Similar to a debt agreement, a Personal Insolvency Agreement consolidates all of your debts into a single package. Personal Insolvency Agreements have no upper limits on income, debts, or assets, making them ideal for high-income earners.
Under a Personal Insolvency Agreement, any interest on the debt is frozen and the amount you repay is based on what you can afford. Creditors can’t contact you or take any legal action against you once the agreement is in place.
If you don’t meet the criteria for a debt agreement and you don’t want to consider bankruptcy, then a Personal Insolvency Agreement may suit you.
There are four steps:
Once the agreement is drawn up, a meeting of creditors is called, where relevant parties are invited to vote on the agreement. The terms of the insolvency agreement become legally binding when a majority of creditors vote in favour of it.
Please note: Personal Insolvency Agreements are designed for individuals who do not meet the criteria for a debt agreement. This typically means you have debts exceeding $109,473.00, net income exceeding $109,473.00 per year, or assets exceeding $109,473.00.
If your debts, income and assets are less than the above figures, then you might want to consider a debt agreement or one of the other options listed on our debt solutions page.
NB: Trustees administer personal insolvency agreements.
Personal insolvency is just one option in a range of debt solutions. For an overview on the options available, look here. You must determine whether the information is appropriate in terms of your particular circumstances.
Want to talk about personal insolvency or other solutions? Talk to us, and we’ll talk you through your options. We’re experts in finding the right different debt solutions for people who are experiencing difficulty with their debts.
Correct at the time of uploading on 24/02/2017