A debtor must choose a Controlling Trustee, either a lawyer or a bankrupt agent, and provide them with three documents: an informal debt contract is generally only suitable for people who have recently experienced a radical change in their circumstances, that it is unable to pay their debts. They could have lost their jobs, suffered an injury or fell out of a relationship. Financial advisors can also help you understand the impact of bankruptcy and debt contracts. PIAs do not have caps on earned income or debt levels. A Private Insolvency Agreement (PIA), also known as Part 10 or Part X, is a legally binding agreement between you and your creditors, in which you will agree on how you will settle your debts. In Australia, PIAs are regulated by bankruptcy law and supervised by a registered agent. A pia agreement (part 10) is only considered if a debt agreement with Part 9 is not appropriate because your assets and liabilities are too large. The provisions of Part X refer to the debtor who signs what is called Section 188 Authority and authorizes either a registered agent, a solicitor or the official agent (then called the supervisory agent) to convene a meeting of its creditors and take control of its assets. At the same time, the debtor must submit to the supervisory agent a proposal containing a draft PIA and a declaration on all assets and liabilities known to the debtor. A PIA is in the form of an act and must contain certain conditions, including, but not only the following: We then organize all documents and we take care of the day-to-day management during the duration of your debt contract. Part X of the 1966 Bankruptcy Act (“the law”) offers an alternative to bankruptcy by providing a debtor in financial difficulty with a formal but costly mechanism to secure a binding agreement with his creditors. The rules are individually adapted to the debtor`s particular financial situation.
The debtor is able to negotiate with creditors a transaction that is likely to pay less than 100 cents in dollars. Payments can be lump sum and/or staggered over a specified period of time and may include the sale of real estate as well as the contribution of regular payments. However, the personal insolvency contract does not affect any secured creditor (in terms of managing their security). An agent (who may be different from the supervisory agent, but who must be a registered agent or the Australian Financial Security Authority (AFSA) is responsible for managing the agreement.