Part 10

Part X of the Bankruptcy Act provides a process by which a debtor may make a proposal to their creditors for consideration and a formal vote. It is an alternative to bankruptcy. This agreement is called a Personal Insolvency Agreement

Once accepted, the proposal is binding on the debtor and all creditors in respect of their unsecured provable debts. It enables the debtor and creditors to come to a mutually agreed compromise in a relatively simple way without reference to the court.

Traditionally Part X administrations are administered by Registered Trustees. They may also be administered by the Official Trustee in Bankruptcy (through the Insolvency and Trustee Service Australia, `ITSA’).

There are Four steps in setting up an agreement.

These are:

• appointing a controlling trustee;
• calling a meeting of creditors;
• the controlling trustee's report; and
• holding the meeting

Your Part 10 Agreement will be reflected on your credit history.
 

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