Personal Insolvency Agreement
If you’re struggling to keep on top of debt repayments, and day-to-day outgoings it is important to act quickly and seek professional advice about how to get on top of your situation, before it’s too late.
In Australia, Personal Insolvency Agreements are a flexible way to do this, and one that can help you avoid entering into bankruptcy, which can last for three years.
Personal Insolvency Agreement Melbourne, Sydney, Perth, Adelaide or Queensland
With a Personal Insolvency Agreement, debtors living in Melbourne or any of the other states and territories such as Sydney, Perth, Adelaide or Queensland, can come to an agreement with creditors to streamline debt into one manageable payment among other things.
Personal Insolvency Agreements may involve:
- Lump sum payments from debitor, significant other, family or friends to pay down debt
- An assignment of assets, to a trustee or financial advisor, to be sold with proceeds paid to the creditors
- Periodic payments to a trustee to be paid to creditors
A business must be insolvent to apply for a Personal Insolvency Agreement. This is defined as someone who is not able to pay down debt and repayments when they are due.
A Personal Insolvency Agreement differs from debt agreements in that there is no income asset or debt limit for debtors who wish to propose a PIA. Companies who enter into an agreement are usually then ineligible from managing corporations, until all aspects of that agreement have been fulfilled.
To carry out a Personal Insolvency Agreement in Australia, a debtor goes through the following steps:
Stage One – debtor appoints a trustee; providing them with a statement of affairs.
Stage Two – controlling trustee makes enquiries about the debtor’s situation and forms a comprehensive report for creditors to ascertain whether PIA or demand for bankruptcy would be more beneficial.
Stage Three – the trustee administers the terms of agreement; which could be short term or span several years and it is the trustees responsibility to ensure debtors comply with the terms of agreement.
It is important to choose the right practitioner to assist you in making arrangements for your Personal Insolvency Agreements, and PIPA promises only reputable practitioners.
Reputable PIPA practitioners can help you devise a PIA to:
- Avoid entering into bankruptcy, which can last 3 years
- Help retain assets and avoid liquidation, unlike with bankruptcy
- Allow debtors to remain exempt from any from travel, business owing and lending restrictions
All of which can be done with no minimum requirements for income contributions.