Part X Personal Insolvency Agreement Example

Jason was a professional pilot with an income of $200,000 per annum. Jason entered in a marketed investment scheme 4 years ago, which provided accelerated tax deductions. Jason received a letter from the Australian Taxation Office advising that the deductions on the investment scheme had been disallowed and he owed $250,000 to the ATO, inclusive of penalties.

Jason had 3 investment properties none of which had sufficient equity to allow him use to pay his debt to the ATO.

The Problem

Jason could not afford to maintain his repayments on his personal loans and credit cards, which totalled $95,000, his monthly payments on his investment property loans, and to pay $250,000 to the ATO.

Despite numerous meetings, Jason had not been able to successfully settle the matter with the ATO. He now feared legal action and bankruptcy.

The Solution

Jason is ineligible to submit a Debt Agreement because his income and liabilities exceed the Debt Agreement threshold amounts. However, Jason is eligible to submit a formal proposal to his creditors pursuant to Part X of the Bankruptcy Act.

Fox Symes assisted Jason in the preparation and submission of a Part X Personal Insolvency Agreement with his creditors through a registered Trustee.

The Part X Personal Insolvency Agreement would mean Jason would pay $3,000 per month for 36 month to his unsecured creditors as full and final settlement of his debts. Jason was able to avoid the stigma and repercussions of bankruptcy by offering creditors around 30 cents in the dollar.

With the assistance of Fox Symes, creditors accepted the Part X Personal Insolvency Agreement.

(The above is an example only and is not a true account)

More information on Part X Personal Insolvency Agreements

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