Bankruptcy
3. Alternatives to Bankruptcy
Firm / Chambers:
Last updated: 22 Jun 2015
- Debt agreements and Personal Insolvency Agreements (PIAs) are both formal alternatives to bankruptcy for those with unmanageable debt.
- Both alternatives involve you entering into a formal arrangement with your creditors to discharge your debts within an agreed timeframe.
- Making a decision about which agreement is right for you is usually not difficult.
- You can only lodge a debt agreement proposal if you have unsecured debts, assets and an after-tax income all less than the set limits.
- If your finances are under the set limits you can choose either agreement however a debt agreement is generally preferred because it can be set up faster and at less cost.
- If your finances exceed the set amounts you are not eligible for a debt agreement and will only be able to consider a personal insolvency agreement.
- If you are in a relationship and you and your partner wish to settle your household debts with one agreement you will need to propose a joint personal insolvency agreement.
- Joint debt agreements on the other hand are not possible.
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