A Personal Insolvency Agreement (PIA) is a formal alternative to bankruptcy, administered under Part X of the Bankruptcy Act 1966. It enables individuals with significant debt to propose a legally binding arrangement to settle their debts over time, through a combination of asset realisation, contributions, or instalment payments.

The process begins with the individual appointing a registered trustee as their Controlling Trustee. The Controlling Trustee conducts preliminary investigations, calls a meeting of creditors, and provides a report assessing the merits of the proposal. This process is akin to Voluntary Administration or Small Business Restructuring in its structure and timeline.

Key steps include:

• Appointment of the Controlling Trustee and preparation of proposal (typically within 20–25 business days),

• Meeting of creditors to vote on the proposal,

• If approved, the PIA is implemented and the Controlling Trustee becomes the Trustee of the agreement.

To be accepted, the PIA proposal must receive:

• A majority in number and

• At least 75% in value of voting creditors.

If approved, the PIA becomes binding on all unsecured creditors. If rejected, the individual may pursue bankruptcy or negotiate an informal arrangement.

PIAs are often suitable for high-income earners, individuals with complex financial positions, or those wishing to avoid bankruptcy’s long-term impacts. They are particularly useful where assets such as property, businesses, or reputational interests are at stake.

Helios Advisory has extensive experience acting as Controlling Trustees and administering PIAs, guiding clients through each step of the process with clarity, discretion, and compliance.