Insolvency and bankruptcy are the two remedies available for those who are bogged by debts. According to Fiona Cope, Chief Officer, Citizens Advice Bureau, North Somerset, since the recent past, there has been a reasonable increase in the number of people applying for insolvency. In fact, Fiona Cope points out that during 2014, in North Somerset alone, about 479 people applied for insolvency. This trend is noticed in various other countries also such as Australia, India and various other European countries. Such people prefer to file personal insolvency agreement Australia banks help to undertake so that they can they can buy peace of mind.
Insolvency a temporary phase:
As you know, insolvency is a temporary phase of your inability to repay the debts. For example, you are unable to pay the outstanding loans because you have not got the money that is due to you. In such cases, you would enter into personal insolvency agreement Australia banks undertake, and you would be allowed that extra time to repay the amount. You can enter into an agreement provided your debts are over and above certain limits as fixed by the law of the land.
Interestingly, the figure quoted by Fiona Cope only represents people who have applied for insolvency. You may be surprised that in addition to those who have applied for insolvency, there are many more people who are left with no assets. Such people would not be eligible for a personal insolvency agreements. In the alternative, such people may have to apply for bankruptcy. Bankruptcy is the last remedy available for those who are debt ridden. By this process, they may get rid of most of their debts.
Insolvency can affect any individual, whether rich or poor as well as companies and corporate. If you are affected by insolvency, then you may avail the services of any registered or an official trustee. They will guide you in the entire process of insolvency proceedings. As you know, the process of entering into personal insolvency agreement Australia trustees help with is quite complicated, and it involves a reasonable amount of paperwork. But, the trustees will ensure that the proceedings are hassle free and also completed in the earliest possible time. However, if you are a company or corporate, then you will be guided by the Corporations Act 2001 of Australia. Check them out at https://www.debtmediators.com.au/personal-debt-solutions/personal-insolvency-agreements/
Advantages to debtors:
If you are an individual and when you apply for insolvency, the trustees normally suggest you to enter into the agreement under Part X of Bankruptcy Act. According to the registered and official trustees, personal insolvency agreement part x offers various benefits to the person applying for insolvency. In the first place, by applying for insolvency under Part X, you can avoid going bankrupt. Further, until the disposal of your application, the creditors are prevented from taking any other steps to recover the loan. It also allows you to clear the debts in an ordinary manner.
Advantages to the creditors:
The personal insolvency agreement process is also found to be beneficial to the creditors. The creditor will get back the amount due much sooner than if the debtor is declared bankrupt. Further, the creditor can get a higher amount than when the person was declared bankrupt. The cost administering the trustee is much lower as compared to the proceedings for administering bankruptcy.