Debt Relief Notices Explained

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 .

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