Bankruptcy is often seen as the last resort for people in serious debt. This has been the case for decades and bankruptcy has always had some level of stigma attached to it within the Australian community. Bankruptcy can also have long term consequences and as such you need to carefully understand these consequences before you file for bankruptcy.

If you are considering bankruptcy we recommend that you firstly take the time to educate yourself about the bankruptcy laws in Australia. This site has all the information you will need to understand bankruptcy in Australia. We also recommend that you explore and carefully consider all options to see if you can avoid bankruptcy. At Australian Bankruptcy Services we specialise in all debt solutions, including solutions to avoid bankruptcy.

The most common solutions to avoid Bankruptcy in Australia is a Debt Agreement or a Personal Insolvency Agreement.

There are some similarities between the two solutions and both require formal agreement with your creditors. It is best practice to appoint an insolvency practitioner help you through this process to establish which solution you will qualify for. An insolvency practitioner is well trained and educated to negotiate an agreement with your creditors.

The process for each usually goes like this:

• Appoint a insolvency practitioner, who will review your debts and help you work out a household budget;
• Once the household budget has been established the insolvency professional will be able to work out an estimated return to creditors (ie what dividend your creditors will receive);
• The insolvency practitioner will then put together a proposal to be submitted to your creditors; and
• If the proposal is accepted, you will begin making the agreed payments directly to the insolvency practitioner who will be responsible for paying your creditors a dividend.

What is the difference between the bankruptcy alternative solutions

The difference between a Debt Agreement and a Personal Insolvency Agreement is largely determined by:

• Your debt level
• Your income
• Your assets

The Bankruptcy Act sets out thresholds and these thresholds will determine if you qualify for a Debt Agreement or a Personal Insolvency Agreement. If your debt level, income level and assets are below the thresholds then you may qualify for a Debt Agreement. If your debt level, income level and assets exceed the thresholds then you may qualify for a Personal Insolvency Agreement. The government update these thresholds every six months, therefore it is best that you call us to see which product you may qualify for.

All of our bankruptcy alternative solutions are based on individual circumstances and therefore it is best that you call us on 1800 462 767 or apply on line. We will usually get back to you with a tailored debt solution within 48 hours of receiving all of the necessary information.