Speak to us today 1300 351 008

Call Us
See Your Options
Personal insolvency (Part X)

Personal insolvency agreements: the Part X option, explained plainly.

A personal insolvency agreement (PIA) is a legally binding agreement with your creditors under Part X of the Bankruptcy Act. It’s run by a registered trustee, not by Debt Negotiators. We explain how it works and how it compares with your other options, and we work with a trustee from our panel of registered trustees if you decide to go ahead.
Answer 9 quick questionsCall 1300 351 008
Fee-based service. Fees are explained before you decide anything.
Good to know before you go ahead
It’s a formal insolvency option and an act of bankruptcy
It’s listed on the National Personal Insolvency Index permanently
It’s on your credit report, usually for up to 5 years, or longer in some cases
You can’t manage a corporation until the agreement is complete
Trustee fees apply to propose, lodge and manage it

Is it right for me? →

LicensedAustralian Credit Licence 390820
Registered with AFSADebt agreement administrator 1403
Since 2009Bankstown-based team
Real reviewsOn ProductReview.com.au
The basics

What is a personal insolvency agreement?

A person is insolvent when they can’t pay their debts as and when they fall due. The Bankruptcy Act sets out formal options for that situation: debt agreements, personal insolvency agreements and bankruptcy.

A personal insolvency agreement, also called a Part 10 or Part X agreement, is one of them. You appoint a registered trustee, who takes control of your property and makes an offer to your creditors. The offer may be to pay part or all of your debts, by instalments or a lump sum.

There are no debt, asset or income limits for a PIA, which is why it’s often looked at when someone is above the debt agreement limits. You may be able to keep assets such as your house or car if the terms allow.

Where Debt Negotiators fits in

Debt Negotiators isn’t a trustee, and we don’t administer personal insolvency agreements. We’re a registered debt agreement administrator.

We look at your whole situation, explain how a PIA compares with your other options and, if it looks worth considering, work with a trustee from our panel of registered trustees who would take it on. The trustee explains their own fees before you sign anything.

Referrals and payments: We work with a panel of registered trustees. If we refer you to one, we may receive a referral payment, and we may charge fees for pre-insolvency work. We’ll tell you about any payment or fee before you decide.

Part IX or Part X?

How a PIA differs from a debt agreement

Both are formal agreements under the Bankruptcy Act, and both are acts of bankruptcy. The rules and consequences are different.
Debt agreement (Part IX)
Debt, asset and income limits set by AFSA apply
Run by a registered debt agreement administrator
Creditors vote by post. A majority by dollar value must accept
Up to three years, or up to five if you own your home
On the National Personal Insolvency Index for a limited time
You can still manage a company
Personal insolvency agreement (Part X)
No debt, asset or income limits
Run by a registered trustee, who takes control of your property
Creditors vote at a meeting, and a special resolution is needed
Length depends on what’s negotiated
On the National Personal Insolvency Index permanently
You can’t manage a corporation until it’s complete
Honest answer

Is a personal insolvency agreement right for me?

A PIA is a serious step with permanent consequences. These are the situations where it’s worth looking at, and where it usually isn’t.
It can be worth looking at when
You can’t pay your debts when they’re due
Your debts, assets or income are above the debt agreement limits
You can offer creditors something, such as regular payments, a lump sum or an asset
You want to deal with your debts without becoming bankrupt
You live in Australia, or have a residential or business connection here
It’s usually not the right fit when
You need to keep managing a company while the agreement runs
You don’t want a permanent public record
The offer and the trustee’s fees wouldn’t be affordable
You’ve proposed another PIA in the last six months
Your main debts aren’t covered, such as fines, HELP or maintenance debts
You’re within the debt agreement limits and a debt agreement would suit

See the alternatives →

Step by step

How a personal insolvency agreement works

1

Answer 9 quick questions
About a minute. Roughly what you owe, who to, and what comes in each week. Start here.
2

We go through all your options
How a PIA compares with a debt agreement, informal arrangements and bankruptcy for your situation. If a PIA looks worth considering, we work with a trustee from our panel of registered trustees.
3

You appoint a controlling trustee
You sign an authority that gives a registered trustee control of your property. The trustee looks into your financial affairs and helps you make an offer to your creditors.
4

The trustee puts the proposal to creditors
The trustee prepares the proposal, sends it to your creditors with their recommendation, and arranges a meeting of creditors, usually within 25 to 30 days.
5

Creditors vote at the meeting
A special resolution is needed: the creditors voting yes must be a majority in number of those who vote, and hold at least three-quarters of the dollar value of the debts voted.
6

If it’s accepted, you keep to its terms
You make the agreed payments to the trustee, who pays your creditors. You’re only released from your debts if the agreement includes a release, so check it does before you sign.
If creditors reject the proposal

You and your creditors are told the outcome, and it’s recorded on the National Personal Insolvency Index permanently.

You can’t appoint another controlling trustee for six months without the court’s permission. Your creditors can continue to recover their debts, and a creditor owed more than $10,000 can apply to the court to make you bankrupt.

