Monday 22 July 2013

What is the difference between a Personal Insolvency Agreement & bankruptcy?

What is the difference between a Personal Insolvency Agreement & bankruptcy?

Amidst all the stress and confusion of trying to find a solution for your debt problems, it can sometimes be hard to figure out exactly what you are being offered, and whether or not it is the right solution for you.

This is especially true when you are being offered advice from several different sources, some of which might not be able to offer you all of the products that are available to you.

A Personal Insolvency Agreement is often seen to be the same as, or practically indistinguishable from, Bankruptcy. Both a Bankruptcy and a Personal Insolvency Agreement will place a mark on your credit file for seven years, and a permanent record is kept of each on the National Personal Insolvency Index.

But there are several important differences between a Personal Insolvency Agreement and Bankruptcy, and it is these differences that will help you to decide whether or not it is the right option for you.

The main difference between a Personal Insolvency Agreement and Bankruptcy is that under a Personal Insolvency Agreement, you do not have to worry about losing your home.

Whereas Bankruptcy works by selling your assets to pay your debts, a Personal Insolvency Agreement is instead a legally binding payment arrangement. So long as you adhere to the terms of the agreement, you will not have to worry that one of your unsecured creditors will try to have your property sold.

Another important difference is the fact that you are free to travel overseas if you are in a Personal Insolvency Agreement. This factor is extremely important for those people who are required to travel for their employment.

Other differences include less severe restrictions if you wish to apply for more credit, which can be advantageous for the self-employed, and different rules when it comes to the running of one’s business whilst under an arrangement.

Most people wish to avoid Bankruptcy because of the stigma or a sense of responsibility to repay their debts, but a lot of people, must avoid the harsh restrictions placed on them by Bankruptcy. To know if a Personal Insolvency Agreement is right for you consult with an expert who can properly advise you and who is fully licensed to provide the solution.

Don’t deal with a company that will later refer your case to a Trustee in Bankruptcy after you have paid them a set-up fee.

At Debt Free Australia, their CEO is a Trustee in Bankruptcy so they can help you from the beginning with setting up a Personal Insolvency Agreement or Bankruptcy. Call them today on 1800 98 10 70 for impartial and obligation-free advice.

Navigating debt solutions can be overwhelming, especially when faced with various options like Personal Insolvency Agreements and bankruptcy. While these may seem similar, understanding their differences is crucial in making the right decision for your financial situation.

One key distinction is the protection of your home. Unlike bankruptcy, a Personal Insolvency Agreement doesn't typically involve the sale of assets like your home to repay debts, offering more security for homeowners.

Additionally, Personal Insolvency Agreements offer more flexibility, allowing for international travel and fewer restrictions on obtaining credit, which can be beneficial for certain individuals, especially those self-employed or reliant on travel for work.

Ultimately, the choice between a Personal Insolvency Agreement and bankruptcy depends on your unique circumstances, financial goals, and priorities. Seeking advice from a qualified and licensed expert is essential in making an informed decision.

At Debt Free Australia, their expertise and commitment to client welfare ensure you receive impartial advice tailored to your needs. Whether considering a Personal Insolvency Agreement or bankruptcy, their team, led by a Trustee in Bankruptcy, can guide you through the process. Contact them today for obligation-free assistance in finding the right debt solution for you.

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