If you are a creditor in a personal insolvency agreement (PIA), there is some important information you should know. Your rights and responsibilities as a creditor may change.
A trustee manages the PIA and ensures all parties meet the terms of the agreement. The trustee is also responsible for providing payments to creditors.
What is a personal insolvency agreement?
It is a binding agreement between you and the person who owes you money (the debtor). Both parties agree on a sum of money. These agreements can be a flexible way for people to settle their debts.
Confirm someone is in a personal insolvency agreement
If you want to confirm someone is in a PIA contact the trustee. If you don’t know who that is, ask the person in the agreement for the trustee’s details.
If you are unable to obtain the trustee details, you may wish to complete a Bankruptcy Register Search.
What happens now?
Being an unsecured creditor means your debt isn't tied to a particular asset. If you're an unsecured creditor, you must comply with the terms of the agreement. This applies to you even if you voted no to the agreement proposal.
If you are a secured creditor (meaning your debt is tied to a particular asset - e.g. house or car), the PIA does not affect your rights to deal with the secured goods. You are still able to repossess and sell the goods if the person in the PIA doesn't maintain repayments.
Can I pursue payment?
In most cases, you can no longer pursue the person for the debt, however there are some exceptions.
For more information on unsecured debts and whether they are provable[?] and/or extinguished[?], please see: Creditor’s quick guide - bankruptcy and unsecured debts.
Note: The types of debts that are provable in a PIA are the same as those in bankruptcy.
For further information about how the PIA will impact you as a creditor:
- contact the trustee
- seek your own advice from an accountant or solicitor.
For help with varying or terminating (setting aside) a PIA: Official Receiver Practice Statement 4 - 'Setting up a PIA'.