Personal Insolvency Agreement

Let Fix Bad Credit do what we do best, so you can get on with living
life at its best.

Ready to Become Debt Free?

Get Your Free Credit and Debt Assessment Now

Personal Insolvency Agreement

Are you feeling overwhelmed, and struggling to manage your debt?

  Are you wanting to stop the harassment from the debt collectors, and other creditors?

  Are you looking to avoid bankruptcy?

 A Personal Insolvency Agreement might be a better option for you.

 Australians are deemed insolvent if they are unable to pay their debts when they fall due.

 As an alternative to bankruptcy, a Personal Insolvency Agreement is a legally binding agreement with your creditors in which you come to an agreement on how you will pay your unsecured debts and avoid bankruptcy.

 In a Personal Insolvency Agreement your property, and your debts are managed by a Trustee.

A personal insolvency agreement is a formal, legally binding arrangement that is between you and your creditors to satisfy your unsecured debts. The agreement could involve you paying part or all of your debts by instalments or as a lump sum.

A Personal Insolvency Agreement is suitable if you have exhausted all other avenues of debt solutions, are not eligible for a Debt Agreement and don’t want to file for Bankruptcy. This means your debts, income or assets are above the threshold limits* set for Debt Agreements. In other words:

  • Your unsecured debts are greater than $118,063.40
  • Your divisible assets add up to more than $236,126.80
  • Your income is greater than $88,547.55.

*As reported by the Australian Financial Security Authority October 2020 – These dollar amounts regularly change to keep up with the Consumer Price Index or the base pension rate. Check here for the most up to date indexed amount.

Unlike Debt Agreements, no asset, income or debt limits apply to be eligible for a Personal Insolvency Agreement. However, you must meet the following criteria:

  • You are considered insolvent, in other words, you cannot pay your debts on their due dates
  • You are living in Australia, are present in Australia or have a business/residential connection with Australia
  • Haven’t proposed a Personal Insolvency Agreement in the last six months.

If you elect to enter into a Personal Insolvency Agreement, a Registered Trustee is appointed to investigate your financial affairs and administer the arrangement. The agreement, including payment terms and time period, is negotiated between you and your creditors by the Trustee, and usually ends when the final payment is made.

Under most Personal Insolvency Agreements a portion of the original debt will be written off as part of the agreement and the remaining is paid back in a way that you can afford. This can involve a sale or transfer of assets to pay creditors, lump sum payments or repayment arrangements.

We understand that this may all seem very overwhelming for anyone who hasn’t experienced this before. But the team at Fix Bad Credit are very experienced, and skilled in these situations, and it’s our role to take away the stress of it all  leaving you to get on with living your best life.

If you choose to work with us, you will have direct access to your personal Fix Bad Credit debt expert. Your Fix Bad Credit debt expert will work with our own Trustee to ensure you get the best outcome possible. Fix Bad Credit will negotiate on your behalf to ensure your debt is reduced to an affordable amount for you, and the rest is written off.

The length of a Personal Insolvency Agreement is dependent on the arrangement negotiated between you and your creditors. It usually ends when the final payment has been made. In most cases, a period of three to five years is negotiated, however, it can be longer. To be released from your debts properly, make sure your Personal Insolvency Agreement includes a release clause. If it doesn’t, your creditors may still be able to pursue you for any debt owing after the agreement has ended.

A Personal Insolvency Agreement only covers unsecured debts, this means debts that are not tied to an asset such as your:

  • Credit card debt
  • Utility, medical, legal and accounting (including tax) bills
  • Unsecured personal or payday loans
  • Overdrawn bank accounts
  • Unpaid rent.

You will not be released from secured debts such as mortgages or car loans, or government debts such as court fines, council rates, penalties and fines imposed by a court, most HELP/HECS-type debts and student loans, child support debts, family law maintenance payments or debts incurred by fraud. You will still have to pay these debts.

You will still be required to make your repayments on your secured debts such as your car or home loan (and any furniture or equipment rentals or similar). If you cannot make these payments, your house or car will most likely be repossessed by the lender.


What are the advantages of a Personal Insolvency Agreement?

