A Personal Insolvency Agreement, or “PIA” is an arrangement with your creditors to settle your debts without becoming bankrupt.
The process involves:
- the appointment of a Controlling Trustee who takes control of your property and to make an offer to your creditors; and
- your offer, which may pay all or part of your debts, either via one lump sum contribution or over a period of installments.
The Controlling Trustee will prepare a report that compares your offer with what may be available in a bankruptcy scenario, such as asset realisations, income contributions and potential recoveries from creditors.
The term of your PIA will depend on the nature of your offer which typically will be discussed in detail with your Controlling Trustee.
A PIA will not release you from debts such as debts you incur by fraud, court imposed penalties, child support and maintenance debts and HECS and HELP liabilities.
For more information on PIAs, please see the following information links prepared by the Australian Financial Security Authority:
To speak with us further regrading whether a PIA may be appropriate in your situation, please contact us on 08 9215 7900 for a cost and obligation free consultation.