What I do not like about the alternatives to bankruptcy

The alternatives to bankruptcy are debt agreements and personal insolvency agreements (PIA), and I don’t like them.

Why? Because, unlike with bankruptcy, the law does not provide for the amount of income you can keep in order to cover your everyday needs.

This means you can over-commit to servicing the debt, leaving yourself without enough money to take care of yourself and your family. In other words, you are still under financial pressure with all the negative consequences involved.

There is also no limit for how long these two alternatives can remain in force, so they could take longer to be resolved than the three years imposed by bankruptcy.

Debt agreements and PIAs do not release you from your debts until they are finalised. If they go on for five years, you will not be released from your liabilities until that time, providing you have met all the terms of the agreement.

Be aware that I have heard of a debt agreement that went for seven years! In my experience, the longer these options go on for, the harder it is for the person involved and the less likely it is to be completed successfully.

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone (1300 060 122) or helpdesk@nichollsco.com.au . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.