Personal Insolvency Solutions
Debt doesn't have to be the end of the story.
If personal debt has become overwhelming, you have more options than you think. Each option differs enormously in what they cost you, what they protect and how long they follow you. Finding out where you stand starts with one free, confidential conversation.
What personal insolvency means in Australia
Personal insolvency means you are unable to pay your debts as they fall due. It is not a single process. It is an umbrella term covering the ways an individual, rather than a company, can put their financial affairs back in order, and in Australia those processes are overseen by the Australian Financial Security Authority.
Three of the four are formal insolvency options created by the Bankruptcy Act 1966: debt agreements under Part IX, a personal insolvency agreement under Part X, and bankruptcy itself. The fourth, an informal arrangement, sits outside the Bankruptcy Act altogether. That single distinction drives most of what follows, because a formal insolvency process binds your creditors and goes on a public register, and an informal deal does neither.
- Am I actually insolvent?
- If you can’t pay your personal debts as they fall due, yes, whatever your financial position looks like on paper.
- Does it wipe the debt?
- No. Some options settle debts for less than the full amount; some release you from what’s left at the end. None make debt disappear, and anyone promising that is selling you something.
- Will it be public?
- The three formal options are recorded on the National Personal Insolvency Index, which anyone can search. An informal arrangement never appears on it.
- What about my credit rating?
- Your credit report is a separate record with its own rules. A formal insolvency sits there for the later of five years from when it starts and two years from when it ends, usually about five years, and usually well before the register entry clears.
Three practical ways forward
The point of any of these options is the same: to lift the weight and give you room to breathe again.
Informal Debt Arrangements
Sort things out privately, outside any formal process.
A private deal negotiated directly with the people you owe: smaller instalments for a period, a pause on repayments, interest held, or a reduced lump sum in full and final settlement. Nothing goes on any public register. The trade-off is the whole story here: an informal arrangement isn’t legally binding. A creditor who agrees today can change their mind tomorrow, and unsecured creditors who were never part of the deal aren’t bound by it at all.
Find out more →Personal Insolvency Agreement
A binding deal with your creditors, and a way to avoid bankruptcy.
A legally binding agreement under Part X of the Bankruptcy Act that settles your debts on terms you propose, without you being declared bankrupt. A personal insolvency agreement involves a controlling trustee, a written proposal, and a creditor vote. It passes if a majority in number and at least 75% in dollar value of the creditors vote. There are no income, asset or debt limits, so it stays open when your debts are too large for debt agreements. You do need to be insolvent and have a residential or business connection to Australia.
Find out more →Bankruptcy
A defined end to unmanageable debt.
A formal process that releases you from most unsecured debts and stops most legal action by unsecured creditors. It runs for three years, and one day from the day AFSA accepts your paperwork, though some obligations outlast that period, and a trustee administers it throughout. It carries real long-term consequences. It also carries certainty, which is exactly what people who’ve run out of other options need.
Find out more →Your insolvency options compared
Every option below is a genuine route out. Which one fits depends on what you owe, what you own and what you can realistically offer.
| Option | Who it may suit | Binding on creditors? | On the public register? | How long it lasts |
|---|---|---|---|---|
| Informal debt arrangement | Stable income, a manageable shortfall, and a preference for privacy | No, it sits outside the Bankruptcy Act entirely | No | By negotiation |
| Debt agreement (Part IX) | Lower income, limited assets and smaller debts, inside the Act’s limits | Yes, once accepted: on a majority in value of the creditors who reply | Yes, then removed a set period after your final payment, generally at least five years | Set by the agreement |
| Personal insolvency agreement (Part X) | Complex affairs or a higher income, with certain assets to protect | Yes, once accepted: on a majority in number and at least 75% in value of those who vote | Yes, permanently | Set by the agreement |
| Bankruptcy | Few assets, a modest income and debts beyond repayment | Yes | Yes, permanently | Three years and one day |
Please note. The public register is the National Personal Insolvency Index. It isn't your credit report. These are separate records, kept by different bodies, for different periods. The Part IX limits are set by the Act, indexed twice a year and published by AFSA, so we check your figures against the current numbers rather than a fixed amount. Bankruptcy is the one formal option with no statutory filing fee, so it isn't automatically the dearest.
Real people, on your side, when it matters most
At Rapsey Griffiths, you'll deal with the people whose name is on the door: Mitch Griffiths and Chad Rapsey, Founders. Between them, Mitch and Chad bring decades of restructuring and personal insolvency experience, and a calm, straight-talking approach that helps people understand exactly where they stand.
Financial hardship is stressful and isolating, and it's rarely just about money. We've guided many individuals through the hardest financial moments of their lives with discretion, genuine care, and straight answers.
What happens when you get in touch
Reaching out is the hardest part. Here's exactly what to expect, so there's nothing to be anxious about.
A free, confidential call
Tell us what is going on in your own words. Everything you share stays private, with no cost and no obligation to go further.
We explain your options
We look at your financial affairs in full: what you owe, what you own and what you could realistically offer. Then we walk you through which of the four paths actually fit your financial situation, with the trade-offs of each spelled out.
We handle it from here
If you decide to proceed, we manage the process and deal with the creditors, so you can stop worrying and start moving forward.
What people ask us first
Straight answers to the questions we hear most.