Restructuring & Turnaround
Personal Insolvency
Bankruptcy Act options and personal debt resolution for individuals and directors.
Restructuring & Turnaround
Decisive counsel for businesses facing financial and operational distress.
Overview
How we help.
Personal insolvency intersects closely with corporate matters, particularly where directors have provided personal guarantees, received Director Penalty Notices or face bankruptcy proceedings from creditors. The choices available under the Bankruptcy Act — formal bankruptcy, Part IX debt agreements, Part X personal insolvency agreements and informal arrangements — each carry different consequences and suit different circumstances.
Corson Fiske advises individuals and directors on the realistic options for resolving personal debt exposure. Our advice is practical, confidential and coordinated with any related corporate matters so that decisions made on one front do not create unintended consequences on another.
We are particularly experienced with matters involving directors facing the intersection of ATO exposure, personal guarantees and corporate restructuring — the situations where the wrong sequencing of decisions can materially worsen outcomes.
Capabilities
- Bankruptcy assessment and advice
- Part IX debt agreement eligibility and preparation
- Part X personal insolvency agreements
- Informal creditor arrangements
- Director Penalty Notice response
- ATO payment arrangement negotiation
- Personal guarantee exposure assessment
- Asset protection review
Client Situations
When clients engage us.
The issues that bring clients through our door tend to fall into familiar patterns.
A bankruptcy notice has been served
A creditor is pursuing bankruptcy and the individual needs urgent advice on response options.
Multiple debts need to be compromised
The individual has multiple unsecured debts and wants to explore a formal compromise.
A DPN has been received
A Director Penalty Notice has arrived and response options need to be assessed within the 21-day window.
Personal and corporate matters are intertwined
Personal guarantees, DPN exposure and a distressed company all need to be addressed in a coordinated way.
A bank has appointed an investigating accountant
A senior lender has commissioned an independent business review. The directors need parallel counsel to ensure their position is protected through the review and any subsequent process.
An earlier advisor has lost the confidence of the board
The company has been working with another advisor but the directors have lost confidence in either the advice or the approach. Second opinions are needed quickly.
Outcomes
What you can expect.
- A realistic assessment of the personal insolvency options
- A chosen path matched to the individual’s circumstances
- Coordinated resolution of related corporate matters
- Protected future financial position where possible
Process Guide
The Personal Insolvency Process Explained
Personal insolvency in Australia is governed by the Bankruptcy Act 1966 (Cth) and administered by AFSA (the Australian Financial Security Authority). Individuals facing unmanageable debt have several options — from informal arrangements through to formal bankruptcy — and the right path depends on asset position, income, debt profile and the presence of secured or priority creditors.
For directors, personal insolvency issues often arise alongside corporate insolvency: personal guarantees triggered by lender enforcement, Director Penalty Notices creating personal tax debts, or bankruptcy notices served by unpaid creditors. The sequencing of decisions — what to deal with first, and in what combination — materially affects outcomes.
The process, step by step
Step 01
Informal Arrangement
Direct negotiation with creditors to restructure debt, extend terms or accept partial settlement. No statutory process, no public record, but no statutory protection from creditor enforcement during negotiations.
Step 02
Part IX Debt Agreement
A statutory arrangement binding on unsecured creditors, available to individuals with unsecured debts and assets each below prescribed thresholds. Creditors vote on the proposal; if accepted, the individual pays according to the agreement and remaining debts are extinguished on completion. Registered on the National Personal Insolvency Index.
Step 03
Part X Personal Insolvency Agreement
A more flexible statutory arrangement suitable for individuals whose circumstances exceed Part IX thresholds. Administered by a trustee; binding on unsecured creditors upon acceptance. Registered on the NPII.
Step 04
Bankruptcy
Either voluntary (debtor’s petition) or involuntary (creditor’s petition following a bankruptcy notice). A trustee is appointed, the bankrupt’s estate vests in the trustee, assets above protected thresholds are realised for creditors, and the bankruptcy typically lasts three years. Most debts are released on discharge.
Director Risk
What directors need to understand.
Directors facing personal insolvency issues carry layered risks. Bankruptcy automatically disqualifies individuals from managing corporations under s 206B of the Corporations Act — meaning a bankrupt director loses the ability to act as a director for the duration of the bankruptcy and may face permanent difficulties in future appointments. Bankruptcy is listed on the NPII, searchable by employers, lenders and counterparties. Some professional registrations are affected. Income above threshold amounts is paid to the trustee through the contribution regime. Home equity above protected thresholds may be realised. And the interaction with corporate matters — voidable transactions, director examinations, DPN exposure — creates combinations that require coordinated handling.
