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Personal Insolvency Agreement

A PIA is a formal arrangement between a person and their creditors and is an alternative to bankruptcy. A PIA is a legal arrangement between you and your creditors whereby you offer to pay in full or in part by instalments or a lump sum. The offer must be accepted at a meeting of creditors by a special resolution of your creditors.  The Special Resolution requires a yes vote from a majority of creditors who represent at least 75% of the dollar value of the voting creditor’s debts.



Related Links

Bankruptcy Act 1966

Part X Personal Insolvency Agreement Section 187

Current Index Amounts


Frequently Asked Questions About Part X (PIA's)



Are there advantages of doing a (PIA) over bankruptcy?

Please see AFSA's comparison table



Who can be the Administrator?

A registered Trustee can acts as an Administrator. AFSA will only become the controlling trustee in exceptional circumstances (eg. a matter of public interest)



How much will it cost?

This will depend on a number of varying factors. We can help you formulate an offer to the creditors including Trustees fees.



How long does it last?

The period of control will end if:

* creditors resolve that your estate no longer be subject to control

* your offer is accepted by creditors and you execute a PIA

* four months elapse since executing the controlling trustee authority

* the court makes an order releasing control

* you become a bankrupt



What happens if a creditor doesn’t vote at the meeting?

If your proposal is accepted, all creditors are bound by the agreement even the ones who may vote against the proposal.



Am I released from all my debts if I complete the obligations under the PIA?

No not all debts. You are only released from debts that you would have been released from if you were discharged from bankruptcy. You will not be released from debts incurred through fraud, debts under a maintenance agreement or order, fines imposed by a court for breach of a law and HELP debts.



Can creditors who have provable debts still take recovery action?

No. Creditors who have a provable debt are unable to take recovery action while the terms of the PIA are being carried out.



How does my PIA come to an end?

A PIA usually comes to an end when all the obligations of the PIA have been satisfied.

This is usually after the trustee has paid the final dividend to creditors.

You should request a certificate stating that all the obligations under the PIA have been satisfied from your Trustee.



Can the PIA be cancelled once it has been accepted?

Yes. A court may set aside a PIA on the application of the Inspector-General, the trustee or a creditor for various reasons, eg. the terms of the agreement are unreasonable or there were deficiencies in the process of setting up the agreement. A PIA may also be terminated if you are in default with the terms.



Can I keep my house if entering a PIA?

Potentially, yes. You must include details of your house on your statement of affairs, but exclude it from the list of your assets that will be available to your creditors under the PIA. Your controlling trustee will probably bring this to the attention of creditors in his or her report and then it is up to the creditors to take into account when making their decision when voting.



Can I still operate a business?

During the period of a PIA you can't be a director. This is something that will have to be discussed with a Trustee prior to entering into a PIA.



Can I pay creditors differently under a PIA?

Yes; it is up to creditors to determine whether the proposed terms are acceptable. Creditors who are being offered a lower rate of return compared to the other creditors may be less likely to support the proposal.



Will my PIA be made public?

AFSA maintains a website for advertising meetings of creditors, and your name will be published on this website.

Your controlling trustee can choose to advertise the meeting of creditors in a newspaper.



Can the controlling trustee and PIA trustee be the same person?




Can I change my trustee?




Can creditors change my trustee?

Yes. Creditors can pass an ordinary resolution nominating a new trustee and, provided the proposed new trustee consents to act, the new trustee will assume the role of controlling trustee or trustee of the PIA.

The Personal Insolvency Agreement (PIA) or Part X



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