What are the consequences of proposing a PIA?
Before deciding to propose a Personal Insolvency Agreement (PIA), it is important that you also understand the consequences of entering into one.
Firstly, by appointing a Controlling Trustee, you will commit an Act of Bankruptcy. So if your proposal for a PIA is not accepted by your creditors, they can then apply to court and have you made bankrupt. However, any existing creditor’s petition cannot proceed until the meeting of your creditors has been held and your PIA proposal has been voted on. During the Controlling Trustee period (which lasts for 25 business days) your assets are under the control of your trustee and you cannot deal with them). Read more about what a Controlling Trustee does here.
If your creditors accept your PIA proposal, you will not be able to manage a corporation or act as a company director for the term of your PIA.
A PIA will also be recorded on your credit file for the term of your PIA (ie if your PIA last for 3 years then it will remain on your credit file for 3 years). Unfortunately, it will be recorded on the National Personal Insolvency Index forever but most credit providers only search your credit file.
Debt Free Australia is Australia’s premier provider of Personal Insolvency Agreements. If you would like to talk to someone about setting up a PIA, call us today on 1800 462 767. The telephone call is free and our advice is without obligation.