Any form of debt is a worrisome burden that could affect your life, work, and mental stability unless it is cleared up once and for all. Unfortunately, the actual practice of clearing the debt is very difficult, especially if the business or personal problems at the workplace is hindering the settlement, especially if there is pressure from the creditors waiting for the repayments to their loan.
In an effort to cut down and settle a large number of bankruptcies that are clogging up the courts, the Government has come up with part X debt agreement clause especially when it comes to individuals who are filing for bankruptcy. This agreement is called a personal insolvency agreement or PIA, and is a legal and binding proposal and agreement between the debtor and their creditors; the agreement grants the debtor the right to pay the creditors either in full or in part payments.
To claim for a PIA agreement, there is no limit to the amount of debt, income limitations, or assets to become eligible for this status. One of the conditions is that the parties must mutually agree to the appointment of a controlling trustee who must be a registered trustee; however, a solicitor with suitable qualifications would also be acceptable as a controlling trustee.
Since this process is a way to avoid the initiation of bankruptcy procedures, which would seriously affect the credit rating of the individual, there is a lot of responsibility on the shoulders of the controlling trustee when negotiating a part X debt agreement. The role of the trustee is to examine the records and financial dealings of the debtor and study the proposal in detail before making his report to the creditor or creditors. Based on the proposal, the trustee will inform the creditors about the monetary payback they might expect from the debtor if they curtail any plans to declare the debtor bankrupt.
Using the figures from his study, he will try and make the case for accepting the proposal put forward by him which will provide the creditors with some compensation on a long-term payout scheme. The creditors too can question the veracity of the debtor’s financial affairs, and the trustee is duty-bound to share the information to clear any doubts that the creditors may have.
Debt Management Options
The problem of an individual falling into debt could be for a number of reasons, loss of employment, divorce, family or individual health problems, etc.; if they are not prepared for this the consequences could be quite traumatic for everyone concerned. With pressure from the creditors, the problem can only be solved by turning to find debt management solutions that are acceptable to the creditors through the services of a registered debt negotiator or debt agreement administrator. With their years of experience, they will go through your financial records, count down the options available, advise you on the best options, and put forward these options to the creditors for their approval.