There are three types of debt solutions now available under the new Personal Insolvency regime.

1) A debt relief notice (DRN)

A DRN aims to give relief from debt to people who are in debt and have little or no disposable income or assets which they could use to repay what they owe. The qualifying debts they owe cannot exceed €20,000, and the process enables insolvent debtors to write off their debts provided that they are unable to pay for them. A DRN requires the services of an approved intermediary but these professionals have not yet been authorised by the ISI. It is expected that authorisations will be granted later this week.

2) A debt settlement arrangement (DSA)

A DSA only includes unsecured debts without a limit on the amount of debt. However, certain unsecured debts cannot be included and certain other unsecured debts require the consent of the creditor prior to being included. A DSA must be agreed by the debtor and approved at a creditor’s meeting by 65 per cent of creditors (in value).

3) A personal insolvency arrangement (PIA)

A limit of €3 million applies to a PIA, which allows someone to come to an arrangement for their unsecured debt – such as credit cards – over a period of up to six years (and seven in certain circumstances) . Secured debt, such as a mortgage is also eligible for inclusion in a PIA and can be restructured – potentially allowing for a write-down of a portion of negative equity for example .

Shane Dowling, Principal of Direct law, Solicitors in Skerries, with offices in Swords, is qualified to advise on all aspects of personal insolvency. Direct law also offers services including personal injuries, low cost conveyancing, employment law, wills and administration of estates.