What Does a Personal Insolvency Practitioner Do, and When Should You Speak to One?
A personal insolvency practitioner is a professional registered with the Australian Financial Security Authority (AFSA) to administer formal debt solutions for individuals under the Bankruptcy Act 1966. Not every practitioner can do the same work. Only a registered trustee can administer a bankruptcy or a Personal Insolvency Agreement. A registered debt agreement administrator can only administer debt agreements.
That distinction matters more than it sounds. The practitioner you speak to first often shapes which options you hear about.
If you are behind on credit cards, tax, personal loans or guarantees and the problem is not getting smaller, this guide explains what a personal insolvency practitioner does, how bankruptcy, Personal Insolvency Agreements and debt agreements differ, what happens when you engage a trustee, and the warning signs that mean it is time to get advice. It is written for individuals and sole traders in Australia.
What is a personal insolvency practitioner?
A personal insolvency practitioner is someone formally registered with AFSA to administer personal insolvency matters. AFSA counts two types: registered trustees and registered debt agreement administrators. At the close of 2024–25 there were 267 registered personal insolvency practitioners in Australia, made up of 212 registered trustees and 55 registered debt agreement administrators (AFSA, State of the Personal Insolvency System 2024–25).
"Personal insolvency practitioner" is the umbrella term. "Registered trustee" is the formal title given to someone approved to administer bankruptcies and Personal Insolvency Agreements. A registered trustee is a personal insolvency practitioner, but not every personal insolvency practitioner is a trustee.
What a registered trustee does
A registered trustee's work usually falls into five areas:
Assessing your position. Reviewing what you owe, what you own, what you earn and which debts are secured, so the options can be compared properly.
Explaining the options. Setting out how bankruptcy, a Personal Insolvency Agreement, a debt agreement or an informal arrangement would apply to your circumstances.
Acting as controlling trustee. Taking control of your property while a Personal Insolvency Agreement proposal is prepared and put to creditors.
Administering a bankruptcy. Dealing with creditors, realising any divisible assets, assessing income contributions and investigating the estate.
Administering a Personal Insolvency Agreement. Collecting the agreed payments and distributing them to creditors under the terms creditors voted for.
A trustee has duties to creditors as well as to you. AFSA describes personal insolvency practitioners as fiduciaries who must act independently and avoid conflicts of interest (AFSA). That is a protection for you: the process has to be run fairly, not simply in favour of whoever calls first.
Registered trustee, debt agreement administrator or Official Trustee: who can do what?
The practitioner's registration decides which formal options they can administer. If you only ever speak to one type, you may only ever hear about one solution.
Registered trustee | Registered debt agreement administrator (RDAA) | Official Trustee (AFSA) | |
Role & Authority | Highly qualified, private insolvency practitioners registered directly with AFSA. (Thyge Trafford-Jones is a registered trustee) | These are private individuals or specialised companies registered with AFSA explicitly to manage formal debt solutions outside of full bankruptcy. | This is the official government body operating inside AFSA. |
Capabilities | They have full legal authority to administer Bankruptcies and Personal Insolvency Agreements (PIAs under Part X). | Their authority is strictly limited to proposing and administering Debt Agreements (Part IX). They cannot administer full bankruptcies or Part X PIAs. | By default, the Official Trustee administers straightforward bankruptcies if a private registered trustee hasn't been appointed. |
Scope | They do not ordinarily manage standard Part IX Debt Agreements. Their involvement is typically required for individuals with more complex financial situations, such as those holding significant assets, company directorships, or business-related debts. | They cater to individuals meeting AFSA’s strict statutory thresholds regarding lower debt amounts, assets, and after-tax income limits. | By law, the Official Trustee does not manage Part IX Debt Agreements. Furthermore, AFSA has an official policy stating it will rarely consent to act as the trustee for a Personal Insolvency Agreement (PIA), reserving that role only for exceptional circumstances of high public interest. |
Typical starting point | Larger or more complex debts, assets to protect, business or guarantee debts | Lower debts and income within AFSA's limits | Straightforward bankruptcies |
Sources: AFSA, State of the Personal Insolvency System 2024–25; AFSA, Setting up a personal insolvency agreement.
