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 a bankrupt.  This type of proposed arrangement to creditors is called a 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 a 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.

Other factors that may influence a debtor’s choice is that only property that is included in the personal insolvency agreement is affected, so that other property is not available to creditors.  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.

If you are a debtor or know someone that is a debtor that is interested in making a PIA, please contact our office and speak with one of our experienced practitioners today:

  • Call us on 08 8362 5269
  • Email
  • Fill in our enquiry form here
  • Visit our office at 133-135 Rundle Street, Kent Town SA 5067