PERSONAL INSOLVENCY AGREEMENT

CONSEQUENCES OF PROPOSING AND ENTERING INTO A PERSONAL INSOLVENCY AGREEMENT.

A debtor who appoints a controlling trustee commits an 'act of bankruptcy'.
A creditor can use this to apply to court to make the debtor bankrupt if the attempt to set up a PIA fails.
The appointment of a controlling trustee and the setting up of a PIA will be recorded on the National Personal Insolvency Index (NPIL) forever.
Details may also appear on a record held by a credit reporting organisation,m such as Veda Advantage, for up to seven years.
Once a debtor has executed a PIA, the debtor is automatically disqualified from managing a corporation until the terms of the PIA have been complied with.
Once the debtor has appointed a controlling trustee, any existing creditor's petition to make a debtor bankrupt cannot proceed until the meeting of creditors is held to consider the debtor's proposal.
There is a fee and charges upon lodging a controlling trustee authority form. A controlling trustee will charge a fee for examining the proposal, investigating the debtors affairs, holding a creditors meeting and preparing a report to the creditors.
Funds realised by a trustee in an administration are subject to a realisations charge ( a government levy) which is paid by the trustee directly to the government. Any interest earned on the funds realised by the trustee is payable to the government.