Personal Insolvency Agreements
A Better Way to Manage Debt with a Personal Insolvency Agreement
If you are feeling stressed because you can not keep up with your debt payments, you are not alone. Many Australians face this problem at some point in their lives. A Personal Insolvency Agreement (PIA) is a formal way to deal with your debts without having to go bankrupt.
Clare Corrigan is a trusted personal insolvency expert based in New South Wales. She helps people like you find practical and respectful solutions to financial problems, including setting up a PIA.
Insolvency Made Simple
What Is a Personal Insolvency Agreement?
A Personal Insolvency Agreement (PIA) is a legal agreement between you and the people or companies you owe money to (your creditors). Instead of paying all your debts in full, you agree to pay back what you can afford over time, usually through regular payments, a lump sum, or by selling some of your assets.
Once the agreement is in place, creditors must stop chasing you for money, and most of your debts will be cleared once the agreement is finished.
Benefits of a Personal Insolvency Agreement
Single Monthly Payment
Instead of juggling multiple debts, you will make just one regular payment. This makes it easier to manage your money and stay on top of your commitments.
Lower, Affordable Repayments
You will agree to a repayment plan based on what you can realistically afford. No more unmanageable bills, just a fair amount that fits your budget.
Reduced Overall Debt
Part of your debt may be written off. Creditors often accept a lower amount so you can repay what you can manage, helping you become debt-free faster.
No More Interest on Unsecured Debts
Once your PIA begins, interest on your included debts is paused. This means your debt won’t keep growing, giving you room to breathe.
Finish Repayments in 3–5 Years
Most PIAs are completed within five years. Once finished, you are free from the included debts and can move on with your life.
Avoid Bankruptcy
A PIA is a smart way to deal with serious debt without going bankrupt. It helps you avoid losing control of your finances and the long-term impacts of bankruptcy.
Keep Important Assets
Depending on the terms of your agreement, you may be able to keep key assets like your home, car, or tools needed for work.
Protect What Matters
Unlike bankruptcy, where assets are often sold off, a PIA can offer better protection of your personal and business property.
Flexible Payment Options
You can pay off your debt through regular installments, a lump sum, or by selling assets, whatever works best for your situation.
Work Out a Fair Deal with Creditors
You get the chance to propose a realistic offer to your creditors. This can lead to better terms and a more cooperative approach to clearing your debt.
Stay in Control of Your Finances
Unlike bankruptcy, where a trustee takes over your affairs, a PIA allows you to keep managing your money while meeting your obligations.
Stop Creditor Pressure
Once the agreement is in place, creditors must stop contacting you or taking legal action. This brings immediate relief from stress and harassment.
Only Majority Creditor Approval Needed
Not every creditor has to agree. Your proposal is accepted if most creditors (more than 50% in number and 75% in value) vote in favour.
Better Outcome for Creditors Too
Creditors often prefer a PIA over bankruptcy, as they may get more money back. This increases the chances of them accepting your proposal.
You are Released from Debt at the End
Once you complete the agreement, your obligations under the PIA are over. The debts included in the agreement are wiped clean.
Professional Payment Management
All payments to creditors are handled by the administrator of the PIA which I can be appointed. This makes the process smoother and more reliable.
Important Things to Know About a Personal Insolvency Agreement (PIA)
It Affects Your Credit File
A PIA will appear on your credit report and be listed on the National Personal Insolvency Index (NPII) for a minimum of five years. This may impact your ability to obtain credit during and after this period.
Not All Debts Can Be Included
Certain debts cannot be included in a PIA. These may include court-imposed fines, child support payments, and government student loans such as HECS or HELP debts. You will still need to repay these separately.
Joint Debts Are Only Partially Covered
If you have a loan or credit account with someone else, your PIA only covers your portion of the debt. The other party remains fully responsible for their share.
Possible Work and Business Restrictions
Some professions and industries may have rules about insolvency agreements. This is especially relevant if you work in finance, law, or government positions, or if you hold certain licenses.
You Must Stick to the Repayment Plan
It’s important to make your payments on time and follow the terms of the agreement. If you fail to meet your obligations, your PIA could be terminated, and bankruptcy may become the next option.
It Affects Your Credit File
A PIA will appear on your credit report and be listed on the National Personal Insolvency Index (NPII) for a minimum of five years. This may impact your ability to obtain credit during and after this period.
Not All Debts Can Be Included
Certain debts cannot be included in a PIA. These may include court-imposed fines, child support payments, and government student loans such as HECS or HELP debts. You will still need to repay these separately.
