Part 10 Personal Insolvency (PIA)
Part 10 of the bankruptcy act is legal process of insolvency without the debtor (you) entering into a full bankruptcy. A personal insolvency agreement (PIA) allows you to come to an arrangement to sell some of your assets to pay a reduced amount toward your debts. You will appoint an administrator to facilitate the sale of assets, who will also arrange a meeting of your creditors to seek acceptance of the PIA.
Under a PIA you may come to an arrangement to pay your debts, without the restrictions of a full bankruptcy.
- Gain relief from your debts
- Ensure a fair distribution to your creditors from the sale of your assets.
- Provide a higher dividend to creditors than what would be available under a bankruptcy.
- Maintain your source of income.
- Avoid the restrictions of bankruptcy.
Throughout the process of establishing a Personal insolvency agreement there are many actions that are determined as an act of bankruptcy by you. This is an important consideration, as if your PIA is rejected any of the creditors can apply for a full bankruptcy as an act of bankruptcy has occurred by you.
You will need to fit into the government requirements for a PIA, which relate to asset value, debt amount, and income. If you don’t fit into a Part 9 debt agreement a PIA would be the next consideration prior to a full bankruptcy.