PIA and timing

B

BrokeGuy

Registered User
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Hi there,

I will unfortunately have to go into a PIA. Is there any merit in holding off so to avoid the risk of being a guinea pig and getting a poor deal?

My gut is that those who enter first will be treated more harshly as 2-3 years into this the banks will be so tired of dealing with them that the terms and agreements could be more favourable to Joe Soap.

Dreamland here?
 
It's hard to know.

Getting in early has a few advantages

  • You will be first in the queue. Latecomers could face a delay
  • You may need to go in to pre-empt the lenders taking legal action
Delaying allows you to see how the banks are reacting. It allows the PIP to assess whether there is any point in applying for a PIA for you.
 
I think you make a fair point. You're not the 1st one that I've heard making the point that the "guinea pigs"may be dealt with more harshly.

On the other hand, your PIP should have a good idea in advance of whether the proposed arrangement will be accepted or not. In practice your PIP will have discussed and negotiated with your creditors at length before you get to the voting stage. The voting stage in most cases will only be a formality.
The PIP will know how the creditors are likely to vote even before the creditors meeting is called. If he is getting feedback that the vote will be a "No" the PIP will try to keep the negotiating going until agreement is reached. If the PIP is getting feedback that the vote will be a NO, he's obviously not even going to call the meeting unless of course he's running out of time.

I guess what I'm trying to say is that it shouldn't matter if yours is one of the very first arrangements as long as you have a good PIP on board, who is competent and in control of the situation
 
Hi Dr Debt

When applying for a PIA, the debtor must swear an affidavit that they are insolvent. This will have huge ramifications for the debtor and so the PIP should be pretty sure in advance of this that a PIA will be acceptable to both sides.

The worst outcome must be an affidavit saying one is insolvent and a vetoed PIA.

Although, this might be a necessary step towards bankruptcy.

Brendan
 
What happens if the bank take legal action before we go into the PIP. Currently we are in default with AIB on a rental even though we leave enough there for the interest (they forced capital and interest 2 months ago despite numerous letters from us).

Presumably I will know when/if they go legal and be able to plan accordingly?
 
In general, they will issue legal proceedings which would be frozen by the application for the PIA.

However, I am not sure what happens if they appoint a receiver. If they appoint a receiver, they will probably veto the PIA anyway.
 
Hello Brendan, is it certain that existing legal proceedings to do with the debt would be frozen if the debtor entered a PIA process? Thanks
 
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