The consequences of proposing and entering into a personal insolvency agreement:
1.A debtor who appoints a controlling trustee commits an 'act of bankruptcy". A creditor can use this to apply to court to make the debtor bankrupt if the attempt to set up a personal insolvency agreement fails.
The appointment of the controlling trustee and the setting up of a personal insolvency will be recorded on the National Personal Insolvency Index (NPIL) forever. Details may also appear on a record held by a credit reporting organisation, such as Veda Advantage, for up to seven years.
2. Once a debtor has executed a personal insolvency agreement, the debtor is automatically disqualified from managing a corporation until the terms of the personal insolvency agreement have been complied with.
3.Once the debtor has appointed a controlling trustee, any existing creditor's petition to make a debtor bankrupt cannot proceed until the meeting of creditors is held to consider the debtor's proposal.
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