Debt Relief Notices Explained

The  Personal Insolvency laws in Ireland allow for the full write off of  certain debts of up to €35,000 with a Debt Relief Notice or DRN.

A Debt Relief Notice applies  to unsecured debts only – so mortgages will not be covered. It covesr 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   €35,000 subject to a three-year supervision period. It is only available for people with virtually no assets and very little income.

Debts over €35k 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) .

Free Business Accounts
  • 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 .
  • Assets will also exclude one item of personal jewellery to a maximum value of €750 and a motor vehicle up to a value of €5,000.

Applications for a Debt Relief Notice (DRN) will need to be made to the Insolvency Service  through authorised intermediaries  such as MABS.  No fee will be charged by the intermediary.
Applicants for a DRN will be required to complete a Prescribed Financial Statement (PFS).  This is a detailed form to capture all key financial information . Supporting documentation and proof of your financial situation will be required.
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 you recieve a gift of €500 or mor OR your net monthly income increases by €400 or more after you have been granted a Debt Relief Notice, you must surrender half of to the Insolvency Service.

A person can only ever obtain one DRN in their lifetime.

More information can be found here :  https://backontrack.ie/publications/