# Debt pressure: prepare for personal insolvency advice

Canonical: https://findlawfirms.com.au/guides/personal-insolvency-enquiry

Updated: 2026-09-20

General Australian consumer preparation information. Not advice about an individual matter. Examples are illustrative. Read source scopes before applying jurisdiction-specific information.

> Bring a complete picture of debts, assets and notices. Ask about alternatives and consequences before committing to a formal option.

When several debts become difficult to manage, the immediate question is often which letter to deal with first. An adviser needs both the urgent document and the wider financial picture. This guide helps you prepare for a discussion about personal debt and legal options. It does not recommend bankruptcy or decide which debts, assets or income would be affected.

## Put notices and dates at the front

List court documents, demands and enforcement correspondence separately from routine statements. Keep envelopes or delivery records if available and record when each document was received. Tell the adviser about any listed hearing or requested response immediately. Ask who is checking the legal significance of those dates. A debt summary or appointment booking does not itself deal with an outstanding notice.

## Build an honest financial snapshot

Prepare a list of creditors, balances as shown on recent statements, repayment arrangements and disputed amounts. List assets, income, guarantees and jointly held interests without deciding in advance that something is protected or irrelevant. Mark estimates and unknown amounts clearly. Ask how to supply records securely. The purpose is to give the adviser a reliable starting point, not to produce an insolvency assessment yourself.

- Creditor names, references and recent statements
- Urgent notices and any existing proceedings
- Income, assets and shared interests
- Guarantees and existing repayment arrangements

## Distinguish counselling from legal advice

Financial counselling can help with financial difficulty, while a lawyer may be needed for a disputed debt, proceedings or particular legal consequences. Ask each service what it can do and whether it charges. AFSA publishes comparisons of formal personal insolvency options and their consequences. Use that official material to frame questions; do not choose a formal option from a headline description alone.

## Ask about the consequences that matter to you

Explain your work, business involvement, property arrangements and any planned travel or borrowing. Ask the adviser which consequences need closer consideration and which debts would require separate treatment. Do not assume a formal process removes every obligation or affects only the person signing the paperwork. Where another person is involved, ask whether they need independent advice and how their information should be handled.

## Illustrative example: a guarantee in the background

A person seeks help with overdue personal accounts and initially omits a guarantee signed for a family business. When preparing the document list, they include it and ask whether it changes the advice needed. This invented example illustrates why a complete brief matters; it does not determine liability under the guarantee or predict what would happen to the business.

## Leave with decisions rather than assumptions

Ask for an explanation of available options, unanswered questions and the next decision that needs advice. Record any action accepted by the lawyer, its cost and the information you must provide. Avoid moving assets or entering a new paid arrangement on the strength of a general guide. Obtain advice about your particular circumstances before taking steps that may change your position.

## Does this guide recommend bankruptcy?

No. It helps organise a consultation. Ask about alternatives, eligibility, costs and consequences using AFSA’s current information and individual advice.

## Should I leave out a debt I dispute?

Include it and mark it as disputed. Provide the reason and documents so the adviser can distinguish the dispute from the wider financial position.

## Official sources and scope

- [AFSA — compare personal insolvency options](https://www.afsa.gov.au/i-cant-pay-my-debts/compare-your-insolvency-options) — Official comparison of formal personal insolvency options; no option is recommended or individual consequence calculated. Checked 2026-09-20.

## Related guides

- https://findlawfirms.com.au/guides/free-and-low-cost-legal-help

- https://findlawfirms.com.au/guides/debt-recovery-preparation

- https://findlawfirms.com.au/guides/personal-guarantee-advice

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