Personal Insolvency Agreement
A personal insolvency agreement is an alternative to bankruptcy. It is a formal agreement between a debtor and creditors that outlines how outstanding debts will be satisfied.
The agreement can be formalised in a number of ways, however it would ordinarily offer creditors a greater and more timely return than what would otherwise be available in bankruptcy.
Most commonly this is achieved by a third party lump sum payment or a series of payments over time and/or the exclusion of related parties in receiving a distribution. The benefits of entering into such an arrangement include avoiding the restrictions imposed by bankruptcy.
If you have any queries about a personal insolvency agreement, how it will affect your situation and income and what your other options might be – please contact Dye & Co. Pty Ltd on 03 9818 8800
What is Part X?
Part X (pronounced Part 10) is the section of the bankruptcy act that permits the proposal of a debt satisfaction arrangement via a personal insolvency agreement.
For a personal insolvency agreement to be successful, it requires both a greater than 75% majority in the value and a greater than 50% in number majority of the creditors who attend in person or by proxy, to vote in favour of the proposal.