easier it will be to tackle. Creditors, for instance, might be able to offer a much more manageable deal if you get to them before they pass it to collection agencies. Similarly, your family can help you by raising funds and being a lot more sensible with their spending. Besides, trying to deal with it all yourself is going to put a lot more stress on you than it should.


Use the right help at the right time


Depending on your circumstances and the timing, there are also those that can help you deal with financial hardship in some very specific ways. For instance, these are groups that can help you make rent if you’re temporarily unable to. Then there are those who assist homeowners at risk by helping to stop foreclosure. Often, you might have a right to more help and more breathing room from creditors than you currently think. Getting in touch with the right people can help you learn those rights and what options you have to deal with your current circumstances.


Free every penny you can


While you’re getting help or restructuring your debt, you should be taking a very hard look at just how you spend money. This means creating a budget. Start cutting down on the unnecessary expenses like luxury subscriptions and treats for yourself. You can even cut down the necessary expenses by opening negotiations with service providers or cutting down on things like extras in your internet package. When you’ve freed up as much money as you can on your budget, you need to start taking it out of each paycheck as soon as you get it. That stops you from accidentally cutting into it with expenses.


To have the best chances of getting through the spiral that is debt, you need to think about the before, during, and after. Prepare the right emergency funds. Know who to get in contact with in the event of that crisis. Then make sure you protect yourself in future from the risks that got you in trouble in the first place.


Common Financial Issues And How To Resolve Them

financial issues


Even if you’re the most careful person when it comes to money, even if you save up for a rainy day and watch your finances, even if you mean well, you can face financial issues. As much as we’d all like to sail through our financial lives problem-free, it’s not always that easy. And, one of the worst ways that we can find ourselves faced with them is when we least expect to.


If you want to ensure that you face a financial problem free life, you might want to start thinking ahead. We can all face difficulties, even if we think we’re in the clear. Whether you know you need help, or you’d just like to get ahead, a few tips might be all it takes to save yourself from a financially bleak future.




When you’re in financial difficulty, you can often feel like you’ve got nowhere to turn. However, you can get out of debt quickly and quietly. When you owe money, and the amounts pile up, you can often feel like you have nowhere to turn. Pretending like everything’s okay can make matters worse – especially if you ignore the debts you’re racking up. So, instead, be proactive.


Work with the snowballing technique to pay off your debts with the biggest interest rate first and gradually get rid of them all. You might even find that cutting up your cards can help – that way; you won’t be able to get yourself into any more debt. Selling your stuff to raise extra cash is another idea that can help you to get debt free a lot quicker and so is consolidating what you own with one low rate loan.


Unexpected Costs


If you’re not in debt, you might be wondering what tips you could possibly need. But, just because you’re financial worry-free right now, doesn’t mean you always will be. Whether you’re doing well with your personal finances, your business finances, or both, you can still be hit with unexpected costs that can hurt, shock and stop you in your tracks.


Say you get sick and your medical bills are astronomical or your insurance goes up, or maybe you’ve been messed about by a person or business that was meant to be doing a job to help you. When you’re left with a whole bunch of bills or the inability to earn more money, you might need a fallback option. Whether you head to your savings account or work on making Professional negligence claims, you need to know now how you’re going to act if you should ever need to.


Cash Flow Concerns


And then there’s always a risk that you’re going to be caught short when it comes to cash flow. You don’t have to be in business to suffer from cash flow issues; it can happen in your personal life too. When you have too many outgoings for your income to handle, which can happen for many reasons, you might be stuck. But, as long as you know that you can edit down your outgoings if you have to, or know how you can make an additional income if need be, you should be ready for whatever the financial world throws at you.


The Way Out Of The Woods When It Looks Like You Have No Options

It doesn’t matter how you got here, but ‘here’ isn’t a nice place to be. A lot of people find that unfortunate moment when debt has grown too big to deal with as you are. It might be that you’ve lost a job or you’ve had some hard-hitting expenses. Some people simply lose track of their finances. But even when you don’t have a huge net worth and a lot of income to play with, there are ways you can get yourself in a better position.





The sooner you call up your creditors, the better. We know you won’t like the idea of talking to them. But the truth is that if you’re suffering serious financial hardship, many of them will be willing to look over the current deal and make it more manageable. It’s important to do this soon, however. Creditors are usually a lot easier to deal with than the collections companies they might get involved if they hear nothing from you for months.


Prioritize and strategize


Whatever money you have coming in has to be planned to the penny. Just as you budget when tackling big financial commitments, you have to do the same when tackling big financial problems. Set aside the money you need for rent, utilities, the car, and groceries. Then use the majority of the rest to tackle debt. But don’t spread it evenly. Tackle the debt that’s the most urgent or that with the largest interest rate. If you have a small debt that can be tackled in a matter of weeks or a month, do it to feel the momentum. But don’t get caught going for the smaller ones first while the big interest debts keep piling and piling.


