Personal Insolvency Agreement (PIA)
A Personal Insolvency Agreement (PIA) is a flexible way for a debtor to come to an arrangement with creditors to settle their debts without going bankrupt.
The debtor appoints a Controlling Trustee to take control of their property and put forward a proposal to creditors. The Controlling Trustee will examine the proposal, make enquiries into the debtor’s financial affairs and report to creditors.
A meeting of creditors will generally be held within 25 business days of the Controlling Trustee’s appointment and creditors will consider and vote on the proposal. For the proposal to be accepted a majority of creditors and 75% of the dollar value of the voting creditors need to vote for the proposal.
If the proposal is accepted, creditors are bound by the terms of the Personal Insolvency Agreement. If the proposal is rejected creditors will either vote in favour of the debtor being made bankrupt or allow the debtor to decide how they solve their financial difficulties.