Skip to Content

Personal Insolvency Options


Finding the Right Path to Financial Relief

Facing personal financial distress can be overwhelming, but there are structured solutions available to help individuals regain control and confidence over their financial lives. Personal insolvency options offer tailored, legal, and practical methods to tackle unmanageable debt while safeguarding your rights and assets as much as possible.

These solutions are designed to provide clarity and a sense of direction, offering a path toward financial stability. Below is an overview of the primary personal insolvency options available and how each can help you rebuild your future.

Each of the options below vary in their structure, eligibility requirements, and impact on your financial future. Understanding these options is crucial to selecting the best path for your situation.

Part IX Debt Agreements


A Debt Agreement is a legally binding arrangement between you and your creditors to repay your debts over time. It’s often referred to as a “Part IX agreement” under Australia’s Bankruptcy Act.

Key Features:

  • Suitable for individuals with relatively low levels of debt and income, with thresholds in place.
  • Allows you to negotiate reduced payments or a lump-sum settlement.
  • Creditors agree to accept the terms of the agreement, such as reduced repayments.
  • Avoids bankruptcy and its associated consequences.

Advantages:

  • Stops creditor harassment and legal action.
  • Provides a structured, manageable repayment plan.
  • Allows you to retain control over assets (in most cases).

Considerations:

  • Recorded on your credit file for up to 5 years, affecting your ability to obtain credit.
  • Not suitable for those with significant assets or high debt levels.

Part X Personal Insolvency Agreements


A Personal Insolvency Agreement (Part X agreement) is a formal agreement between you and your creditors to settle debts without declaring bankruptcy.

Key Features:

  • Administered by a trustee who negotiates with creditors on your behalf.
  • May involve selling assets, making lump-sum payments, or agreeing to a repayment plan.
  • Offers more flexibility than bankruptcy for high-income earners or those with significant assets.

Advantages:

  • Tailored solutions to manage debts without bankruptcy.
  • May allow you to retain certain assets, depending on the agreement.
  • Stops creditor enforcement actions once the agreement is in place.

Considerations:

  • Can be more expensive and complex than a Debt Agreement.
  • Significant impact on your credit rating and public insolvency records.
  • Requires the approval of creditors holding at least 75% of the debt value.


Bankruptcy


Bankruptcy is a formal legal process where an individual is declared insolvent and a trustee is appointed to manage their financial affairs.

Key Features:

  • Available for individuals unable to repay their debts.
  • Involves surrendering control of certain assets and financial decisions to a trustee.
  • Typically lasts for 3 years and 1 day.

Advantages:

  • Provides a fresh start by discharging most unsecured debts at the end of the bankruptcy period.
  • Stops legal action, garnishments, and creditor harassment.
  • Certain income levels are protected from garnishment.

Considerations:

  • Some assets may be sold to repay creditors (e.g., property, vehicles above a set value).
  • Significant impact on your credit rating for up to 5 years or longer.
  • Restrictions on business activities and travel during the bankruptcy period.
  • Does not discharge all debts (e.g., child support, fines, HECS/HELP debts).



Choosing the Right Option

When deciding on the best personal insolvency option for your situation, consider:

  • Debt Level: The amount and type of debt you owe.
  • Assets and Income: Whether you have significant assets or a high income to protect.
  • Future Goals: The impact of insolvency on your credit rating and long-term plans.
  • Legal Obligations: Understanding your responsibilities and the implications of each option.


How a Director’s Advocate Can Help

01

Evaluate your financial position and recommend the most suitable solution 

02

Negotiate with creditors on your behalf to achieve favourable outcomes.

 

03

Guide you through the legal and procedural aspects of formal insolvency options.


04

Help you rebuild your financial stability and plan for the future.

How a Director’s Advocate Can Help

In YOUR Corner

A Director’s Advocate can provide expert guidance in navigating personal insolvency options. They can:

Evaluate your financial position and recommend the most suitable solution 


Negotiate with creditors on your behalf to achieve favourable outcomes.


Guide you through the legal and procedural aspects of formal insolvency options.


Help you rebuild your financial stability and plan for the future.


At Thryvv.io, we act for you.

Thryvv.io acts for you. With more than 15 years’ experience in both financial consultative roles and in corporate level leadership, our role is to identify the possible exit opportunities, develop a strategy and help you manage the process throughout, working for you to get the best possible outcome

When appointed, we work with you to do the following:

  1. Assess your position.

  2. Resolve any issues identified. 

  3. Determine the most appropriate option for you.

  4. Manage the process on your behalf, to allow you to focus on moving forward. 


We work closely with a large number of Trustee's, and as such get access to discounted costs. This often means that we can offer director centric services for the same or very similar costs as going directly to them.