How Corson Fiske Helps
Independent counsel for the director — not the company, not the creditors.
Corson Fiske advises directors on the full range of personal insolvency options and, critically, on the sequencing of personal and corporate insolvency decisions. We help directors understand which debts will and will not be released, whether assets can be protected, what the bankruptcy or PIA will mean for future director appointments, and how to coordinate personal insolvency with parallel corporate restructuring. We also advise directors facing bankruptcy notices on response options within the 21-day compliance period. Our advice is practical and outcome-focused — most clients engage us to avoid bankruptcy where that is realistic, and to manage it well where it is not.
Client Success
Outcomes from recent engagements.
Indicative results from engagements within this practice area. Client details have been anonymised; outcomes reflect actual matters completed by the firm.
$42M
Debt Restructured
Consensual debt restructure
Negotiated a multi-lender standstill and amendment-and-extension for a manufacturing group facing covenant breach, preserving trading operations and avoiding voluntary administration.
Manufacturing group, NSW
18 days
From Brief to DOCA
Accelerated DOCA
Advised directors of a distressed professional services firm through a compressed 18-day process to a creditor-accepted Deed of Company Arrangement.
Professional services, VIC
92%
Creditor Support
Safe harbour to refinance
Supported directors through a six-month safe harbour engagement ending in a complete refinancing with 92% creditor support for the transition plan.
Retail group, QLD
Why Corson Fiske
Experience where it counts.
Clients engage Corson Fiske because they need advice they can act on — delivered by senior practitioners who understand both the technical detail and the commercial consequences. Every engagement is led by a partner with direct experience in personal insolvency.
Our integrated structure means tax, legal, accounting and advisory questions are resolved within a single firm. For clients operating across Australia, Asia, New Zealand or Asia, our office network in Sydney, Melbourne, Perth, Singapore and Auckland provides consistent advice across jurisdictions.
Our Approach
A refined four-phase method for every engagement.
Corson Fiske applies the same disciplined framework to every matter, regardless of scale. The phases below are not a marketing device — they are the actual structure our partners use to move clients from uncertainty to resolution.
Phase One
01
Understand
A confidential partner-led briefing to establish the facts, commercial drivers, timing pressures and stakeholder dynamics.
- Confidential scoping conversation
- Document and data review
- Stakeholder mapping
- Initial risk identification
Phase Two
02
Analyse
Structured technical and commercial analysis of every realistic option, with a clear view of risks, costs and likely outcomes.
- Technical legal and tax analysis
- Commercial modelling
- Risk-weighted options assessment
- Precedent and market benchmarking
Phase Three
03
Recommend
A written partner recommendation in plain English — not a list of caveats. We stand behind our advice and explain our reasoning.
- Clear written recommendation
- Implementation sequencing
- Stakeholder communication plan
- Contingency and fallback positions
Phase Four
04
Execute
Hands-on delivery of the agreed plan with partner oversight, regular milestone reporting and clear handback at completion.
- Implementation leadership
- Stakeholder engagement
- Milestone tracking and reporting
- Completion review and handback
Key Considerations
What clients need to know.
Engaging external advisors on any significant matter raises practical questions about scope, timing, cost and outcomes. We believe in being straightforward about each of these from the first conversation.
How engagements typically begin
Every engagement starts with a confidential initial conversation — usually 30 to 60 minutes — in which we listen to the situation, ask the questions needed to understand it properly, and share a view on whether and how we can help. There is no charge for this conversation and no obligation to proceed.
How we scope and price work
We prefer fixed-fee or capped-fee arrangements wherever the scope allows. Where the scope is genuinely uncertain — as in contested matters — we agree hourly rates upfront and provide regular fee updates against defined phases. We do not bill for internal discussions, file opening or routine administration.
Who you will work with
Every engagement is led by a partner with direct experience in the matter type. That partner remains your primary point of contact throughout. Specialist colleagues join the team where their expertise is required, but you will never be passed from person to person or find the partner you hired is no longer on the file.
How we handle confidentiality and privilege
All engagements are subject to strict confidentiality. Where legal advice is being delivered, it is provided through our incorporated legal practice and attracts legal professional privilege. We take document security, information handling and communications discipline seriously on every matter.
Get the right advice from Corson Fiske.
Confidential, no-obligation initial consultations with a partner who specialises in personal insolvency.