The practical point: a debt agreement administrator cannot offer you a Personal Insolvency Agreement, and a debt agreement is only available if your debts, assets and income sit below AFSA's thresholds. If your situation is larger or more complicated than that, a registered trustee is the practitioner who can assess the full range of formal options.
"People often come to me asking whether they should consider bankruptcy. The better first question is what options are actually available, and whether the person you're speaking to can offer all of them. A debt agreement administrator can only propose a debt agreement. That may well be the right answer, but you won't know until someone has looked at the whole position: what you owe, what you own, and whether the underlying problem can be fixed. Once a process has started, changing course is much harder." - Thyge Trafford-Jones, Registered Trustee and founder, TTJ Advisory
Bankruptcy, Personal Insolvency Agreement or debt agreement: how do the options differ?
There are three formal options under the Bankruptcy Act, plus informal arrangements that sit outside it. The right one depends on what you owe, what you own, what you earn and whether the underlying problem can be fixed.
Bankruptcy | Personal Insolvency Agreement (Part X) | Debt agreement (Part IX) | Informal arrangement | |
What it is: | A formal legal process where a trustee takes control of divisible assets and deals with creditors | A binding proposal to creditors to settle debts without bankruptcy | A binding agreement to pay an affordable amount over a set period | A negotiated plan with individual creditors |
Debt, asset or income limits: | None | None | Yes, indexed twice a year | None |
Who administers it: | Registered trustee or the Official Trustee | Registered trustee | Registered debt agreement administrator | You, or a financial counsellor |
Creditor approval: | Not required when you present your own petition | Majority in number and at least 75% in value of creditors voting | Majority by value of creditors voting | Each creditor decides separately |
Typical length: | Usually three years, and can be extended | As set out in the agreement | Set term, generally up to three years | As agreed |
Public record: | Listed on the National Personal Insolvency Index (NPII) | Listed on the NPII permanently | Listed on the NPII (not permanent) | Not listed |
Sources: AFSA, Lodge a PIA proposal; AFSA, I'm having trouble paying my PIA; AFSA, Debt agreements practice guidance.
Bankruptcy
Bankruptcy releases you from most unsecured debts once you are discharged. The trade-off is control. A trustee can sell divisible assets, you may have to make income contributions above a set threshold, and you need your trustee's permission to travel overseas. Some debts are not released, so it is worth checking how your particular debts are treated before assuming bankruptcy will clear them. It also helps to understand the common misconceptions about bankruptcy.
Personal Insolvency Agreement (PIA)
A PIA lets you offer creditors a deal: a lump sum, a payment plan, the sale of certain assets, or a combination. There are no debt, asset or income limits. It can suit people whose debts are too large for a debt agreement, or who have assets or a business they want the chance to keep. It only works if creditors accept it, and secured creditors keep their rights over the property they hold security over. Read more about how a Personal Insolvency Agreement works.
Debt agreement
A debt agreement is designed for people with lower debts, assets and income. You must be insolvent and fall below all three of AFSA's thresholds, which are indexed in March and September each year (for current indexed amounts click here).
Informal arrangements
Not every debt problem needs a formal process. Hardship variations, ATO payment arrangements and negotiated settlements can work where the shortfall is temporary. The free National Debt Helpline (1800 007 007) connects people with financial counsellors who can help with this. An informal plan becomes risky when it only delays the problem while interest, penalties and enforcement action keep building.
When should you speak to a personal insolvency practitioner?
Speak to one as soon as you can see that your debts cannot be paid as they fall due, not when a creditor forces the issue. The earlier the position is assessed, the more options are generally still available.
These are the warning signs that call for advice now rather than later:
You have received a bankruptcy notice. You have a short, fixed period to respond, and doing nothing can lead to a creditor applying to make you bankrupt.
