Personal Insolvency Agreement Case Study
Jason was a 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 Tax Office advising that the deductions on the investment scheme had been disallowed and he owed $250,000 to the Australian Tax Office, inclusive of penalties.
Jason had 3 investment properties none of which had sufficient equity to allow him to refinance or sell and use the equity to pay down debt.
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 Australian Tax Office.
Despite numerous meetings, Jason had not been able to successfully settle the matter with the Australian Tax Office. He now feared legal action and bankruptcy.
Jason was ineligible to submit a Debt Agreement because his income and liabilities exceed the Debt Agreement threshold amounts. However, Jason was eligible to submit a Personal Insolvency Agreement.
Fox Symes assisted Jason in the preparation and submission of a Personal Insolvency Agreement with his creditors through a registered Trustee.
The 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 Personal Insolvency Agreement.
More information on Personal Insolvency Agreements
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