Introduction

There are three debt resolution options available to assist homeowners and others with unsustainable debt in reaching settlements with their creditors. People in various situations might use these processes to find diverse solutions. Each alternative for the Personal Insolvency Practitioner has its own set of procedures and rules.

One essential consideration is whether or not your debts are secured. Secured debt is debt that is backed by an asset, such as a mortgage. Credit card debt, loans, and overdrafts are all examples of unsecured debt.

The following are the three debt-resolution options:

• A Debt Relief Notice (DRN) is a legal document that allows you to write off up to €35,000 in debt (usually unsecured, but in some situations secured), with a three-year supervision term.
• A Debt Payment Arrangement (DSA) is a five-year agreement for the agreed settlement of unsecured debt with no limit.
• A Personal Insolvency Arrangement (PIA) is a type of bankruptcy that allows you to agree on a payment plan for secured debt up to €3 million (though this amount can be increased) and unsecured debt with no maximum, usually over the course of 6 years.

The Personal Insolvency Act of 2012 established these procedures, which are discussed in greater detail below.

If you’ve attempted these steps to solve your debt difficulties but they’re not working, you can file for bankruptcy. For persons with debts of more than €20,00, bankruptcy is a legal High Court process. There are insolvency practitioner service providers like the National debt line, Creditfix, and Queries for Stepchange number as these are the best debt solutions providers available.

General guidelines for Personal Insolvency Practitioner

The three debt settlement procedures each have their own set of regulations and procedures, but the following general guidelines apply to all three.

1. Usage restrictions

At any given moment, you can be involved in only one of the three procedures (DRN, DSA, or PIA) or the bankruptcy process. If you use one of these four stages, you’ll have to wait a few years before applying for another. Each of the three treatments can only be used once in your lifetime. (While there is no such thing as a bankruptcy limit, it is extremely rare for someone to go bankrupt twice.)

2. Accumulating debts

While these procedures are being set up, you must not intentionally stop paying (or underpay) your creditors, since this may lead your application to be rejected.

3. Information provision

You’ll have to fill out a Prescribed Financial Statement, which requires you to be completely honest about your financial situation. The Personal Insolvency Act 2012 (Prescribed Financial Statement) Regulations 2014 specify the information that must be included in the statement. You must sign a statement stating that you are acting in good faith and will fully cooperate with the investigation.

You must consent in writing to the access of certain personal data maintained by banks and other financial organizations in order for your financial condition to be confirmed. Certain information about you will be released by government departments and agencies.

You can also read the financial advisory services that one Insolvency practitioner offers.

Registers of the general public

If you use one of these three options, your name and contact information will be published on a public register on the ISI website. The process’s success or failure will likewise be documented.

Notice of Debt Relief

Debt relief is available through the Debt Relief Notice (DRN) process for those who have little or no disposable income or assets and have no hope of repaying their debt in the next three years. If a DRN is awarded to you, it will allow you to write off up to €35,000 in qualifying debt over the course of three years.

Your creditors will be unable to pursue you for payment during this time, but if your financial situation improves during this time, you may be required to pay a portion of your debts. Even if you have not managed to pay anything, all of the debts covered by the DRN will be written off at the conclusion of the three years.

What is the procedure for obtaining a DRN?

Your application must be submitted through an Approved Intermediary (AI) – see the How to Apply section below for further information. This is a person who has been given permission by the ISI to help you with your application. Personal Insolvency Practitioner are good at resolving all the debt-related solutions if you want your debt-related issues to be solved fast.

Arrangement for Debt Settlement

A Debt Settlement Arrangement (DSA) is an agreement between one or more creditors to resolve unsecured debt over a period of 5 years, with a possible extension of 6 years.

If you are not eligible for a Debt Relief Notice due to your income, assets, or debts, you may apply for a DSA. In exchange for a debt reduction, you must be able to make certain payments to your creditors. The DSA is a voluntary agreement that requires the approval of creditors who hold at least 65 percent of your total debt.

You’ll need to go via a Personal Insolvency Practitioner to apply (PIP). This is a professional who has been approved and registered to operate DSAs and Personal Insolvency Arrangements by the Insolvency Service of Ireland (see How to Apply below).

If your DSA has worked well, you will be released from the debts. It is covered at the conclusion of the specified period. This implies that the obligations will be forgiven.

Personal Insolvency Arrangements are the type of personal bankruptcy

A Personal Insolvency Arrangement (PIA) allows for the agreed settlement of secured debt up to €3 million. Which can be extended with the consent of all secured creditors) and an unlimited amount of unsecured debt. A PIA can last up to 6 years, with a possible extension to 7 years if both parties agree.

In the following aspects, the PIA functions similarly to a Debt Settlement Arrangement:

• You must apply through a Personal Insolvency Practitioner (PIP) – read below for more information on how to do so.
• In exchange for a debt reduction, you must be able to make certain payments to your creditors.
• It’s a voluntary agreement that requires the support of creditors. It represents at least 65 percent of your entire debt, both secured and unsecured.
• Furthermore, over 50% of your secured creditors and 50% of your unsecured creditors must vote yes. If a mortgage lender rejects your personal insolvency proposal, you can file a lawsuit to have the decision overturned.

Abhaile, a help and advising program for those insignificant mortgage defaults. It offers free legal assistance to qualifying borrowers requesting a review.

If your PIA was successful, you will be freed from the unsecured obligations. It is covered at the conclusion of the agreed period. The secured debt will only be dismissed to the extent stipulated in the PIA.