Bankruptcy: Part X Personal Insolvency Arrangements


Part X (Part 10) of the Bankruptcy Act allows a debtor to enter into an arrangement with their creditors to satisfy their debts without being made bankrupt.

This type of proposed arrangement to creditors is called a personal insolvency agreement (‘PIA’).


Personal Insolvency Agreement (PIA)


A PIA is a formal agreement between a debtor and their creditors that sets out how the debtor will satisfy their debts.

Once executed by the debtor and their trustee when creditors have accepted the proposal, it forms a deed.

A debtor may choose to use a PIA to:

  • Get relief from their debts;
  • Ensure fair distribution of their assets to creditors;
  • Provide a higher dividend than would be payable in bankruptcy;
  • Maintain their source of income; and
  • Avoid the restrictions of bankruptcy.

Only property that is included in the personal insolvency agreement is affected so that other property is not available to creditors.

This may also influence a debtor’s choice.

In addition, the debtor is only required to contribute part of their income if the agreement includes terms requiring them to.

When applicable, the debtor will make the same type of contribution out of their income as they would if they were bankrupt.


Contact Us


For more information, contact us at Bambrick Legal today. We offer a free, no-obligation 15-min consultation for all enquiries.

Read more about our Insolvency Law services here.

Related Blog – Bankruptcy & the Family Home

Send us a message

For enquiries, please fill in the following contact form