Bankruptcy in Sydney – Which Path will you take?

There are always going to be choices and conclusions in life, and Bankruptcy is no different!

You truly need to ensure you know as much as achievable about Bankruptcy in Sydney. So when it boils down to Bankruptcy in Sydney, there are lots of choices that we can have concerning who we are, who we approach, and simply what has taken place. So I want to inform you about 3 substitutes to Bankruptcy that people are often confused about– Debt Consolidation, Personal Insolvency Agreements, and Debt Agreements– with any luck I can support you emerge as less confused when it comes to Bankruptcy and your selections.

CHOICE 1 – Debt consolidation.

This is where you can have an agency wrap up your financial obligations into a single bundle.


Can assist in saving money on interest.


There are lots of fees required (Often surpassing the interest spared).

Won’t help if your credit report rating is poor.

Won’t give you a clean slate – simply cleaning up the old financial obligation.

When it comes to Bankruptcy in Sydney, I really want you to be aware that everybody who offers you guidance is going to possess some kind of viewpoint (even myself) consequently be sceptical with anything a person informs you about Bankruptcy. This is certainly most important when you consider Debt consolidation because if you speak to somebody who works for one, they will of course inform you that it is the best way because they want your money. Every loan that they assist you wrap up into just one nice and simple package is going to be another fee– there is a reason why they are such a substantial money-making market. But, it can still be a really good alternative for you if you believe that getting all your debts in the one place is going to benefit – because even a small amount of interest saved over years easily builds up.

But chances are that if you read this, you have possibly already attempted this action, and discovered that your credit rating is so inadequate that you can not get a combined loan, that you are already too far advanced and the small amount of interest saved on will likely not make a difference. Most likely you’ve just had enough of the telephone calls, demands and feeling of despair that debt brings– and you are looking out for a remedy that can give you a new beginning.

CHOICE 2 – Personal Insolvency Agreements.

A PIA is a flexible way to organize your financial obligations without being insolvent, often it is a way of minimizing the amount incured and arranging exactly how and when everything is to be paid out. It doesn’t reach insolvency, but has a number of very similar aspects and involves appointing a trustee to control your property and develop a proposal to your lenders.

It is not Bankruptcy, but instead an ‘act of Bankruptcy’ which implies that if you cannot properly establish a PIA a creditor can easily apply to a court to declare you Bankrupt and push you to adhere to those steps. So it may appear that PIA is a good choice when it comes to Bankruptcy, but it is rarely an easy procedure to actually get all your lenders to agree– and if you don’t get at least 75% of them to agree, the PIA fails and this will complicate the concern with Bankruptcy.

OPTION 3 -Debt Agreements.

Debt agreements are another form of binding commitment between borrower and lender similar to a Personal Insolvency agreement.

So when it pertains to Bankruptcy in Sydney, what’s the major distinction then?

Well the initial obstacle is that it depends upon just how much salary you are handling, and specific other thresholds– If you come under the requirements you can lodge a debt agreement or a PIA, but if you are over your only option is a PIA. Similarly, you can not have had very similar financial complications in the last 10 years for a Debt Agreement, but it is only 6 months for a Personal Insolvency Agreement.

So with Bankruptcy, what is the benefit to a Debt Agreement? The debt agreement is often a lot quicker to establish and are a bit simpler when it comes to controlling trustees and coping with the government. It can also make it much easier to keep taking care of your business or be a director of a company.

When it concerns Bankruptcy I’ve become aware of financial institutions opting for less than 80 % on infrequent occasions, but that typically only occurs with a public company entering receivership with outstanding huge sums of money (the kind that makes the news reports). If you are owed $10million and you know the folks who are obligated to pay you the money have a group of fantastic lawyers and some very smart frameworks in place and they offer 5 % of the financial debt, you may accept it and be grateful. Unfortunately, regular people like you and me in Sydney aren’t getting that lucky!

So in summary, you have 3 substitutes to Bankruptcy – Debt Consolidation, Personal Insolvency Agreements, and Debt Agreements.

I would certainly advise starting by taking a look at a debt consolidation – but if you are too far in debt, it possibly won’t make too much difference and you will be swamped with fees.

Then, you need to take a look at whether you are entitled for a Debt Agreement. If you aren’t, consider a Personal Insolvency Agreement. But no matter which one you pick, you need to be reasonable with your expectations considering that when it concerns Bankruptcy nothing is uncomplicated.

If you wish to find out more about what to do, where to turn and what inquiries to ask about Bankruptcy, then don’t hesitate to speak to Bankruptcy Experts Sydney on 1300 795 575, or visit our website: