Personal Insolvency Bill

New Personal Insolvency  legislation for Ireland was originally  promised by the government before the end of April 2012. It is something that the IMF and EU demanded as part of the bailout agreement. It is finally being implemented in the summer of 2013.

Debt forgiveness has been  discussed many times over recent years – and now this bill will  hopefully help to address some of the  financial difficulties that many people in Ireland are experiencing .

There are going to be three main types of debt settlement systems that will not involve going to court.

1)  Debt Relief Notice or DRN – which will allow for the full write-off of  smaller qualifying unsecured debts of  up to €20,000, after a three-year period.  Applicants will need to be unable to pay the debts because their disposable income is less than €60 a month and their assets and savings are less then €400.  Applicants will have to go through an approved intermediary and  pay a processing fee . See more about Debt Relief Notices here

2)   Debt Settlement Arrangement  or DSA  which caters for the agreed settlement  of larger unsecured debt of €20,001 or more.
It will involve agreeing the repayment of some or all of the debts. At the satisfactory conclusion of the DSA after 5 years, all the  debts covered by it would be discharged in full. A  DSA will have to be prepared by a personal insolvency practitioner.
More details here about Debt Settlement Arrangements

3)  Personal Insolvency Arrangement  (PIA) which is for the agreed settlement of both secured and unsecured debt of €20,001 and over. It allows for  unsecured loans to be completely settled over a six year period.

The treatment of mortgages and other secured loans is more flexible.  They can be settled over a six year period (e.g. where there is a sale of the property) or restructured and continue in existence beyond the six years  period (e.g. write-down of some of the loan principal, or deferred interest )

A PIA also has to be prepared by a personal insolvency practitioner.

Read more about Personal Insolvency Arrangements here .

The option of Bankruptcy will still be available through a legal process BUT  the  automatic discharge from bankruptcy will be reduced  to 3 years instead of  the current 12 years (subject to certain conditions)