Part 10 Debt Consolidation
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.
- 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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