What is a Personal Insolvency Agreement?
A Personal Insolvency Agreement (PIA) is a legal alternative to Bankruptcy that allows a debtor propose a formal arrangement with his/her creditors to discharge the outstanding debts either over time or for a lesser amount.
A PIA is far more flexible and has less restrictions and obligations on the debtor than if a formal bankruptcy was required. Further, a PIA, if agreed, binds all creditors to the proposal and will protect the debtor from bankruptcy provided he/she complies with the terms of the agreement.
A PIA requires creditor approval and will usually operate over a two to five year period.
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