  •  Stop the harassing phone calls. Creditors, debt collectors can no longer contact you
  • Your debt won’t accrue interest
  • You avoid going into Bankruptcy
  • You have fewer restrictions than Bankruptcy
  • Your debts are dealt with in a manageable and orderly manner
  • You may retain your assets (such as house or car) if the terms of the agreement allow


What happens if I enter into a Personal Insolvency Agreement, and do not make my payments?

If your circumstances change, and you can not make the payments you have committed to, we will work with you to request a change in the Agreement with our Trustee. Because we have our own Trustee, a big advantage of working with Fix Bad Credit is that we remain with you throughout the entire process. However, if you simply stop making payments without contacting us, then the Agreement will be put into default, and the creditors can make you bankrupt. We will work with you to avoid that.

Can I be a Director of a company?

Yes – if approved by the court.

What impact does it have on my credit report?

It will be listed on your credit report for a period of 5 years. This will impact your ability to obtain finance whilst this listing is on your Credit Report.

Your name will also be permanently publicly listed on the National Personal Insolvency Index.

What are the alternatives to a Personal Insolvency Agreement?

A Personal Insolvency Agreement is only one of many debt solutions available to you should you find yourself deep in debt. At Fix Bad Credit, we understand the impact that a Personal Insolvency Agreement can have on your financial circumstances.

Your Fix Bad Credit debt expert will conduct a free comprehensive assessment of your unique financial situation, investigating all other debt options before recommending a tailored solution that best suits your individual situation. This may include:

Formal Debt Solutions

There are other formal options for managing your debt under the Bankruptcy Act 1966, each having benefits and serious consequences. They include:

  • Debt Agreement – A formal legally binding (Part IX or Part 9) Debt Agreement helps you deal with unmanageable unsecured debts such as credit cards or personal loans. Your debt will likely be reduced to an agreed amount and the remainder you will be able to pay back through affordable regular periodic or lump sum payments. Find out more here.
  • Bankruptcy – Bankruptcy is the formal process of being declared unable to pay your debts. When you become bankrupt, you don’t have to pay most of the debts you owe. But it can severely affect your chances of borrowing money in the future so should only be considered as a last resort. Find out more here.

 Informal Debt Solutions

If you’re having difficulty makings your repayments, you may want to try to reach an informal agreement with your creditors. Whilst informal debt solutions are not legally binding, they are likely to have fewer serious consequences than formal debt arrangements.  Your creditors may be willing to:

  • give you more time to pay your debts
  • give you a lower interest rate
  • charge you fewer penalties.

Informal debt solutions could involve one, or a combination, of the following:

A Debt Moratorium – also known as a payment holiday or payment deferral, to either stop or reduce your payments and interest over a short period of time (usually between 3 to 12 months) to enable you to getback on your feet or to put other arrangements in place.

A Debt Consolidation – by bringing your existing multiple debts together into one single new loan, subject to a single interest rate, with a single regular (usually monthly) repayment it makes managing your debts significantly easier.

A Debt Negotiation – this involves discussions with your creditors to    informally renegotiate the terms of your loan, this might mean settling the debt for less than the full amount, lower interest rates, reduced fees and/or extending the length of the loan to reduce the size of your minimum payments.

A Debt Settlement If you have access to a lump sum, a debt settlement may help. A debt settlement is an informal arrangement with your creditor that offers less than the full amount you owe in order to wipe out the debt completely.

A longer-term informal arrangement If you have access to a lump sum, a debt settlement may help. A debt settlement is an informal arrangement with your creditor that offers less than the full amount you owe in order to wipe out the debt completely.

Debt is one of the few stressors in life that doesn’t go away. The worry is always there, along with the feeling that there is nothing that can be done about it. Money and debt worries cause heavy emotional and mental burdens, affecting your health, your work and your relationships. But just know you’re not alone. If you’re feeling overwhelmed by money matters, we’re here to help you find relief from your debt stress. Talking about debt can be daunting. It’s hard to know where to start or what your options are. However, you can take a small step right now by picking up the phone.

For more information on what might be the best option for you, call one of Fix Bad Credit’s debt solution experts on 1300 406 172. Our debt solution experts can help you assess your financial situation for free and identify debt solution options tailored for your specific personal financial circumstances, using their in-depth knowledge of credit law and debt processes.