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  • #986509
    nev
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    Wondering if anyone knows about this

    I currently am on one but the story’s I was told when I underwent it seems to be no accurate
    Is there any advantage to paying it off early
    How long is the black mark on my credit file (been told life, until paid out,7 years??)
    Solicitor recently told me I wasn’t Bankrupt just on an agreement
    If I was to be asked while applying for say a loan if I have ever been bankrupt I would answer no but someone else told me only after the agreement was paid out
    I’m a bit confused??

    #1158185
    nighttax
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    nev, post: 182367 wrote:
    Wondering if anyone knows about this

    I currently am on one but the story’s I was told when I underwent it seems to be no accurate
    Is there any advantage to paying it off early
    How long is the black mark on my credit file (been told life, until paid out,7 years??)
    Solicitor recently told me I wasn’t Bankrupt just on an agreement
    If I was to be asked while applying for say a loan if I have ever been bankrupt I would answer no but someone else told me only after the agreement was paid out
    I’m a bit confused??

    Hello Nev

    Surprised no-one else has answered you. But here is the run down. The fact that you entered the debt agreement facility should be on your public record for 7 years. If you pay it off early then it will look better to any new prospective financier than if you don’t. Either way you will probably be asked to explain to the new financier why the agreement was necessary. You are not officially bankrupt so you can honestly answer No to the have you ever been Bankrupt question unless you have been another time. For a long time it was illegal (discriminatory) to ask this question but it is popping up more and more on finance applications. need some input from some of our legal members on that point.

    Regards
    Evan

    #1158186
    Recovery Russ
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    Hi Nev,

    I’m not a lawyer but,

    The agreement will stay on your credit file for 7 years no matter what you do from here.

    With regards to disclosing the agreement on loan applications, it depends on the wording of their question. If they ask is you have been bankrupt the answer is no. But many lenders will pose the question in a more vague way that may include your Part 9 while it is still current.

    If you are running a business with a trading name the debt agreement must be disclosed to all people dealing with the business. Once you have paid out the agreement you will no longer need to disclose this. Also if you want to become a member or a trade association generally they will not accept you while under a part 9 or 10.

    So if you are going into business there are benefits of paying it out, if not I guess there is still the satisfaction of having the agreement sorted.

    #1158187
    LucasArthur
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    Hi Nev

    Not that i am an expert, although in the situation of applying for a loan whether you declare the debt / bankruptcy etc will make no difference as the bank, when performing their due diligence, will see this mark on your credit file and pretty much make it near impossible to get a loan.

    Not being negative, but banks do not look favourably AT ALL with anyone that has a debt issue.. There are some circumstances that are explainable and sometimes banks will overlook it depending on the scenario, such as:

    Scenario 1: you have a debt with a phone company for a hundred dollars which was one unpaid bill that you didnt know about.. you clear it, show them the receipt, its marked paid on the credit file and you declare it.. and you are applying for say a home loan with 20% deposit etc so it is a fairly solid lend and this is just an oversight, most banks will be a little compassionate in this circumstance..

    however, if you have the below:
    scenario 2: you own a few hundred dollars on an electricity bill that you did a runner on and you are now wanting to get an overdraft of say $10k with no home or assets, this debt on your credit file (be it paid or not) will be looked at unfavourably… IMHO

    Its all based on circumstances, scenarios, debt vs equity and the likes..

    But when it comes down to it.. banks see a default of any sort as ‘character’ and its not a good character to have a bad debt.. they are trying to assess whether someone is a good risk or not for them to take a ‘gamble’ on so they always hedge the bet…

    Even if paid off, the credit report will still show the bad debt..

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
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