Part IX Debt Agreement Home Loan: Broker Checks

A debt agreement home loan depends on the agreement’s status, the client’s current finances and the lender’s treatment of that status. Some lenders consider Part IX agreements, while others exclude clients who are still in one. Completing an agreement changes the assessment, but it doesn’t establish that the client can afford a new mortgage.

Start with the formal status and its dates. Then reconcile today’s debts and payment conduct before comparing lenders on the same scenario.

Identify the Agreement and Its Status

Identify whether the client has proposed a Part IX debt agreement, is making payments under one or has completed it. The Australian Financial Security Authority (AFSA) describes a debt agreement as a formal option under the Bankruptcy Act 1966. The client makes agreed payments through an administrator to repay creditors.

AFSA’s debt agreement explanation distinguishes this process from a consolidation loan. Consolidation involves new borrowing to repay debts. A Part IX agreement is a formal insolvency arrangement and has consequences for future credit.

Use the status shown in the notices and register, with the matching dates. AFSA’s practice guidance describes the following events.

Stage or event	What to establish in the file
Proposal	A proposal accepted for processing is still awaiting the creditors’ outcome. It isn’t an agreement already made.
Active agreement	Creditors have accepted the proposal and obligations remain. Record the agreement date and current payment schedule.
Varied agreement	The terms have changed through an accepted variation. Keep the original terms and the accepted variation.
Completed agreement	All payments and obligations are complete. Retain confirmation after AFSA has verified completion.
Terminated agreement	The agreement has ended through termination. AFSA says it cannot then be recorded as completed.
Cancelled proposal	The Official Receiver has cancelled a proposal during voting. Keep the cancellation notice and reason.

If a document says “cancelled”, identify precisely what was cancelled. A cancelled proposal and a completed agreement establish different facts. Don’t replace the notice’s status with the client’s description that everything was “paid off”.

Establish the Timeline

Obtain the proposal, acceptance notice and administrator’s payment record. Add any variation, completion or termination notice. Match the client’s name, date of birth and agreement reference across the documents.

The National Personal Insolvency Index (NPII) is AFSA’s public insolvency record. Obtain the relevant record through AFSA’s authorised Bankruptcy Register Search and retain the search date. Its NPII field guide explains that an accepted agreement can have no date ended while its result shows “Accepted”.

Read the result alongside the dates. An ended record needs its reason, because the end date alone doesn’t show successful completion.

AFSA’s end-of-agreement guidance gives these removal points.

• For completion, the later of five years from making the agreement or the date its obligations are complete.
• For termination, the later of five years from making the agreement or two years from termination.

AFSA’s practice guidance specifies removal within one month of the applicable later date. Register removal doesn’t change the event’s history. Answer the lender’s application questions about past agreements accurately, even when the event no longer appears in a current search.

Keep bankruptcy assessment separate. The bankruptcy home loan guide addresses that different insolvency route. A Part IX completion notice doesn’t establish a bankruptcy discharge.

Test the Current Commitments

Reconcile the client’s current obligations against administrator records, credit reports and bank statements before calculating serviceability. Serviceability is the lender’s assessment of whether income covers existing commitments, living expenses and the proposed mortgage.

For an active agreement, match each scheduled payment to the administrator’s ledger and the outgoing bank transaction. Record arrears separately from future instalments. Use the accepted variation’s payment schedule when terms have changed.

Create a liability schedule with each creditor, balance, repayment and supporting document. Distinguish debts dealt with by the agreement from debts the client still pays separately. This avoids counting the same obligation twice or omitting one altogether.

AFSA’s debt coverage guidance explains why completion doesn’t remove every commitment.

• Most unsecured debts are covered, but some obligations can remain after completion.
• Debts incurred after AFSA receives the proposal can remain payable.
• Secured debts, such as a mortgage or secured car loan, retain the creditor’s right to recover the security if repayments fail.
• A creditor can still pursue the other person for a joint debt.

Obtain current statements for retained debts and each joint liability. Add ordinary expenses, including rent, childcare and insurance, from the client’s present circumstances. The loan serviceability guide explains how those commitments affect borrowing capacity.

Fictional Example: Completion and Deposit Evidence

Consider Mia, whose administrator confirms completion on 31 March 2026. Her former agreement payment was $600 a month. In October, she wants to buy a $500,000 property and presents $65,000 as her deposit funds.

Her statements show $50,000 in savings at completion, followed by six monthly transfers of $1,000. A further $9,000 credit brings the balance to $65,000. The arithmetic explains the balance, but the $9,000 still needs a source.

Ask for the transfer record and evidence of whether that credit is a gift, asset-sale proceeds or borrowing. If it’s a repayable family loan, record its terms and repayment obligation. Don’t count borrowed funds as evidence that Mia saved the full balance from income.

Mia also has a secured car loan with $410 monthly repayments. Her statements show one missed repayment in July, followed by a catch-up payment. Record the missed payment and its explanation even though her Part IX agreement is complete.

Assess any further credit events under the bad credit home loan checks.

Her deposit funds equal 13% of the proposed purchase price. That doesn’t establish enough cash for settlement, because purchase costs and any required reserve need a separate allowance. Nor does it prove that the chosen lender accepts her agreement history or deposit source.

