What is a Personal insolvency agreement (PIA)?

A personal insolvency agreement (PIA) is one of two agreement options available. A PIA, also known as a Part X (10), is a legally binding agreement between you and your creditors.

A PIA can be a flexible way to come to an arrangement to settle debts without becoming bankrupt.

A personal insolvency agreement involves:

• The appointment of a trustee to take control of your property and make an offer to your creditors.
• The offer may be to pay part or all of your debts by instalments or a lump sum.

Other important information you need to know includes:

• There are no debt, asset or income limits to be eligible for a PIA.
• The length of your PIA will depend on what you negotiate with your trustee and creditors.
• You may retain your assets (such as house or car) if the terms of the agreement allow.
• Fees apply to process, propose and manage the agreement. You must speak to a trustee about the fees they may charge.
• You may not be released from all debts, for further information see What does a PIA cover?

Another agreement option that may be available to you is a debt agreement.

For more information see: What is a debt agreement? and Compare the formal options table.

Before entering a personal insolvency agreement

Seek advice

Financial counsellors can help you and are available in every state and territory. Their services are free, independent and confidential. They can provide advice about your financial situation and recommend the best option for you to deal with unmanageable debt. 

To speak with a free financial counsellor contact the National Debt Helpline on 1800 007 007. 

For more information on financial counsellors and other support services see Where to find help.

Know your options

A PIA is just one formal option available under the Bankruptcy Act to manage your debt. Other formal options include temporary debt protection for 21 days, debt agreements and bankruptcy. There are also other options available (such as coming to an agreement with your creditors).
For more information see: What are my options for dealing with unmanageable debt?

Understand the consequences

Entering a PIA may have a serious impact on you. It may affect your employment, ability to get credit and will appear on a public register permanently.
For more information see: What are the consequences of a personal insolvency agreement?

Personal insolvency agreement fees

There are fees to propose, lodge and manage a PIA. The fees between trustees vary, discuss with them what their fees cover before you decide to go ahead. The total set up fee and any ongoing fees should be in your proposal.

How long is the personal insolvency agreement for?

It depends on the agreement you and your trustee negotiate with your creditors. Normally this is when the trustee has made the final payment to your creditors. Contact a trustee to discuss how long the PIA will last.