When people find themselves in financially distressing situations, they may start exploring debt relief solutions and looking for bankruptcy alternatives.
While bankruptcy has a bad reputation, it is not as bad as it is made out to be. However, it is important to note that bankruptcy is not the only option for those needing debt help. Research your other options to ensure that you are choosing the best option specific to your personal situation.
What are some bankruptcy alternatives?
Debt Agreement and Personal Insolvency Agreement
Debt Agreements and Personal Insolvency Agreements are agreements that you enter into with your creditors. It is when you propose to pay an agreed sum over usually 3 to 5 years, to settle your debts. In order establish a Debt and Personal Insolvency Agreement, you need to ensure that you stipulate an amount that will not only keep your creditors happy, but one that you can realistically pay during the duration of the agreement. Failure to do so may potentially cause the termination of the agreement.
Both these bankruptcy alternatives function in similar ways. However, which one you are eligible to enter into depend on three factors:
1. Your income
2. Your debt levels
3. What assets you have
In order to establish one of these agreements, the first step is to speak to a professional debt consultant. They will be able to help determine whether these bankruptcy alternatives are viable solutions and if so, what percentage of your debts you will be able to realistically repay. If you are entering into a Debt Agreement, you will need to enlist the assistance of a Debt Agreement Administrator, and a Registered Trustee if you wish to propose a Personal Insolvency Agreement.
Australian Bankruptcy Services have both a Debt Agreement Administrator and a Registered Trustee onsite so we are able to offer help with bankruptcy, Debt Agreements and Personal Insolvency Agreements. If you would like to learn more about bankruptcy alternatives, then please contact us on 1800 462 767 for free expert advice.