We recommend submitting a Part X Debt Agreement. The relevant provisions for Personal Insolvency Agreements (PIA) can be found in Part X of the Bankruptcy Act 1966, which provide a process for a debtor to make a proposal to creditors in satisfaction of their debts. A PIA provides a mechanism for an individual to avoid going into bankruptcy.
A person wishing to commence a PIA must complete a number of documents including:
A Section 188 authority
A Statement of Affairs
A draft proposal for a PIA
A meeting is held within 25 business days after the execution of the 188 authority (or 30 days if signed in December). For the PIA to be accepted, a special resolution must be passed being greater than 75% in value and greater than 50% in number of the creditors voting on the resolution. If accepted by creditors, the individual will be required to execute a Personal Insolvency Agreement.
Benefits to an individual and the creditors with a PIA include:
The provisions provide flexibility in the terms of any offer by an individual to creditors. An individual can submit terms that suit his or her circumstances e.g. moratorium on debts, up-front contribution, instalments over time, funds from realisation of assets, etc
The process provides for the receipt of funds and distribution to creditors in an orderly manner
Creditors are prevented from taking further steps to recover debts owed whilst the proposal is being considered
Creditors generally receive a greater return and in a more timely manner compared to bankruptcy
The fees and outlays with a PIA may be lower than administering a bankruptcy
Brisbane Debt Solutions have many years of experience with personal insolvency and bankruptcy agreements. We are here to help you through bankruptcy.