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Personal Insolvency Agreement Australia

A Personal Insolvency Agreement, also known as a Part X, is a formal agreement one can reach with their creditors when they are facing personal insolvency. A Personal Insolvency Agreement is often seen as a preferred alternative to bankruptcy, as it comes with less severe consequences for the individual.

The purpose of a Personal Insolvency Agreement is to propose a settlement  arrangement between the indebted individual and their unsecured creditors. In this arrangement the debtor will make regular repayments that will eventually lead to the creditors receiving a percentage return on their debt. Most creditors are happy for a Personal Insolvency Agreement to last for 3 to 5 years. To begin the Personal Insolvency Agreement process, the individual must appoint themselves a Controlling Trustee.

During the period of the Personal Insolvency Agreement, no creditor is able to commence or force bankruptcy proceedings, or take any other debt recovery action against the individual. All enquiries on the accounts are to be dealt with by the Trustee of the Personal Insolvency Agreement.

For free and confidential advice on Personal Insolvency Agreements, contact CRS Insolvency Services today on 1800 210 073.

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Business Debt Australia

CRS Insolvency Services are leading debt advice specialist for Australian companies. Even post- Global Financial Crisis days, many companies are facing insolvency and potential liquidation.

As the bankruptcy and business debt experts in Australia, CRS offers a range of services  to assist Australian business owners. For a company to trade whilst insolvent is illegal in Australia, which is why CRS are committed to offering free and confidential advice for those  struggling with business debt.

Common symptoms of insolvency include ongoing losses, bouncing cheques, exceeding overdraft limits and falling stock levels. To get professional advice on insolvency and liquidation, contact CRS Insolvency Services today on 1800 210 073.

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You are our Number 1 Priority

CRS Insolvency Services aims to be the leading insolvency experts in Australia, offering 24-hour advice free of charge and without obligation. We promise that whenever you need to talk us, we will be there to help you!

We are unlike any other insolvency firm as we are specialised in both personal and corporate insolvencies. This means that our foremost objective is to make sure that our advice is at a personal level, no matter what the situation.

With our main focus being placed on you, we will go that extra mile and work closely with and around you, making decisions based on your own circumstances. As a result of no limitations placed on us by high overheads and a rigid administration structure, we are able to offer our clients more competitive fees using flexible payment agreements.

Throughout the years of experience we have found ourselves working with some of the most complex insolvencies within Australia. This means that no matter how complicated your situation appears to be, we will be able to help you. Standing by our promise we will assure that we will create the best outcome for you with the lowest possible price.

We understand that it is easy to become disoriented by the complicated terms and policies within the insolvency world and this is why we pledge to make the insolvency process as easy as possible for you. We will keep you informed at all times.

We want to help you every step of the way, and that is why we offer free, 24/7 advice on our insolvency hotline. Call now on 1800 210 073.

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What is Bankuptcy?

‘Bankruptcy’ is one of those words that is often stigmatised – what exactly is bankruptcy and how can you avoid its traps?

Bankruptcy is a legal process that releases a person from (almost) all of his or her debts. Declaring bankruptcy can offer a clean slate and a chance for you to start anew financially. But it also has negative effects, in that it marks your credit file and can result in the loss of your home and other assets. Bankruptcy is generally considered as a last resort – but it can be a good option for those who can no longer afford to pay any of their debts and have little or no assets to protect.

Formal alternatives to bankruptcy include a Debt Agreement or a Personal Insolvency Agreement. These are options to help those who are genuinely struggling, but who can afford to pay some of their debt and so do not necessarily have to declare bankruptcy.

You can work to avoid bankruptcy through simple, everyday solutions. For example, avoid using or applying for new credit cards, as it can turn into a cycle of over-spending and charging debts onto new cards. Know your limits and make sure you don’t live beyond what you can afford. Most importantly, choose to get help as soon as you realise that you are falling behind on paying off your debts. Don’t ignore the letters and calls from the banks.

Allow CRS Insolvency Services to help you get back on your feet, avoid bankruptcy and become debt free. Call us toll-free on 1800 210 073 whenever it is convenient for you. We operate 24 hours a day, 7 days a week.

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What is a personal insolvency agreement?

Declaring bankruptcy is a serious step that may have long-term consequences on your career and ability to source finance. When facing personal financial turmoil, Insolvency Services Australia recommends considering a Personal Insolvency Agreement (PIA) as a legal alternative to bankruptcy. A Personal Insolvency Agreement is a legally binding arrangement with your creditors whereby you will commit to paying a certain amount in order to settle your unsecured debts. Your creditors then freeze your debts so that they will stop accruing interest and charges, and over the course of the agreement they will receive a percentage of the frozen debt. In order for a PIA application to be accepted you need at least 75% of your creditors (in value) and 50% (in number) to vote in favour of it at a creditor meeting. Once it has been accepted the PIA becomes binding on all unsecured creditors, even those who may have voted against it. Whilst you are under the protection of an active PIA no unsecured creditor is able to try to have you made bankrupt.