Shuffle the debt


If you’re in debt, it’s likely your credit score is starting to go down. However, even if it’s at the point where a bank wouldn’t look at you too favorably, there are options. Moving debt by exploring options like no credit check personal loans might increase the amount you have to pay. However, if that means changing a two-month deadline to a six-month deadline, the value of that option is easy to see. Just make sure you check the interest and ensure it fits you current budgeting abilities.


Ask for help


A lot of people don’t like this step, but it’s one that can really save a life. If you can’t manage your rent alongside your debt payments, then it’s worth looking into organizations that might be able to lend a hand. Talk to your landlord about your difficulties first and even consider finding a roommate. But if that fails, organizations like the Salvation Army and Modest Needs can help give you the boost you need to get back on your feet.


Getting out of financial trouble when you have little to offer can knock your confidence, but things will get better when you pull yourself back out. Take the time to rebuild, starting with measures like an emergency fund that can help you avoid this kind of stress next time.

Debt Is A Trap, Don’t Fall Into It

3D Shackled Debt

One of the biggest fears that you’ll face in your adult life is of debt. Forget about losing your job or having a failed marriage. This is the terror that keeps most people up at night. They worry about money. Am I spending too much of it? Will we get through the month on the amount that we have left in the bank. You might be surprised by just how many people deal with stress every day due to trouble with money. Even those who you might think have more than enough panic about their finances. That’s because they’re scared of falling into the debt trap. When you think about it, that’s exactly what debt is. A trap that you won’t be able to escape. It’s like falling into a deep hole with no way out. You can try and climb, but it will be a near endless struggle. That’s why you want to avoid that trap altogether.


You might think that it’s easy to avoid the debt trap. Only people who don’t know how to deal with their finances fall into it, right? Wrong, there are plenty of people right now who thought they would never be in debt but are struggling with money issues. Lots of circumstances can push you into a situation where you could be facing debt. On this post we’re going to look at some of the main causes of debt, and how to deal with them, so you don’t fall into it yourself.


Money Pits And Bad Investments


House and keys


One of the easiest ways to fall into debt is by taking on a bad investment decision. You might have been quite well off with a good amount of money in your accounts. But as soon as you make a bad financial decision like this, you’ll find your accounts quickly drain. The money you once had is gone, taken by that investment that you have to pay off. Let’s look at an example of this to better understand the risk.


You might have heard that investing in property is a great idea. It’s one way to keep your money safe and secure. As well as that, you might have heard you can double your investment in a matter of months. While this might be true, most people do this either by flipping the property or leasing it out. Both have huge hurdles that you will need to overcome to find success. We’re going to focus on property flipping.


The main idea behind property flipping is to find a fixer upper and fix it up. For a property like this to be a strong financial investment it needs to meet two goals. It needs to be cheap on the market, and it needs to be easy to fix. You should not have to spend a fortune on repairs and renovation. By doing this, you’ll probably find yourself taking out bigger loans to pay for it. Eventually, you’ll bleed your own funds try on an investment that wasn’t worth it.


That’s why before you make this type of investment you should be careful. You need to make sure that it’s a solid purchase. If you’re investing in property, always check that you have more in funds than you need. Think about the costs of renovation. You don’t want to be in a position where you need to borrow a lot of money to get through it.


Of course, property investment isn’t the only money pit that you might face. It’s entirely possible that you make a bad investment on the stock market. You might buy a lot of stock in what you think is a sure thing. But that stock quickly loses value before you can sell it off. At that point, you have lost all the money that you put into it.


To find out what is a good and bad investment, it’s best to use a broker. Most people make the mistake of thinking that investing is easy and they can do it without any advice or expertise. This just isn’t the case. In many situations, if you don’t know anything about investments you are going to end up losing money. That’s a fact and it’s a huge cause of debt in the modern industry.


Loan Misunderstandings And Improper Use


Education Personal Loans


It’s true to say that many people fall into debt because they don’t understand the terms and conditions of a loan. In some cases, they just don’t understand that they’re even taking out a loan. The first thing you need to know about a loan is that you are expected to pay it back as soon as you can. That might sound like common sense. But it isn’t. This is where most people get the wrong idea.


A good example of this is the use of credit cards and credit in general. When a large number of people start living off credit, the economy can end up in dire straits as well as their personal financial situation. It’s understandable why people choose to live on credit. If you see people living a better quality of life you’ll think why can’t I have that? Suddenly you reach into your pocket and find that little card. A card that will allow you to buy anything you like with no consequences. Ah but there are consequences because eventually they will come to collect. If you can’t afford to pay, you’re in debt. They’ll take everything away until you’ve paid back what you owe.


