Money Guide Ireland

Proposed new Insolvency laws in Ireland will allow for the full write off of  certain debts under €20,000  with a Debt Relief Certificate or DRC.
The changes are expected to come into force in the first half of 2012.

A Debt Relief Certificate 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 Phone .
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 DRC – the debtor
1)  Cannot have more than  €60  a month disposable income (after payment of normal household expenses and payments in respect of any other excluded debts such as mortgages).

2) Cannot have  assets or  savings worth more than €400.(So homeowners will be excluded) . (Assets do not include:  a) any household equipment such as bedding, clothing and furniture ; (b) tools, books and other items of equipment used by the person in their job or business ; c)  a single car worth less than €1200 )

Applications for a Debt Relief Certificate will be handled by a new body called the Insolvency Service . Applications will have to be made through authorised intermediaries  and will cost €90 . The fee is to pay the Insolvency Service.  (How will someone with serious debts be able to afford this?)

Once a Debt Relief Certificate has been issued by the Insolvency Service- any creditors listed on the  certificate who are owed money cannot  start  any action or other legal proceedings  to recover  the debt.

At the end of a  moratorium period – (expected to be a year) -  the debtor will be  discharged from all the  debts specified in the debt relief certificate (including all interest, penalties and other sums whichmay have become payable since the application date

A person who is granted a Debt Relief Certificate cannot apply for another  DRC for  6 years.  A person can only ever obtain two DRCs in their lifetime.  They will