Part X - Personal Insolvency Agreements

A personal insolvency agreement (PIA) under Part X of the Bankruptcy Act 1966 (the Act) is a flexible way for a debtor to come to an agreement with their creditors to settle debts without becoming bankrupt. There are no income, asset or debt limits.

A debtor must be insolvent to propose a PIA. A debtor must be be present in Australia or otherwise have an Australian connection (eg you ordinarily live in Australia or are involved with a business operating in Australia) for the proposal to be accepted.

A PIA may involve:

• A lump sum payment to creditors via the trustee either from the debtor’s own money or money from third parties (e.g. family or friends) and/or
• An assignment of assets to the trustee to be sold and the net proceeds distributed to creditors or the payment of the sale proceeds of assets to the trustee for distribution to the creditors and/or
• Periodic payments to the trustee to be distributed to creditors