Personal Law: Bankruptcy - Guides
Bankruptcy
7. The PIA Procedure
Firm / Chambers:
Last updated: 22 Jun 2015
- You must appoint a trustee to take control of your property and submit a Personal Insolvency Agreement (PIA) proposal to your creditors for their consideration.
- A fee is payable upon lodging the controlling trustee authority form with the Australian Financial Security Authority (AFSA).
- The controlling trustee will review your proposal, investigate your affairs and advise your creditors on:
- what they can anticipate to receive under the proposal compared to what they can anticipate if you are made bankrupt; and
- whether the controlling trustee believes your creditors should vote in favour of the proposal.
- A creditors’ meeting must usually be held no more than 25 working days after the appointment of the controlling trustee. Notice of the meeting is published on AFSA’s website.
- Creditors may choose to be represented by a proxy or lawyer and may choose to participate by telephone.
- You must attend the meeting and answer any questions your creditors direct at you unless your controlling trustee permits otherwise.
- At the creditors’ meeting your creditors will consider and vote on your proposal.
- Your proposal is accepted if a special resolution is achieved. This means that the majority in number and more than 75% in value of voting creditors must vote ‘yes’ to your proposal.
- If your creditors accept your proposal they become bound by the agreement.
- The rights of your secured creditors are not affected.
- A trustee is appointed to oversee and administer the agreement. This can be your controlling trustee or another trustee.
- If your proposal is rejected your creditors may vote for you to be made bankrupt and can commence bankruptcy proceedings against you if you fail to take steps towards voluntary bankruptcy.
- If your proposal lapses or is rejected by your creditors you cannot appoint another controlling trustee for six months without the consent of the court.
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