Take Back Control With A Personal Insolvency Agreement
Ease Your Debt Burdens & Avoid Bankruptcy
You may be able to take advantage of a Personal Insolvency Agreement (“PIA“) before considering bankruptcy.
If you have an overwhelming amount of debt and are considering bankruptcy, first you should consider whether a PIA is a more suitable option for you!
A PIA is one option when you find yourself suffering from financial hardship and you wish to avoid bankruptcy. With a PIA, you put forward a proposal with your creditors in satisfaction of those debts.
The Personal Insolvency Agreement Process
Appointment of Trustee
If you decide that a Personal Insolvency Agreement is right for you, you will need to provide authority to your controlling Trustee who will be assisting you throughout the process.
Receive Tailored Solution
Your Controlling Trustee will work closely with you to review your assets, income and liabilities to produce a report with a personalised recommendation and proposal for your creditors.
Take Back Control
If your creditors accept the proposal you will have successfully achieved a legally binding agreement that will help relieve stress and move you forward with your finances.
Joshua operates a security company and has amounted debts of approximately $800,000 that he can no longer manage.
Josh has personally guaranteed some of the company debts and the tax office has indicated that a director penalty notice is likely to be issued. Josh is concerned for his personal and family circumstances, if he does not resolve his debts.
Joshua has a joint family home and also an investment property (in his name only) with a total equity of $350,000. He also earns $100,000 gross income a year.
Joshua wants a solution that retains his family home and can maintain an sustainable income.
Whilst Joshua would be unable to manage the company whilst undertaking this process, he was able to put his company on hold for a short period of 3 months without too much disruption. He was happy to utilise the investment property net sale proceeds for the benefit of his creditors plus was able to offer an extra lump sum over three months (provided by close family).
We arranged all the paperwork including a Deed for his proposal, reported to creditors and convened the meeting, a process that took 30 days. We were able to put forward a favourable proposal to creditors explaining that the timing, costs and value of the proposal were more beneficial compared to a bankruptcy scenario. The creditors accepted the proposal and within three months the PIA was completed.
Josh was able to save over 50% of his debts and did not have to go bankrupt to save those costs
Kept His Family Home
The proposal did not include his family home as such, Josh was able to retain his home.
Reclaimed His Life
With Joshua’s debts back under control there were no more hassles from creditors and he could start fresh with family and business.
You're In Safe Hands
At Revive Financial, we care about the stress and impact being in debt has on your wellbeing. We want to help you take back control with no judgement, just a helping hand.
Revive Financial is proudly Australian owned and lead by a team of Chartered Accountants. Our qualified team have been helping Australians become debt free since 2005.
Our dedicated team have been trusted by over 10,000 Australians to help take back control of their financial futures. It's what we do best so you can rest assured.
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Frequently Asked Questions
What are the benefits of a PIA?
The benefits of a PIA are:
- Avoid bankruptcy,
- Timeframe; can take three to six months compared to a bankruptcy which lasts for at least three years;
- Released from your unsecured debts;
- Certain assets not required to be sold, which would otherwise be sold in bankruptcy;
- Some of the restrictions in bankruptcy does not apply, including restrictions relating to travel, trading businesses and incurring debts;
- Investigations into prior asset dealings not pursued which are likely be pursued in a bankruptcy; and
- There is no requirement to pay income contributions under a PIA, which may be required to be paid in bankruptcy.
What are the consequences of a PIA?
The consequences of a PIA are:
- Cannot manage a Company during the PIA process;
- Is an Act of Bankruptcy, therefore, if creditors reject your proposal, you may become bankrupt; and
- Can be more expensive compared to a bankruptcy depending on your situation. Would require an upfront fee.
What do I need to do?
You will need to complete three sets of forms, A Statement of Affairs, A Controlling Trustee Authority and a Draft Proposal. We will assist you with the completion and lodgement of all of these forms.
You will then receive a proposal which will outline the terms and amounts you are offering your creditors including any assets and income. The proposal would need to be in a form of a Deed which we will have a solicitor to draft to ensure proper compliance.
What is a Controlling Trustee and what do they do?
The Controlling Trustee will look into your financial affairs and report to creditors on the benefits of a PIA compared to a bankruptcy and convene a meeting of creditors to vote on your proposal.
The report will detail your assets, income, liabilities and investigations. The report will provide reasons why creditors should accept your proposal and the estimated return to creditors as compared to a bankruptcy scenario.
At the meeting, the creditors will vote on your proposal. For your proposal to be accepted, it must be approved by a majority in number and more than 75% of the value of creditors voting at the meeting.
If the proposal is accepted then it is binding on all creditors and subject to your compliance under the terms of the proposal to avoid bankruptcy. If the proposal for a PIA is not accepted then whilst you will not automatically become bankrupt, it is common (and may be a condition in your proposal) that you would in the future.
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