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PERSONAL INSOLVENCY AGREEMENTS
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WHAT IS PERSONAL INSOLVENCY AGREEMENT?
A Personal Insolvency Agreement, also known as a ‘Part X’ is a legally binding agreement to settle outstanding debts without a person becoming bankrupt. The insolvent individual appoints and negotiates the terms of the PIA with a trustee. the agreement may be to pay off all, or part of, your debts by a lump sum or over a period using instalments.
If the PIA is accepted by the creditors, the individual will avoid bankruptcy. Most unsecured debts will not have to be paid if declared as part of the agreement. Creditors will have the right to recover assets in settlement of secured debts.
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PERSONAL INSOLVENCY AGREEMENTS
Personal Insolvency Agreements have serious consequences that are worth considering before you make any decisions.
Although not bankrupt, entering into a PIA is still an act of bankruptcy. The insolvent individual’s details will be permanently recorded on the National Personal Insolvency Index (NPII) and their personal credit record will reflect the PIA for up to 5 years.
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