The three primary options are debt agreements, Small Debt Arrangement (SDA) and Personal Insolvency Arrangements. 

Debt Agreements provides you with a release from your debts upon discharge when your debts, income and assets are relatively low. An agreement is presented and voted on by creditors that match your serviceability.

Personal Insolvency Arrangement avoids bankruptcy with a formal voluntary appointment whereby we work with you to propose an arrangement with your creditors, that is often very flexible and less onerous for you than bankruptcy. PIAs are also subject to rigorous assessment by a registered trustee.

Small Debt Arrangements are formal voluntary appointments designed to be a low-cost and efficient means to come to an affordable arrangement with your creditors, that fits your cash inflow.

Benefits of Alternatives

If you’re experiencing financial problems, or feel your debt is out of control, bankruptcy is not your only answer. There are benefits to opting for alternatives that might be better suited, and equally relieve you of your debt stress.

No Bankruptcy

No Bankruptcy

Bankruptcy can be a scary and stressful prospect when you’re facing financial issues. These alternatives work similarly without carrying the perceived burden of bankruptcy.

Creditor Cooperation

Creditor Cooperation

PIAs are a preferred solution for creditors due to the statutory agreement that provides a higher rate of return and more timely return.

Compatible to Complexity

Compatible to Complexity

With our service assistance, these alternatives are preferred for clearing up complicated and complex financial affairs that might otherwise seem impossible to process.

Greater Flexibility

Greater Flexibility

These alternatives provide greater flexibility in the negotiations with creditors and your own financial capabilities, designed for a positive outcome for all parties.

Frequently Asked Questions

If you meet the following criteria then you should consider Part IX over Part X and bankruptcy:

  • You haven’t been subject to a Part IX or Part X in the previous 10 years
  • Income is below the statutory threshold
  • Asset values are below the statutory threshold
  • Liabilities are below the statutory threshold.

Shaw Gidley can provide you advice on Part IX and refer you to a reputable Debt Administrator (DA).

It’s imperative that you get the right assessment regarding your suitability for an SDA. Your choice will be between an SDA or bankruptcy. Bankruptcy should always be considered as a viable option due to the freedom it provides.

It is not uncommon for an individual to place themselves under further financial distress by entering an SDA, so the advice has to be right the first time around.

Attempting a PIA is the right option when your circumstances don’t fit a Small Debt Arrangement (SDA) or bankruptcy. 

There are no thresholds to access the PIA legislation as it’s about your prevailing financial circumstances, that are usually more complex than those of an individual considering an SDA. More importantly, a PIA will result in a better outcome than bankruptcy for you and your creditors.

Some points to consider if you’re considering at a PIA:

  • Do your debts exceed the SDA threshold?
  • Are your asset interests exceeding the SDA threshold?
  • Does your income exceeds the SDA threshold?
  • Do you still have business interests, present or future?
  • Are you are looking to retain the family home?
  • Do you have access to “friendly” funds?
  • Do you have access to non-divisible assets of value?
  • Do you have good/continuing relationships with  your major creditors?

A PIA is a statutory agreement with your creditors and, whilst the Bankruptcy Act dictates that it must address certain statutory requirements, the structure and content of the proposal are very flexible. For example, your PIA can include:

  • Income contributions;
  • Third party contributions;
  • Divisible assets realisations;
  • Non-divisible asset realisations;
  • Unquantified benefits based upon future events;
  • Extended terms;
  • Lump sum contributions;
  • Creditor compromise;and
  • Profit share from future speculative opportunities