Debt Recovery - Personal Insolvency Agreements

1. identify the debtor's property (whether or not already owned by the debtor when he or she executes the agreement) that is to be available to pay creditors' claims; and
2. specify how the property is to be dealt with; and
3. identify the debtor's income (whether or not already derived by the debtor when he or she executes the agreement) that is to be available to pay creditors' claims; and
4. specify how the income is to be dealt with; and
5. specify the extent (if any) to which the debtor is to be released from his or her provable debts; and
6. specify the conditions (if any) for the agreement to come into operation; and
7. specify the circumstances in which, or the events on which, the agreement terminates; and
8. specify the order in which proceeds of realising the property referred to in paragraph (a) are to be distributed among creditors; and
9. specify the order in which income referred to in paragraph (c) is to be distributed among creditors; and
10. specify whether or not the antecedent transactions provisions of this Act apply to the debtor; and
11. make provision for a person or persons to be trustee or trustees of the agreement; and
12. provide that the debtor will execute such instruments and generally do all such acts and things in relation to his or her property and income as is required by the agreement.

Provided that the debtor:

1. is personally present or ordinarily resident in Australia;
2. has a dwelling‑house or place of business in Australia;
3. is carrying on business in Australia, either personally or by means of an agent or manager; or
4. is a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;

The debtor may authorise a solicitor or registered trustee under section 188 of the Act to put forth a proposal acceptable to all the parties.

• Avoiding costly court proceedings;
• Avoiding publicity and stigma of being a bankrupt;
• Selection of controlling trustee;
• Minimising debtor’s exposure to criminal prosecution;
• Avoiding limitations placed on undischarged bankrupts.

• Debtor’s assets are under the control of the trustee;
• Avoiding costs of court proceedings meaning there will be more money for distribution;
• Possibly higher return than if debtor were declared bankrupt;
• If creditors rely on the debtor for the supply of goods or services, then both parties can continue to trade.