From my experience with clients that have been involved in a Part IX Debt Agreement, it may seem that the businesses who offer these agreements, sell the idea as a debt consolidation and the client who enters into these agreements may not completely understand the repercussions until it is too late.
It is only too clear about some of the more well-known Part IX Debt Agreement providers who advertise heavily in many types of media , may market these agreements as a debt consolidation.
This can cause many problems, as the client may have had better options than entering into a Part IX Debt Agreement, although they thought they were doing the right thing by their creditors.
You see, their creditors will only get a partial amount of their debt from the company providing the “debt consolidation”, whilst the client pays the amount off in “one easy payment” and may not understand that this will tarnish their credit file in a very similar way to a full bankruptcy.
Whilst the Part IX Debt Agreement is active, you won’t be able to get auto finance unless you were provided vehicle financing by one of those car yards that provide in-house finance for the sale of their own overpriced cars in their yard and prey on those with no other choice. You would be required to have your debt agreement finalised prior to applying to any main stream car loan provider.
(these are guidelines only and may be waived on a case by case basis)
- Part IX Debt Agreement finalised a minimum of 12 months prior to application
- Good banking conduct for a minimum of 6 months (no Direct Debits or negative balances on your bank statements)
- Must be in paid employment
- Good rental, mortgage or other loan references (if any)
- Stable residence (if you move around too much, they may seem you are hard to find)
- Sufficient surplus income after all expenses
- Suitable vehicle and vendor (sometimes private sales are not allowed and the age of the car is important)
In addition to the normal application requirements, the lender may require bank statements, pay slips or tax returns for proof of income, proof of address (which may be rent receipt, lease agreement or utility bill), loan or credit card statements, if any and proof of identification.
The lender will review your bank statements in detail to ensure you are conducting your personal finances in a way suitable to their criteria for approving you for car financing.
The offer may not be too favourable for your first car loan after a Part IX Debt Agreement is finalised, but it can be used as a stepping stone to improve your credit worthiness to give more options the next time you borrow money for car financing and also give you the ability to negotiate a fairer deal.