Rowe Bristol Lawyers has extensive experience in providing legal advice and representation in respect of all aspects of bankruptcy matters, including:
- advising and acting for creditors who wish to use the bankruptcy process as a method of enforcing a debt owing to them;
- preparing and issuing bankruptcy notices and Creditor’s Petitions on behalf of creditors seeking orders to declare a debtor bankrupt;
- advising and acting for debtors who have been or are likely to be served with a bankruptcy notice and/or Creditors Petition; and
- making an application to set aside or otherwise discharge a person’s bankruptcy.
If you require legal advice in respect of bankruptcy, please contact us to arrange a meeting so that we may consider and advise you on your specific circumstances.
The above information is provided as general information only and should not be relied upon as legal advice. The accuracy of this information may have changed from the date when it was published.
Options to avoid bankruptcy
Because of the negative social and financial consequences that are associated with being declined bankrupt it is usually in the interests of a debtor to explore what options he or she may have to reduce/restructure the relevant debts and in an attempt to avoid bankruptcy.
The main options available to a person whose creditors are seeking to declare him or her bankrupt are to:
- negotiate a repayment arrangement with the creditors. Such an agreement can be made either informally via correspondence or formally by way of a deed;
- enter into a Debt Agreement with their creditors; or
- enter into a Personal Insolvency Agreement with their creditors.
A Debt Agreement is a binding agreement between a debtor and his or her creditors pursuant to Part 9 of the Bankruptcy Act 1966 (Cth) which allows the debtor to discharge the debts with fewer obligations applying than if he or she were to be made bankrupt. The Debt Agreement process was designed to primarily assist people with relatively small debts, low incomes and the property. For that reason, a person is unable to apply for a Debt Agreement if their debts add up to more than $137,537.40* and divisible property adds up to more than the permitted threshold ($275,074.80*) or he or she earns more than a permitted annual salary ($103,153.05*).
*Figures as published by AFSA as at 1 January 2024, which amounts are subject to change.
A Personal Insolvency Agreement is a binding agreement between a debtor and their creditors pursuant to Part 10 of the Bankruptcy Act 1966 (Cth) which allows the debtor to discharge the debts with fewer obligations applying than if they were to be made bankrupt. Unlike a Debt Agreement, there are no income, debt or asset restrictions associated with applying for a Personal Insolvency Agreement. However, the application process is more complicated than that required to apply for a Debt Agreement.
It is important to note that applying to enter into either a Debt Agreement or Personal Insolvency Agreement is classed as an “act of bankruptcy”, which itself entitles a creditor to seek orders for the bankruptcy of the debtor. For that reason, legal advice should always be sought prior to making either application.
Rowe Bristol Lawyers has extensive experience in providing legal advice to clients who wish to avoid bankruptcy by entering into an arrangement with their creditors, including:
- negotiating a repayment arrangement with creditors;
- preparing deeds of acknowledgment of debt and deeds of forbearance that may provide sufficient comfort to creditors to avoid immediate enforcement proceedings;
- advising clients on the option which is most appropriate to their situation; and
- providing referrals to reputable insolvency practitioners and then liaising with those insolvency practitioners to implement (among other things) a Debt Agreement or Personal Insolvency Agreement.
If you require legal advice in respect of your options to avoid bankruptcy, please contact us to arrange a meeting so that we may consider and advise you on your specific circumstances.
The above information is provided as general information only and should not be relied upon as legal advice. The accuracy of this information may have changed from the date when it was published.