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Part X – Personal Insolvency Agreements

Posted By  
11:53 AM

A Personal Insolvency Agreement is a formal agreement between a debtor (someone who owes money) and their creditors (someone who is owed money) that sets out how the debtor will satisfy the debts.

This document is executed by the debtor and his or her trustee (someone who has taken control of the debtor’s affairs) and will usually spell out exactly how money owed to creditors will be repaid over time and/or the sale of assets.

The agreement is a legally binding document which must be accepted by the majority of creditors. To determine whether you are eligible for a Part X (Part 10) agreement please contact our office for further information.

When we have explained in an easy to understand manner what your options are, if you wish to proceed with forming such an agreement we will attend to the preparation of a report which summarises your financial position to your creditors and the proposal you wish to make to them.

Whilst all creditors are not required to agree, creditors amounting to at least 75% of the dollar value of total debts must agree to your proposal.

If you decide that this is the course of action you wish to take, we will attend to the preparation of the statement of affairs and the completion of the relevant forms for the appointment of a trustee.

A meeting of creditors will then be conducted within 25 days where the creditors will vote as to the acceptance or rejection of your proposal.

If your proposal is accepted, those debtors which have proved their debt cannot take further legal action against you and the agreement shall remain in place until you have fulfilled your obligations as set out in the agreement.

Many legislative requirements must be complied with in order for a Part X agreement to be formed and we therefore recommend you call one of our experienced team members to assist you to determine whether or not you are eligible to propose that a Part X personal insolvency agreement, which can often be significantly shorter in duration than bankruptcy itself and also enables you to find relief from debt in a controlled manner.