PERSONAL INSOLVENCY

Part IX Debt Agreements

As an alternative to bankruptcy, the Bankruptcy Act 1966 provides for debtors unable to pay their debts to propose a debt agreement arrangement with their creditors.

A debt agreement is administered by a registered debt agreement administrator and will usually provide for a greater return to creditors than what would be expected under bankruptcy.

Eligibility

A debt agreement can only be proposed by a debtor who has:

• Not been bankrupt, utilised a debt agreement or appointed a controlling trustee under Part X in the last 10 years
• After tax income and liabilities which are less than the prescribed amounts
• Unsecured debts of less than the prescribed amounts.

Please see the Insolvency and Trustee Service Australia (ITSA) website for annual prescribed amounts.

For further information please see the Insolvency and Trustee Service Australia (ITSA) website.