Don’t forget, unless you have an interest free credit card, you’ll be paying interest as well. That means you’ll probably owe a lot more than what you borrowed. If you can’t afford to pay back what you borrow with interest, don’t borrow it in the first place.


As well as this, you need to be aware of short term loans. Short term loans are not intended to be used to borrow vast amounts of money. Rather, online payday loans are for people who need a little cash to tide them over until the end of the month. If you’re doing this, you’ll easily be able to pay the money that you owe back. However, if you’re taking out a large amount you’ll struggle due to the high interest.


Despite this, it’s still not always a bad idea to borrow money. On occasion, you can borrow money to ease off your debts. If you owe money from one source, and you can borrow more from another with a lower interest rate it makes sense to make the switch.


Redundancy And Poor Savings




Perhaps the greatest cause of debt is redundancy. If you’re made redundant, you’re going to struggle to get by. Typically, you’ll get a pay package designed to hold you over until you find another job. But this isn’t always enough, especially when you’re trying to stay afloat in a competitive economy. In this situation, there aren’t enough jobs to go around. That pay package that you thought you could rely on is going to run out, fast.


Perhaps the best way to deal with redundancy is to plan for it before it ever happens. You can do this by saving a lot more than you need. You should try to save a good portion of your paycheck each month. Ideally, you want to put away as much as you possibly can. Essentially, you need to plan for the worst and would definitely be a job loss. Aim to have enough in your account to keep you out of debt for six months. Again, this is the worst scenario. We imagine you’ll find a new job in at most two months. But by having enough money for six, you’re keeping all your bases covered.


If you are made redundant, you will have to take job seekers allowance. Job seekers allowance is not a loan. It’s something that the government will pay for as a benefit to keep you employed. However, they will only do this if you are continually looking for a new source of income. You must also accept any job offer that comes your way, within reason. Otherwise, they will stop paying this benefit.

As well as this, it’s a good idea to know how you can make other forms of payment during a period of redundancy. For instance, it is possible to make money online. By making money online, you’ll be able to pay off some of the bills before the build into debt. You might even be able to set it up as a temporary source of income.


Finally, you need to plan a budget. Planning a budget is the best way to stop yourself from going into debt. Rather than overspending, you’ll only be paying for the things that you need. You’ll keep your finances healthy and ensure you don’t owe more than you can afford. Planning a budget isn’t hard. You just need to sit down for a few hours, working out all your expenses. You’ll then be able to create a plan that you can follow.


These are the main ways you could fall into the debt trap. By knowing how to deal with these situations, you’ll be able to avoid it completely.


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Debt Can be Crippling: Don’t Let it Ruin You

We all face debt at one time or another and the trick is not to let it beat you. There are so many different things you might consider when trying to get out of debt. Have a look at these suggestions and make sure you use them as much as you can.


rid of credit card debt
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Stop Spending

It might sound obvious to say, but, if you want to deal with your debt issues you need to stop spending. This might prove more difficult than you would imagine though. You’ve got to try to curb your impulse to spend money as much as you can. This means you need to come up with ways of reducing your spending. Try to make sure you only buy essentials and things you badly need. If you can reduce your spending, you will have a lot more money freed up to put towards clearing your debts.


Cut Up Your Credit Cards

There’s a long-standing debate about whether or not you should have credit cards. There are a lot of reasons why you might want to go for credit cards. And they do provide plenty of advantages. However, if you are in debt credit cards can be a nightmare, and you need to get rid of yours. They provide you with the opportunity to spend money you don’t have and can’t afford. So, you need to be disciplined and cut up your cards to avoid using them as much as possible.


Sell Your Home

Let’s get real for a moment; owning a home is expensive. In fact, your property might be the biggest expense you’ll have to face in your life. That’s why selling your home is a great way of dealing with the issue of debt. If you can get in touch with home investors you should be able to facilitate a quick and easy sale. This is a great way to generate a lot of income very quickly and will help you work off your debt. Once you’ve sold, you can buy another place that is more affordable than your current home.


Arrange a Payment Plan

Keeping up with repayments of your debt is essential if you want to become debt-free. So, you need to do what you can to try to arrange an affordable repayment plan. Many companies will allow for repayment options that are affordable. This is because they help people to be able to make the payments each month. Speak to any of the companies you are in debt with, and try to arrange something that suits you both. You might even want to consider debt consolidation as one of the options.


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You need to understand the essentials involved in getting out of debt. It is perfectly possible to fight your debt while still living a regular life. You just have to know what is involved and figure out the best way of proceeding. Debt can be crippling, and it’s the sort of thing that can ruin you if you allow it to. So try to be decisive, and take action that will help you to get out of debt in a stress-free way.