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Personal Insolvency Agreements

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Personal Insolvency Agreements (PIA) are a specialised financial solution for insolvent people. They allow you to make an offer to creditors to settle your debts. A PIA can offer an incredible amount of flexibility in what can be proposed.

A proposal may include:

  • a regular payment over a period of time
  • a one-off payment
  • the transfer of an asset to creditors
  • the sale of an asset and the transfer of the proceeds

A typical PIA is a regular payment over 5 years that is lower than your current repayments.

PIA’s in practice tend to be used by people who don’t qualify for a Debt Agreement. Debt Agreements tend to be lower in cost and less complex to set up. Therefore they are typically used by people who:

  • earn more than $86,800.35 per year after tax
  • owe more than $115,733.80 in unsecured debt
  • have more than $115,733.80 in assets

What is the Process?

Solutions2Debt will appoint a controlling trustee to take control of your estate and make an offer to your creditors. The Trustee will oversee the PIA, review the offer and makes a recommendation to creditors that the PIA is in their best interest.

A formal meeting will be called with creditors and the vote on whether to accept the PIA.

Things you should know:

  • PIAs are an “act of bankruptcy”, though not bankruptcy.
  • The PIA will be recorded on your credit history and the NPII
  • A PIA will disqualify you from being a Director of a Corporation and trustee of a trust until the conditions of the PIA are met.

NB: Personal Insolvency Agreements are administered by registered Trustees.


*Figures on this website may change slightly from time to time. Updated 24/06/2019

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