A creditor has started court action or obtained judgment. Once a debt becomes a judgment, the enforcement options open to that creditor widen.
You are paying one debt with another. Using credit cards, buy-now-pay-later or personal loans to meet existing repayments usually means the shortfall is structural, not temporary.
Tax debt keeps growing. Repeatedly renegotiating an ATO payment arrangement can mean the underlying position is not recovering.
A lender is calling on a personal guarantee. If you guaranteed a business debt, the lender may pursue you personally regardless of what happens to the business.
Your home or other secured assets are at risk. Arrears on a mortgage or car finance can move quickly to default and repossession.
You are avoiding the mail. If letters are going unopened, the position is almost certainly moving faster than you can see.
None of these automatically means bankruptcy. They mean the problem needs to be looked at properly, while there is still time to choose a response rather than have one chosen for you.
How does engaging a registered trustee work? A step-by-step guide
Most engagements start with a confidential conversation and only become formal if you decide to proceed. The steps below follow a Personal Insolvency Agreement, the process where the trustee's role is most involved.
Initial confidential discussion. You explain what you owe, to whom, and what has already happened, such as notices, judgments or calls on guarantees. The aim is to understand the position, not to sign anything.
Assessment of your position. The trustee reviews your debts, assets, income and secured liabilities. This is where the options are compared against your actual numbers.
Choosing a path. The trustee explains which options are available and what each would mean for your assets, income, employment and credit record. The decision is yours.
Appointing a controlling trustee. For a PIA, you sign an authority appointing a registered trustee as controlling trustee. Be aware that this is an act of bankruptcy, which a creditor could rely on to apply to court (AFSA).
Report to creditors. The controlling trustee investigates your affairs and reports to creditors, comparing the return under your proposal with what they would likely receive in bankruptcy.
Creditors' meeting and vote. The meeting must be held within 30 business days. The proposal is accepted if a majority in number and at least 75% in value of the creditors voting agree (AFSA).
Signing and administration. If accepted, you and the trustee sign the agreement, and the trustee collects payments and distributes them under its terms.
Completion. Once you meet the agreement's terms, you are released from the debts it covers, as set out in the agreement.
If creditors reject the proposal, they may resolve that you should become bankrupt, or leave the next step to you. Either way, the trustee should have explained that possibility at step 3.
What if you are a sole trader or a company director?
Sole traders and company directors often come to a personal insolvency practitioner for different reasons, and the difference is the legal structure of the business.
Sole traders
A sole trader and their business are legally the same person. Business debts, including tax on business income, are personal debts. That means personal insolvency options apply to the whole position, business and private. A Personal Insolvency Agreement may, depending on the circumstances and subject to creditor approval, allow a viable business to keep trading while the debt is dealt with.
Company directors
A company's debts are generally the company's, not the director's. The exceptions are where most directors get caught:
Personal guarantees on leases, equipment finance or bank facilities.
Director Penalty Notices, which can make a director personally liable for certain unpaid company tax and superannuation.
Loan accounts that may be owed back to the company.
The company's position is dealt with under the Corporations Act 2001 by a registered liquidator. The director's own position is dealt with under the Bankruptcy Act 1966 by a registered trustee. They are two separate regimes with separate registrations.
Why TTJ Advisory holds both registrations
Thyge Trafford-Jones is registered with AFSA as a trustee and with ASIC as a liquidator. That means he can explain, at the first conversation, which regime each part of a director's problem falls under, without guessing at the half outside his registration.
It does not mean one practitioner acts on both sides of the same matter. Professional standards prevent the same practitioner advising a company and its directors personally on their own positions, because a company's liquidator may need to investigate the director. Where both the company and the director need a formal appointment, TTJ takes the appropriate one and refers the other to an independent practitioner early, so nobody finds out months in that their adviser cannot act for them.
How do you check a personal insolvency practitioner before you sign anything?
Check the register first. AFSA publishes lists of registered trustees and registered debt agreement administrators, and anyone can search them (AFSA resource hub). Plenty of "debt help" businesses advertise heavily without being registered practitioners themselves.
