The new Personal Insolvency laws in Ireland will allow for the full write off of certain debts of up to €20,000 with a Debt Relief Notice or DRN.
A Debt Relief Notice will apply to unsecured debts only – so mortgages will not be covered. It will cover debts such as Bank Overdrafts , Rent, Credit Cards, Personal Loans , Gas, Electricity and Phone .
A DRN will allow for the write-off of debt up to €20,000, subject to a three-year supervision period. It is only available for people with virtually no assets and very little income.
Debts over €20k will be dealt with by a Debt Settlement Arrangement. Mortgage debts will be covered by a Personal Insolvency Arrangement
To be eligible for a Debt Relief Notice – the debtor
1) Cannot have more than €60 a month disposable income (after payment of reasonable household expenses and payments in respect of any other excluded debts).
2) Cannot have assets or savings worth more than €400.(So homeowners will be excluded) . (Assets do not include: · Essential household equipment and appliances and books, tools or equipment needed for employment or business, up to a total value of €6,000 . Assests will also exclude one item of personal jewellery to a maximum value of €750 and a motor vehicle up to a value of €2,000
Applications for a Debt Relief Notice will be made to the Insolvency Service through authorised intermediaries such as MABS. No fee will be charged by the intermediary. There may be a charge from the Insolvency Service.
Once a Debt Relief Notice has been issued by the Insolvency Service- any creditors listed on it who are owed money cannot start any action or other legal proceedings to recover the debt.
At the end of a three year moratorium period – the debtor will be discharged from all the debts specified in the debt relief notice (including all interest, penalties and other sums which may have become payable since the application date). If your net monthly income increases by €400 or more after you have been granted a Debt Relief Notice, you must surrender half of the increase to the Insolvency Service.
A person who is granted a Debt Relief Notice cannot apply for another one for 6 years. A person can only ever obtain two DRCs in their lifetime.
Some more information about Getting Debt Written Off Here – and you might be surprised by the levels of income that people can have and still be classed as eligible for Debt Relief .