A Personal Insolvency Agreement is essentially a legally binding payment arrangement, and is very similar to a Debt Agreement. Here at Get Debt Free we would work out what it is that you can comfortably afford to put towards your debts and then put your proposal to your creditors for their consideration. If they accept it, that amount is all you need to pay. Once the period is over and you have paid the agreed amount into it, you are released from your unsecured debts and any remaining amount is written off. Entering into a Personal Insolvency Agreement will put a mark on your credit file for 7 years, but after that time is up you will have a clean slate. A Personal Insolvency Agreement is for people who are unable to do a Debt Agreement because they exceed the income and debt thresholds, but who wish to avoid bankruptcy. To begin the process you would have to appoint a Controlling Trustee, whose job it will be to investigate your financial position and report to the creditors with a recommendation as to whether they would get more out of a Personal Insolvency Agreement or a bankruptcy. Obviously, if there is more to be gained by your creditors in making you go bankrupt, we would not suggest proceeding with a Personal Insolvency Agreement proposal. There is a creditors meeting as part of the process, which is when the proposal is voted on, and this needs to be attended either in person or over the phone, depending on how close you are to the meeting location. If the proposal is accepted by the majority of creditors it becomes legally binding on all of them. A major difference between a Debt Agreement and a Personal Insolvency Agreement is that you need a Registered Trustee to administer a Personal Insolvency Agreement, as opposed to just a Debt Agreement Administrator. Not every company out there has a Registered Trustee on board, so be sure when calling around that the people you are dealing with are going to be able to follow your proposal through from beginning to end. Some places will charge you for the initial work, only to then refer you to another company that does have a Trustee. Alternatively you can deal with us from the beginning as we have a dedicated Personal Insolvency Agreement department and a Registered Trustee on site. Call us today on 1800 98 10 70.