If you think this is the right option for you, you must appoint a Controlling Trustee (like BT Acumen). The job of the Controlling Trustee is to:
- take control of your assets and property
- investigate your financial circumstances and prepare a report for creditors
- draft a proposal to put forward to your creditors (PIA proposal)
- call a meeting of creditors and negotiate the acceptance of a binding formal agreement for the repayment of your debts, generally for significantly less than the full amount.
During the process, you are obliged to assist your Trustee by providing information and documentation when requested.
Your proposal is accepted at the meeting if creditors representing least 75% of the dollar value of your debts, and the majority of the number of creditors, vote “yes”. Once accepted, all your creditors are compelled to accept the agreement, even those that voted against it at the meeting, and creditors are not able to take any further action to recover their debts while the Agreement is on foot.
The terms and length of time of a PIA are flexible and depend on what you and your Trustee can negotiate with your creditors. It outlines your offer to creditors for paying back your debt and is generally prepared to suit the specific circumstances of an individual. Your offer may include a lump sum payment, instalments payments over time, sale of particular asset, or a combination of any of those. The PIA ends when theTtrustee has made the final payment to your creditors.
What does it cost?
Fees for a PIAs vary according to the complexity of your financial affairs – the more complex, the more expensive the fees. A Controlling Trustee is legally required to undertake extensive investigations into your financial position and provide a comprehensive report about it to your creditors. They must also organize and run a meeting of your creditors. A Controlling Trustee may be remunerated on an hourly basis.
PIAs make up only about 1% of all formal insolvency administrations each year. It is important that you understand the costs and your other options before proceeding.