Part IX Debt Agreements

What are Part IX Debt Agreements?

A Part IX Debt Agreement is a simple method for debtors to negotiate a binding compromise with their creditors. Debt agreements represent a low cost flexible alternative to bankruptcy.

It involves a person in debt proposing a deal with their creditors. The debt agreement proposal may be accepted or rejected by creditors. ITSA, handles the voting process. A proposal is accepted if a majority of creditors in value vote in favour of the deal. All creditors with provable debts are bound - even those who voted against the proposal.

Debt Agreements are negotiated compromises. Some examples of the kinds of deals put in place are:

• Payment of less than the full amount of all or any of the debtor's debts

• A moratorium on payment of debts
• A transfer of property from the debtor to one or more creditors in full or part payment
• Periodic payments of amounts out of the debtor's income to creditors either collectively or individually