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