Before shortlisting, reconcile Mia’s income and expenses with the car loan, the $9,000 credit and the payment history. Removing the former $600 instalment from current commitments requires completion evidence. It doesn’t remove the need to assess the commitments she still has.

Compare Lender Policy by Stage

Compare each lender using identical agreement dates, conduct, debts, income and deposit facts. Separate an active agreement from a completed one, and keep a terminated agreement under its recorded status.

Loan-to-value ratio (LVR) is the loan amount divided by the lender’s accepted property value. A lender’s general maximum LVR doesn’t establish the maximum available to a client with a Part IX agreement.

Two published examples show why the agreement stage changes the shortlist.

Lender and dated source	Active agreement	Completed agreement	Type of condition
Goulburn Murray Credit Union (GMCU), broker procedure Version 1.0, October 2025	Lists borrowers in a Part IX agreement as unacceptable	If finished within the last five years, requires an additional 10% deposit and evidence of the finished agreement on the credit report	Written exclusion for active agreements. Written conditions for recent completion.
Pepper Money, home loan FAQs as at October 2026 and Part IX article reviewed 6 October 2025	Says home loan options exist for borrowers currently under Part IX, subject to circumstances	Says it may consider a discharged agreement and assesses the client’s circumstances and obligations	Individual assessment, without a promise of approval.

GMCU’s broker procedure gives a deposit condition for recent completion, not a universal waiting period. Establish the product’s base deposit requirement before applying its additional 10% requirement. Don’t interpret that wording as a total deposit of 10%.

Pepper Money’s home loan FAQs support an active-agreement enquiry. Its Part IX article describes assessment of the original event, whether it continues and whether obligations have been met. A possibility of finalising an agreement requires a case-specific assessment and an agreed settlement process.

For a terminated agreement, submit the termination evidence and current creditor balances for assessment under that status. Completion conditions apply only when the file establishes completion. A referral to a credit assessor is a request for a decision, not a policy exception already granted.

You can use Bulma’s Policy Advisor to compare agreement-stage rules across 52+ lenders and retain the quoted policy in your file notes. Include the precise status in the question so an answer about completed agreements isn’t applied to an active one.

Assess the Specialist Route’s Cost and Exit

A specialist route still needs an affordable loan and sufficient funds for settlement. Compare the actual proposed product, including its LVR limit, rate and lender fees. Add legal costs and any risk fee to the cash required, or to the loan where the product permits it.

A lower maximum LVR requires a larger deposit. Capitalised fees increase the amount borrowed and can affect whether the application stays within that maximum. Calculate repayments at the offered rate and under the lender’s servicing assessment.

If a later refinance is part of the plan, record what must change before another lender fits. That can include a lower LVR, a longer period of satisfactory conduct or an eligible agreement stage. Include discharge and new-loan costs in that assessment.

Treat refinancing as a future application subject to future policy and the client’s finances. Don’t make today’s loan affordable only by assuming a cheaper refinance will be approved.

Build the Evidence File

Prepare one dated submission schedule that connects the agreement’s history to today’s financial position and the lender’s conditions. Give the assessor enough evidence to follow the timeline without reconstructing it from scattered statements.

File item	Evidence to retain	What the submission explains
Agreement status	Proposal and acceptance notice, with agreement reference	Which stage applies and when it began
Payment history	Administrator ledger and matching bank statements	Scheduled payments, actual payments and arrears
Changed terms	Accepted variation and revised schedule	Which obligations apply today
Agreement ending	Completion confirmation or termination notice	Exact ending status and date
Current debts	Creditor statements, balances and repayment terms	Retained debts, joint liabilities and any new borrowing
Credit entries	Current credit reports and dated NPII search where relevant	How reported entries match the agreement documents
Deposit and costs	Savings statements and evidence of gifts or other credits	Where the funds came from and cash available after purchase costs
Original event	Client’s explanation with supporting records	Cause of the financial difficulty and what has changed
Lender assessment	Policy version and written scenario response	Conditions applied to this specific application

Resolve discrepancies before relying on a servicing result. If a credit report shows an active agreement but completion evidence exists, retain both and document the correction request. A zero bank balance payable to the administrator alone doesn’t establish the recorded completion status.

Ask Questions That Produce a Usable Decision

Ask the lender’s credit team or business development manager (BDM) about the facts that decide this application. Put the scenario and supporting dates in the same request.

1. Does the lender assess this recorded status, including any variation or termination, under standard policy or only through referral?
2. Which date starts any required conduct or elapsed-time period, and what evidence establishes it?
3. What deposit and maximum LVR apply to this status, product and property?
4. Must an active agreement be completed before approval or settlement, and what evidence would establish that requirement is met?
5. How must retained or joint debts enter servicing, including any agreement arrears?
6. Which rate, fees and cash requirements apply to the proposed product?

Save the response with the responder’s name and role, the date and the exact scenario submitted. Record any conditions separately from an approval. If a fact changes, such as a new debt or a different deposit source, update the scenario before relying on that response.

The file is ready for submission when its status, liabilities and deposit evidence agree. The proposed loan must also meet the lender’s stated conditions. An unresolved status or unexplained credit needs a document or a written assessment decision before you treat the scenario as fitting policy.