How do debtors propose a Personal Insolvency Agreement?
A debtor must complete three forms: (i) an authority under section 188 of the Bankruptcy Act – this documents gives authority to a ‘controlling trustee’ to take control of the debtor’s financial affairs; (ii) a statement of affairs – detailing the debtor’s personal and financial (asset and debt) information; and (iii) a daft personal insolvency agreement – detailing the proposal to be submitted to creditors. The debtor also needs to obtain a Consent to Act from a solicitor, a registered trustee or the official trustee. They do this by having one of these people sign the bottom of the section 188 Authority, thereby agreeing to act as a controlling trustee. These documents are then filed with the Insolvency & Trustee Service Australia (ITSA) and the debtor is placed under a Controlling Trusteeship. The person who consented to act is known as a controlling trustee.
