Personal Insolvency Arrangements (Part X)

If you are struggling or behind in some payments then a Part X agreement may be what you’re looking for. Much alike a debt agreement, a Part X personal insolvency agreement is a way of organising an affordable, legally binding agreement with your creditors through a formal proposal.

It is important to remember that a Part X personal insolvency arrangement is not a loan.

Benefits
If accepted your agreement is legally binding on your creditors. As long as you keep up to date with your payments your creditors can take no action to recover the debt other then what is outlined in the terms of the agreement. Many people find this helpful when they stop receiving phone calls and letters from their creditors demanding payment.

A Part X personal insolvency agreement may have the ability to:

• Freeze payments and interest upon acceptance.
• Release you from your debt by paying less then the full amount that you owe.
• Put a hold on payments for extended periods of time and
• transfer assets or property such as cars, televisions etc. from your name releasing you from your debts.

A Part X personal insolvency agreement also allows you to pay back your debts over an extended period of time, this may allow the repayments to become affordable as you may have found it hard to keep up in the past.

Another benefit of a Part X personal insolvency agreement is that not all of your creditors have to agree, only the majority in number and 75% of the dollar amount of the creditors who decide to vote. However once accepted all of the creditors listed in your proposal are legally bound by your agreement (even those who didn’t vote).

Facts
Under a Part X, a proposal is made to repay your creditors. This proposal is then voted upon at a formal meeting held with your creditors. Once accepted all of your creditors are bound to the terms outlined within the agreement.

Part X Insolvency Agreements are usually administered by what is known as a Registered Trustee, however they can also be administered by what is known as an Official Trustee. A Registered Trustee is a person who is registered under the Bankruptcy Act who is qualified to act as a trustee, and looks after the property/estate etc. in arrangements such as these.

A Part X personal insolvency agreement is not the same as becoming bankrupt it is an alternative to bankruptcy, however some people consider a Part X personal insolvency agreement to be an “act of bankruptcy.”

Your personal Insolvency Arrangement under Part X and your Personal Insolvency Arrangement under Part X proposal are both registered on the National Personal Insolvency Index (NPII).

Some credit reporting agencies such as Veda Advantage may use this NPII to advise some creditors that you have submitted and/or are under a debt agreement.

Many people enter into a Part X personal insolvency agreement when they become aware of the impeding restrictions that bankruptcy has to offer.

More frequently asked questions or find out how we can help you with a personal insolvency arrangement.