A PIA is an excellent alternative to bankruptcy for those who stand to be particularly adversely affected by it, such as those with a property or who need to travel overseas often. Not only will a Personal Insolvency Agreement help you save your house but it will also stop your creditors from forcing you into bankruptcy. So long as you maintain your mortgage repayments and complete your PIA your home should be safe. Furthermore, if you need to travel overseas for any reason, there will be restrictions on you.

For more information on Personal Insolvency Agreements and how Insolvency Services Australia can help you to propose one, contact us today on 1800 003 883.

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What is a Debt Agreement?

A Debt Agreement is a legal alternative to bankruptcy that involves an arrangement between a debtor and their unsecured creditors. It allows the debtor to pay back an agreed amount of their outstanding debts over a period of time.

A Debt Agreement is set up and administered by a Registered Debt Agreement Administrator (RDAA). When you contact a RDAA about a Debt Agreement, they will investigate your financial situation and household budget to determine what you can afford and how much this will give each of your creditors. When the repayment plan (which usually lasts for 3-5 years) is created, it is put toward the creditors and voted upon by them. Once accepted, the RDAA is responsible for collecting the repayments and distributing them to the creditors, and handling all paperwork and creditor enquiries.

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The Basics of Company Liquidation

The term “liquidation” refers to the legal dissolution of a company that is insolvent, which means that it does not have enough in the way of assets to pay all of its creditors in full. You would only need a liquidation for a Pty Limited or Limited company – if you are running a business, either as a sole trader or in a partnership, the business debts would essentially be in your own name/s, and so you would have to consider options that cover personal debts if you found yourself insolvent (for example: a Debt Agreement, Personal Insolvency Agreement or Bankruptcy). When people talk about “winding up” or “dissolving” a company, they are talking about liquidation.

Who can liquidate my company?

The procedures for a company liquidation, as set out in the Australian Corporations Act, are very strict, and as such a liquidation can only be handled by a Registered Liquidator who is licensed by the Australian Securities and Investments Commission (ASIC). Once appointed, the liquidator is the only one authorised to deal with the company’s affairs – the company directors will no longer have any power.

What happens during the liquidation?

The goal is for the company’s available funds to be distributed in a fair and orderly manner. The liquidator is responsible for selling the company’s assets and distributing the proceeds in the prescribed manner. The costs and expenses of the liquidator are paid first, after which any excess funds (if available) are paid to the company’s priority creditors (which includes claims made by employees), and then any ordinary unsecured creditor claims. Quite often there will be not be enough money to pay the priority creditors and ordinary creditors in full, in which case they would receive a dividend on a pro-rata basis.

The liquidator will also investigate the company’s affairs and ensure that all of its actions were legitimate and fair, in particular, payments to its creditors. If there is evidence that any creditor received a payment that was in preference to the other creditors, the liquidator can apply to the Court to have that transaction reversed so that the funds can be distributed fairly. This also applies if it is found that a director entered into an uncommercial or unfair director related transaction.

Who appoints the liquidator?

There are two ways in which a liquidator can be appointed to dissolve a company.

The first is a Creditors Voluntary Liquidation (CVL), and it occurs when the directors and shareholders make the decision to have the company wound up. By actively taking that step, a Registered Liquidator of their own choosing can be appointed.

The second way is via a Court Order. A company director or shareholder, or one of the company’s creditors, can make the application for the order. If it is a creditor that makes the application, the company will not have any control over who gets appointed as the liquidator and the creditor will generally choose an Official Liquidator themselves.

Why would I voluntarily appoint a liquidator?

If the company is insolvent and unable to pay all of its creditors in full, it should be immediately placed into voluntary liquidation by the company directors. If the directors delay they could become guilty of insolvent trading which has serious implications for the directors. One might also choose to appoint a liquidator when there are serious disputes between directors and/or shareholders that are likely to adversely affect the company’s ability to continue trading (this is known as a Provisional Liquidation).

If the company is not insolvent but the directors wish for it to be deregistered, a liquidator can be appointed to oversee a “solvent liquidation”, which is essentially placing the job of realising the company’s assets and paying out the debts into the hands of a registered liquidator. Alternatively, the company can pay out all of its debts itself and then simply apply to ASIC to be deregistered.

How much will it cost to liquidate my company?

There are many factors that will influence the cost of a company liquidation, the first being whether the company is insolvent or solvent. If the company is insolvent and there are insufficient assets available to cover the cost of the liquidation, a director’s or shareholder’s contribution will be required. The cost of a liquidation will vary depending upon:

  • how complex the job is going to be (i.e. the liquidation will be more complex if the company is still trading);
  • the value of the assets; and
  • the number of creditors involved

Every situation is going to be slightly different, so the best way to get an indication of the cost is to call us on 1800 003 883. Don’t appoint another liquidator without talking to us first. We will beat any written quote – guaranteed!

Our advice line is open 24 hours a day.

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