I'm having trouble paying my personal insolvency agreement

If your circumstances have changed, you may consider varying (changing) or terminating (cancelling) your personal insolvency agreement (PIA).

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Vary a personal insolvency agreement

If you would like to vary the terms of your agreement, make a written request to your trustee.

Your trustee then sends a variation proposal to your creditors. If no creditors object to the proposal in writing, the terms of the agreement will be varied.

If a creditor does object, your trustee may call a meeting of creditors. Creditors may also be able to vary the terms of your agreement by special resolution at a creditor's meeting.

For more information see: About meetings of creditors.

Terminate a personal insolvency agreement

There are multiple ways to cancel (or terminate) your agreement. This can depend on what is in your agreement and your circumstances. The law about setting aside and terminating a PIA can be complex. You may also want to seek legal assistance.

Setting aside an agreement

If you want to cancel your agreement, you must apply to the court to have your PIA set aside. This can be for various reasons, including:

  • The terms of the agreement are unreasonable.
  • There were errors in the process of setting up the agreement.

We, your trustee or your creditors can also apply to the court to set aside your agreement.

A creditors' resolution

Creditors can vote to cancel your agreement by a resolution at a meeting. This may happen if:

  • You are in default. This means that you are not complying with your terms of the agreement.
  • Your trustee agrees that you did not comply with your agreement obligations.

For the cancellation to be effective, it needs to have a yes vote from a special resolution (a majority in number and at least 75% in value) of creditors.

Automatic termination

Some agreements may include specific events that would terminate it. For example, you are unemployed for a certain period. This means if the event occurs during your agreement, we automatically terminate it. You may want to check with your trustee whether you have such an event in your agreement.

Effects of terminating a PIA:

  • Creditors can continue recovery for the payment of debts that you owe (including interest).
  • Creditors can apply to make you bankrupt through court.
  • Information about your PIA will remain on the National Personal Insolvency Index (NPII) permanently.

For more information about how to vary or terminate your PIA see: Official Receiver Practice Statement 4 - Setting up a personal insolvency agreement.