The downsides

Consequences of a personal insolvency agreement

These apply to everyone who enters a PIA. Read them as carefully as the benefits.
A PIA is an act of bankruptcy. If it fails, a creditor can apply to the court to make you bankrupt
Your details appear on the National Personal Insolvency Index, a public record, permanently
It appears on your credit report, usually for up to 5 years, or longer in some cases. This affects your ability to get credit
You can’t deal with your property, such as your house or car, without your controlling trustee’s consent
You can’t manage a corporation until the terms of the agreement are finalised
You must help your trustee by providing information and documents when asked
Some professional bodies and statutory positions have conditions while the agreement is in place
You may be able to keep running a business, if the terms of the agreement allow.
What a PIA costs

There are fees to propose, lodge and manage a PIA. They’re charged by the trustee, they vary between trustees, and the set-up and ongoing fees should be set out in the proposal. The trustee’s fees are subject to creditor approval, and a government levy applies to money received in the administration.

Ask the trustee exactly what their fees cover before you sign anything.

Debt Negotiators is a fee-based service. Fees are explained before you decide, and the first conversation costs nothing.

If a PIA isn’t right

Alternatives to a personal insolvency agreement

A PIA is one option among several. These are the others we go through with you, each with its own trade-offs.

Debt agreements (Part IX)
A formal, binding agreement with your creditors to repay an affordable amount over time. We’re an AFSA-registered administrator.
Good to know: it’s a formal insolvency option with debt, asset and income limits, and it’s listed on your credit report and the National Personal Insolvency Index.

Learn more →

Informal arrangements
New repayment terms negotiated with each creditor, based on what you can realistically pay.
Good to know: creditors don’t have to agree, interest may keep running, and it may show on your credit report.

Learn more →

Debt consolidation
One new loan pays out several debts, so there’s a single repayment.
Good to know: lending criteria apply, and a longer term can mean paying more interest overall.

Learn more →

Bankruptcy information
We explain how bankruptcy works and how it compares with the other options.
Good to know: it has serious, long-lasting consequences and is usually a last resort.

Learn more →

Credit file corrections
If something on your credit file looks wrong, we review it and ask for a correction where there are grounds to.
Good to know: correct listings can’t be removed.

Learn more →

Personal insolvency questions

What's the difference between a Part 10 and a Part 9 agreement?

Both are formal agreements under the Bankruptcy Act. A Part 9 debt agreement has debt, asset and income limits and is run by a registered debt agreement administrator. A Part 10 PIA has no limits and is run by a registered trustee. A PIA stays on the National Personal Insolvency Index permanently, while a debt agreement stays for a limited time. More on debt agreements.

Will my creditors accept a personal insolvency agreement?

They don’t have to. Creditors vote at a meeting, and a special resolution is needed: the creditors voting yes must be a majority in number of those who vote, and hold at least three-quarters of the dollar value of the debts voted. You need to disclose your full financial position.

What debts does a PIA cover?

Usually unsecured debts, such as credit and store cards, personal and payday loans, utility, phone and internet bills, overdrawn accounts, unpaid rent, and medical, legal and accounting fees. Tax debts can be included, though the ATO can keep tax refunds. Creditors may still be able to pursue debts incurred by fraud, maintenance debts, court-ordered fines and HELP debts. A joint debt can still be recovered from the other person. Secured debts may not be released.

Can I keep my house and car?

Possibly, if the terms of the agreement allow. While the agreement is in place, you can’t deal with property such as your house or car without your controlling trustee’s consent. Secured lenders keep their right to repossess if repayments aren’t kept up.

How long does a PIA stay on my credit file?

Usually up to 5 years, or longer in some cases. Separately, it’s recorded on the National Personal Insolvency Index permanently.

What is the National Personal Insolvency Index?

It’s a public record of personal insolvency proceedings in Australia, such as debt agreements, personal insolvency agreements and bankruptcies. A PIA, or a rejected PIA proposal, stays on it permanently.

How long does a personal insolvency agreement last?

It depends on what you and your trustee negotiate with your creditors. It usually ends when the trustee has made the final payment to your creditors.

How much does a personal insolvency agreement cost?

There are fees to propose, lodge and manage a PIA. They’re charged by the trustee, vary between trustees, and should be set out in the proposal. Ask the trustee what their fees cover before you sign. Debt Negotiators is a fee-based service. Fees are explained before you decide.

See whether a PIA is worth considering

Answer 9 quick questions, then we call to go through a PIA and the alternatives.
Answer 9 quick questionsCall 1300 351 008
Debt Negotiators is a fee-based service. The information on this page is general and doesn’t take your circumstances into account. Outcomes depend on your situation, and no outcome is guaranteed. Formal options such as debt agreements and personal insolvency agreements can affect your credit report and your ability to get credit. ACL 390820 · AFSA RDAA 1403.
Call Us Now

Talk to us about your options. Debt Negotiators is a fee-based service, and fees are explained before you decide.
1300 351 008

or enquire online now.

Enquire Now

Explore Topics