Joint Debts Are Only Partially Covered
If you have a loan or credit account with someone else, your PIA only covers your portion of the debt. The other party remains fully responsible for their share.
Possible Work and Business Restrictions
Some professions and industries may have rules about insolvency agreements. This is especially relevant if you work in finance, law, or government positions, or if you hold certain licenses.
You Must Stick to the Repayment Plan
It’s important to make your payments on time and follow the terms of the agreement. If you fail to meet your obligations, your PIA could be terminated, and bankruptcy may become the next option.
Who Can Apply for a PIA?
To apply for a Personal Insolvency Agreement, you must:
- Be unable to pay your debts when they are due (insolvent)
- Live in Australia or have a connection to Australia
- Not have done a similar agreement or gone bankrupt in the last 6 months
- Be willing to work with a Registered Trustee who will help manage the process
Clare Corrigan will check your situation and let you know if a PIA is the right fit for you.
Personal Insolvency Agreement Process with Clare Corrigan
- Free Initial Chat
Clare will talk with you about your financial situation, explain your options, and answer your questions. - Preparing Your Proposal
If a PIA is the best option, Clare will help you put together a payment proposal to offer your creditors. - Creditor Meeting and Vote
Creditors will review your proposal and vote. The PIA goes ahead if it is accepted by most of your creditors (in both number and value). - Agreement Starts
Once accepted, your creditors can not chase you anymore. You start making the agreed payments. - Agreement Ends
Once you have made all the payments, your included debts are legally cleared.
Frequently Asked Questions
A PIA is a legally binding agreement between you and your creditors to settle your unsecured debts. It allows you to repay what you can afford, either through regular payments, a lump sum, or asset sales, without going bankrupt. Once the agreement is completed, you are released from the debts included in the arrangement.
A PIA is seen as a more flexible alternative to bankruptcy. It allows you to keep control over your financial affairs and, in some cases, retain certain assets. Unlike bankruptcy, which can last up to three years and carry serious restrictions, a PIA typically runs for 3 to 5 years and carries fewer limitations on employment, travel, and asset ownership.
To be eligible, you must:
- Be unable to pay your debts as they fall due (insolvent)
- Have no current debt agreement or undischarged bankruptcy
- Be living in Australia or have a residential or business connection here
You will also need to appoint a registered trustee who will assess your situation and help prepare your proposal to creditors.
Most unsecured debts can be included, such as
- Credit cards
- Personal loans
- Overdrafts
- Utility bills
- Payday loans
However, some debts cannot be included, such as
- Court fines
- Child support
- HECS/HELP debts
- Debts secured against assets (like mortgages or car loans)
Your payments are based on what you can reasonably afford after covering essential living expenses. The terms can include regular installments, a one-off lump sum, or payments from the sale of assets. The goal is to offer creditors a fair return while allowing you to manage your finances.
Yes. Once the PIA is accepted, your creditors must stop any legal action or collection efforts. All communication and payments go through the trustee managing your PIA. This provides relief from stress and harassment.
Yes, a PIA will be listed on your credit file for five years and on the National Personal Insolvency Index (NPII). This may affect your ability to get credit in the future. However, it shows you have taken steps to deal with your debts responsibly, which can be viewed more positively than ongoing defaults or bankruptcy.
Missing payments or failing to meet your obligations may result in the PIA being cancelled. If this happens, your creditors can resume legal action or even push for bankruptcy. If your circumstances change, it's important to speak with your trustee early; there may be options to vary the agreement.
Yes, depending on your agreement and your equity in those assets. Unlike bankruptcy, a PIA can allow you to keep certain assets if your creditors agree to the proposal terms. Your trustee will work with you to structure a plan that suits your financial situation and considers what assets can be retained or sold.
Your PIA is managed by a registered trustee, such as Clare Corrigan, who will assess your financial situation, propose a repayment plan, and handle all communication with creditors. Once the PIA is in place, the trustee receives your payments and distributes them fairly among your creditors.
Why Choose Clare Corrigan?
Supportive and Easy to Talk To
Clare understands how stressful debt can be and always treats clients with respect and care.
Professional and Experienced
With years of experience in personal insolvency, Clare will guide you through each step with confidence.
Clear Advice You Can Trust
You will get honest advice, so you know exactly where you stand.
Contact Clare Corrigan today for a confidential, no-obligation chat.
Take the First Step Towards Financial Freedom If debt is taking over your life, you do not have to face it alone. A personal insolvency agreement may be the right way forward.