Before you commit, ask:
Are you registered with AFSA, and as what? A trustee and a debt agreement administrator can offer different things.
Which options can you actually administer? If the answer is only one, ask who can assess the others.
How are you paid, and by whom? Fees and remuneration should be explained in writing before you sign.
What happens if creditors say no? You should understand the downside before the upside.
Is anyone else involved in referring me? AFSA expects practitioners to stay independent of advisers who send them work (AFSA).
If a practitioner's conduct concerns you, AFSA handles complaints about registered trustees and debt agreement administrators (AFSA).
Frequently asked questions
Is a personal insolvency practitioner the same as a bankruptcy trustee?
A bankruptcy trustee is one type of personal insolvency practitioner. "Registered trustee" is the formal title AFSA gives to practitioners approved to administer bankruptcies and Personal Insolvency Agreements. Registered debt agreement administrators are also personal insolvency practitioners, but they can only administer debt agreements.
Is a personal insolvency practitioner the same as a financial counsellor?
No. Financial counsellors provide free, independent help with budgeting and negotiating with creditors, and many work through the National Debt Helpline (1800 007 007). They do not administer formal insolvency processes. A registered trustee can administer bankruptcy and Personal Insolvency Agreements.
Can I keep my house if I enter a Personal Insolvency Agreement?
It depends on the terms of the proposal and whether creditors accept it. A PIA can be structured to keep particular assets, but secured creditors, including your mortgage lender, keep their rights over their security. If mortgage repayments are not maintained, the lender can still act.
How long does bankruptcy last in Australia?
Bankruptcy usually lasts three years. A trustee can object to your discharge, which can extend the period. Your bankruptcy is recorded on the National Personal Insolvency Index, a public register, and some debts are not released by bankruptcy.
Can I declare bankruptcy myself?
Yes. You can present your own debtor's petition to AFSA, usually online. You can also ask a registered trustee to consent to act, rather than the Official Trustee. Before you do, get advice on whether a Personal Insolvency Agreement or another option would leave you in a better position.
Will bankruptcy or a PIA affect my job?
It can. Some professions, licences and positions carry restrictions for people who are bankrupt or in a Personal Insolvency Agreement, and you generally cannot manage a company while bankrupt. Check with your industry regulator or licensing body before you commit to a process.
How much does it cost to speak to a personal insolvency practitioner?
TTJ Advisory offers a free, confidential initial discussion. If you proceed with a formal process, the trustee's remuneration and costs are set and disclosed under the Bankruptcy Act and its rules, and should be explained to you in writing before you sign.
Key takeaways
A personal insolvency practitioner is anyone registered with AFSA to administer personal insolvency matters: registered trustees and registered debt agreement administrators.
Only a registered trustee (or the Official Trustee) can administer a bankruptcy, and only a registered trustee ordinarily administers a Personal Insolvency Agreement.
Debt agreements have indexed debt, asset and income limits. Bankruptcy and PIAs do not.
A PIA needs a majority in number and at least 75% in value of voting creditors to accept it.
Appointing a controlling trustee is an act of bankruptcy, so the decision should follow proper advice.
Sole traders' business debts are personal debts. Directors' exposure usually comes through guarantees, Director Penalty Notices and loan accounts.
Check the AFSA register and ask how a practitioner is paid before you sign anything.
What to do next
If your debts have moved past the point where the next payment fixes them, the problem is unlikely to resolve itself. That does not automatically mean bankruptcy. It means your position needs to be assessed properly, before another notice or creditor action reduces the options.
Speak with TTJ Advisory for a confidential discussion. An initial conversation can help clarify what you owe, what is at risk and which options may be available to you.
About the author
Thyge Trafford-Jones is the founder of TTJ Advisory. He is a registered trustee in bankruptcy (AFSA registration no. 1582, registered 2015) and a registered liquidator with ASIC. He advises individuals, sole traders and company directors on bankruptcy, Personal Insolvency Agreements and small business restructuring.
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