A Personal Insolvency Agreement (PIA) is like a Debt Agreement in that it is a formal agreement with your creditors and strict application criteria apply.
The reason you may consider a PIA instead of a Debt Agreement is if your income or level of debt exceed the statutory thresholds as explained below:
- income which exceeds $66 284.4 (after tax) or approximately $88,817 (before tax for Australian residents); or
- unsecured debts which exceed $88 379.20.
A PIA is a legally binding agreement with your creditors which they must approve (at least 75% in value and at least 50% in number of creditors who vote on your proposal) . In most cases a PIA will be over a 3 to 5 year period.
We will put your proposal to your creditors and in many cases they will accept to receive something less than full payment. Once approved, you will be protected against any further legal action which they may lead to a Bankruptcy.
The PIA proposal will detail what you will repay to your creditors and it will be based on what you can afford. The interest on your debts is frozen at the time your agreement is accepted. This will enable you to make one single payment each month over the period of your agreement. We will distribute the surplus funds to your creditors after we deduct our fee which will also be approved by your creditors.
If you are seriously considering a PIA, please understand that it is a formal agreement under the A Bankruptcy Act and as such:
- It will be recorded on the National Personal Insolvency Index for life
- It will be recorded on your credit file for up to 7 years (which means you may not be able to obtain new credit for up to 7 years)
Do you qualify for a PIA? Find out by giving us a free call on 1800 98 10 70.
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16/04/10