Our verdict Limited, case by case
The short answer
It's limited while the agreement is running, and case by case after it ends. A Part IX debt agreement is a formal insolvency arrangement, so most lenders are cautious while you're still paying it. Once it's completed, a property-secured loan can be considered on its merits, with the lender looking at equity, your conduct since and a clear explanation of what happened.
Key points
- A debt agreement usually lasts up to three years (five if you own your home, or in some other cases).
- It stays on your credit report for the later of five years from when it was made or two years after it ends.
- Borrowing during the agreement is difficult; after completion, property security opens doors.
- A personal insolvency agreement also stops you being a company director while it's in force.
What exactly does a debt agreement tell a lender?
A Part IX debt agreement is a legally binding arrangement between you and your creditors, set up under the Bankruptcy Act. AFSA describes it as a way to pay a percentage of your combined debt that you can afford over a period of time. To be eligible, you must be unable to pay your debts when they fall due, among other conditions.
So when a lender sees one, they read it as: this person reached a point where they couldn’t meet their debts, and they chose a formal way to deal with it. That’s a serious signal — but it’s also a responsible one. You didn’t walk away; you made an arrangement.
How long does it affect me?
| What | How long | Source |
|---|---|---|
| The agreement itself | Up to 3 years; up to 5 if you own your home, or in some other circumstances | AFSA |
| Credit report listing | Later of 5 years from when it was made, or 2 years after it ends | OAIC |
| Eligibility for another one | Not if you’ve had a debt agreement, bankruptcy or PIA in the last 10 years | AFSA |
The practical effect: the agreement is visible to lenders for several years, and the most difficult period for borrowing is while it’s still running.
Can I borrow during the agreement?
Usually not easily. Most lenders — especially unsecured ones — won’t take on new lending while you’re still paying creditors under a formal arrangement. Unsecured, cash-flow and line-of-credit options (typically $5,000 to $500,000) are sized on turnover and depend heavily on credit history, so they’re generally off the table until you’ve finished.
There can be exceptions for property-secured business loans ($20,000 to $5,000,000) where there’s substantial equity, a clear business purpose and a sensible plan to repay. These are considered case by case. Be prepared for a cautious lender and a lot of questions.
In a debt agreement, or just finished one? Tell us honestly where you are — enquiring doesn’t involve a credit check.
What helps after the agreement ends?
Completion changes things. Now you can show you followed through on a formal commitment.
- Your completion confirmation. Keep it and include it.
- Clean conduct since. No new defaults or late payments.
- Steady business trading. Bank statements showing a business that pays its way.
- Property equity. Your own, or a family member’s offered willingly (see using a partner’s property).
- A clear explanation. What caused the agreement, and what’s changed. Our guide on explaining your situation to a lender shows how to keep it short and factual.
Does a debt agreement stop me running a company?
A debt agreement and a personal insolvency agreement are different things. ASIC says people who are bankrupt or covered by a personal insolvency agreement can’t be company officeholders. If you’re considering structuring your business as a company, check your position with your adviser, and tell any lender exactly which arrangement you were in.
An illustrative example
Illustrative only — no real person is described.
A hairdresser entered a debt agreement in 2022 after a relationship breakdown left her with personal debts. She completed it in 2025, a few months early. Her salon, run as a sole trader, has traded steadily throughout. She now wants $45,000 to refurbish and add two chairs.
- Her credit report still shows the debt agreement, marked as completed.
- An unsecured lender declines because the listing is still current.
- She owns a small unit with equity. A property-secured loan is considered, with the lender noting the completion, her clean record since and three years of steady salon income.
How is this different from bankruptcy or a default?
A debt agreement sits between a default and bankruptcy in how lenders tend to view it — more serious than a single default, generally less than bankruptcy. Each has its own timeline and its own questions, so it’s worth reading the page that matches your history.
What’s the difference between a debt agreement and a default for a lender?
People often ask whether a debt agreement is “better” or “worse” than the defaults it replaced. From a lender’s point of view, it’s a different kind of signal.
| Default | Debt agreement | |
|---|---|---|
| What it shows | One debt went unpaid and was listed | A formal arrangement with all unsecured creditors |
| Credit report period | 5 years | Later of 5 years from when it was made, or 2 years after it ends |
| Public record | No | Appears on a public register for a time |
| Borrowing while active | Possible, case by case | Difficult |
| Borrowing after | Depends on age and status | Opens up after completion |
The debt agreement usually reflects a broader problem than a single default, but it also shows you dealt with it formally rather than letting debts pile up. After completion, many lenders see it as a closed chapter — especially with property security and clean conduct since.
If your history also includes court judgments or defaults, read those pages too, because lenders will look at the whole file together.
Let’s talk about where you’re up to
If you’re working through a debt agreement or have just completed one, you’ve already done the hard work of facing your debts. When the business needs funding, it deserves a proper look.
There’s no credit check just for enquiring, and we don’t pass your details to a string of lenders hoping for a match — a real person handles your file and calls you. Please tell us on the form whether the agreement is current or completed, and roughly when, so we can give you a genuinely useful answer from the first call. Enquire here.
Frequently asked questions
Can I get a business loan while my debt agreement is running?
It's difficult. You've formally told creditors you can't pay your debts in full, so most lenders will wait until the agreement is completed. There can be exceptions where strong property security and a clear purpose exist, but expect caution.
How long is a debt agreement on my credit report?
The OAIC says a debt agreement stays for the later of five years from when it was made, or two years from when it ends. After that it drops off your credit report.
Is a debt agreement the same as bankruptcy?
No. It's a different formal arrangement under the Bankruptcy Act, where you agree to pay creditors a percentage of what you owe over time. It's still an act of insolvency, and lenders treat it seriously.
What about a personal insolvency agreement (PIA)?
A PIA is a different, more flexible arrangement. ASIC notes that people covered by a PIA can't be company officeholders, which matters if your business is a company.
I finished my debt agreement early. Does that help?
Yes. Completing it, and especially completing it ahead of schedule, shows you followed through. Keep the completion certificate or confirmation and include it with your enquiry.