One of the most frequent questions we get asked is what is the difference between a Personal Insolvency Arrangement (PIA) and Bankruptcy? The core difference is that with a PIA you enter into an agreed payment arrangement over a period of time \u00c2\u00a0with your creditors whereas when you go bankrupt your debts are entirely written off. However with a PIA you can walk away with your reputation intact whereas\u00c2\u00a0when you are put on the bankruptcy list you are on it for life.<\/p>\n
Personal Insolvency Arrangement<\/strong><\/p>\n A PIA is a debt solution for people with secured debt (e.g mortgage) and unsecured debt (e.g credit card debt, term loans, overdrafts, credit union loans).<\/p>\n A PIA is a formal agreement between you and your creditors that will write-off some of your unsecured debt and restructure the remaining debt. In the majority of cases you would be able to remain in your home<\/p>\n Advantages of PIA over Bankruptcy<\/strong><\/p>\n The maximum period for a PIA is 6 years but there is no minimum period, so a PIA can be over and complete after 3 months or 6 months or a year. These quick PIA’s are extremely popular.<\/p>\n Protection from Creditors (during a PIA creditors cannot contact you whereas during a bankruptcy they can continue to call and write)<\/p>\n Disadvantages of a PIA<\/strong><\/p>\n A PIA lasts a maximum of six years whereas\u00c2\u00a0with\u00c2\u00a0Bankruptcy all debts are written off immediately on the day of the Court sitting. This means the stress and misery can be\u00c2\u00a0over after 8 weeks.\u00c2\u00a0People are allowed stay in a modest family home, but not a trophy home<\/p>\n To obtain a PIA you must have an income, bankruptcy does not require an income.<\/p>\n There is always the possibility that your application for a PIA will be unsuccessful and that your creditors may move for you to go bankrupt.<\/p>\n <\/p>\n\n