Occurs in lieu of bankruptcy.

Individual is unable to pay all debts.

Individual receives letters of demand, writs and/or bankruptcy notices from creditors, debt collectors or solicitors.

An individual who is insolvent enters into a formal arrangement with creditors.

The arrangement is flexible and the terms may be negotiated between the individual and creditors.

The Agreement is administered by an independent person.

The individual is released from most debts.

Different from a Part X Arrangement in that eligibilty is limited based on debtor's assets, liabilities, income and prior acts of bankruptcy.

Aimed at lower level debts often associated with consumer liabilities.

For Individual
It is binding upon all parties.

The restrictions of bankruptcy are avoided.

Provide relief from debt problems and extingush existing debts.

Arrangements are flexible.

Can start life afresh, free of debt.

Less expensive than Part X.

For Creditor
The arrangement is binding upon all parties.

Uncertainty is crystallised.

Arrangements are flexible.

Often provides a higher and quicker dividend than under bankruptcy.

The arrangement is generally finalised sooner and is less costly than Part X.