Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) If a personal insolvency agreement provides for a debtor to be released from a provable debt, the agreement operates to release the debtor from that provable debt unless the agreement is set aside or terminated under this Part.
(2) Subsection (1) has effect subject to subsections (3), (4) and (5).
Exceptions
(3) Subsection (1) does not operate to release the debtor from a debt that would not be released by his or her discharge from bankruptcy if he or she had become a bankrupt on the day on which he or she executed the personal insolvency agreement.
(4) Subsection (1) does not affect the right of a secured creditor, or a person claiming through or under a secured creditor, to realise or otherwise deal with the creditor's security:
(a) if the secured creditor has not proved under the agreement for any part of the secured debt--for the purpose of obtaining payment of the secured debt; or
(b) if the secured creditor has proved under the agreement for part of the secured debt--for the purpose of obtaining payment of the part of the secured debt for which the creditor has not proved under the agreement;
and, for the purposes of enabling the secured creditor, or a person claiming through or under a secured creditor, so to realise or deal with the creditor's security, but not otherwise, the secured debt, or the part of the secured debt, as the case may be, is taken not to have been released.
(5) A personal insolvency agreement does not release from any liability a person who, at the date on which the debtor executed the agreement, was:
(a) a partner or a co - trustee with the debtor; or
(b) jointly bound or had made a joint contract with the debtor; or
(c) surety or in the nature of a surety for the debtor.