There are some alternatives to bankruptcy. Proposing a debt agreement to your creditors is a means by which you may be able to avoid bankruptcy by compromising your debts. It is a binding agreement under Part IX of the Bankruptcy Act 1966 (Cth) (Act) where, if a majority in value of the creditors who reply before the applicable deadline vote in favour, all are dragged along.
There are thresholds to meet to qualify under Part IX of the Act. However, this does not prevent you from making an informal proposal which would bind the creditors who accept. This may still be an effective way of compromising many singular debts so as to reduce debts levels to amounts that you can service — in tum avoiding bankruptcy. Where full disclose of all debts is made to all creditors outside Part IX, acceptance rates are generally significant.
For more information about bankruptcy alternatives and debt agreements, both formal and informal, please contact us on 8410 9294 or send an email via this form.