Debt Settlement Arrangement
Debt Settlement
Arrangement
A Debt Settlement Arrangement (DSA) is a formal debt solution between you and your creditors that allows you to deal with your unmanageable debts by paying off what you can afford, while offering you legal protection.
A Debt Settlement Arrangement is for unsecured debts only. These include credit cards loans, personal loans, store cards, payday loans, overdrafts, catalogues or any debt that is not secured against an asset .When your DSA is accepted, your creditors must cease all recovery against you and freeze interest and charges on your debts.
A Debt Settlement Arrangement will normally last up to 5 years (or 6 years in some cases). During this time the unsecured creditors named in the DSA cannot take any legal or debt collection action against you. In a DSA you make affordable monthly payments usually paid over 5 years 9 or if you can raise the funds, you can propose a lump sum payment towards settling the debts).
A DSA allows you to pay off as much of your unsecured debt as you can, with the outstanding balance after 5 years (or 6 years in some cases) written off. You must apply for a DSA through a Personal Insolvency Practitioner (PIP).
“A PIP is a professional who is licensed by the
Insolvency Service of Ireland (ISI) and is qualified
to put forward your DSA application.”
– Colm Arthur PIP
“I see it as my professional responsibility to explore
all options to restructure your debt with a specific focus
on ensuring that you remain in your family home“
– Colm Arthur PIP
A Debt Settlement Arrangement is only suitable for people with certain circumstances:
- You cannot afford to pay your debts as they fall due.
- You must owe money to at least 1 creditor.
- You will need a surplus income available each month after all expenses (not including your debts).
You will NOT be able to do a Debt Settlement Arrangement if:
- You have gained 25% or more of your unsecured debt in the past 6 months
- You are currently subject of a Debt Relief Notice or have been in the last 3 years
- You are subject of a Debt Settlement Arrangement now or within the past 5 years
- You have been the subject of a PIA before You are currently bankrupt or have been discharged from Bankruptcy in the past 5 years You have been subject of a DSA before (with exceptions)
- You have received a Protective certificate issued in respect of a DSA within the last year.
Here’s how a Debt Settlement Arrangement works/ what you need to know:
- You apply for a Debt Settlement Arrangement through a Personal Insolvency Practitioner (PIP). A PIP is a professional who is licensed by the Insolvency Service of Ireland (ISI) and is qualified to put forward your DSA application.
- You must swear a Prescribed financial Statement (PFS) during this process of application which is drafted by the PIP. All information in the PFS must be true and accurate.
- If the ISI and the court are happy with your application, your PIP gets 70 days to develop a proposal, to be put to your creditors
- You must agree to the proposal.
- Creditors representing 65% of your debt must agree with the proposal
- The ISI and the Court carry out final reviews of your case and you will then get a DSA.
- Your details will be on a public Register of Debt Settlement Arrangements. (it will include your name address, year of birth and date of PIA). Anyone can view the Register. Your details will be removed 3 months after completion of DSA.
- When you have completed your DSA, any outstanding debts will be written off, allowing you to start over debt free.
Examples of Debt Settlement
Arrangement (DSA)
Example 1
- 6-month DSA
- Self-employed business owner
- Married with 3 children and wife works full time
- Unsecured debt of €10.5 million
- No repayment capacity
- €10,000 was realized from a buy to let property
- Write down of debt of €10,490,000.0
- Returned to solvency after DSA
Example 2
- 1-month DSA
- Single lady, lives alone in rented accommodation
- Unsecured debt of €50,000.0
- No repayment capacity due to starting a business
- €5000 made available from a family member
- All debt written off after DSA
- returned to solvency after DSA
- 6-month DSA
- Self-employed business owner
- Married with 3 children and wife works full time
- Unsecured debt of €10.5 million
- No repayment capacity
- €10,000 was realized from a buy to let property
- Write down of debt of €10,490,000.0
- Returned to solvency after DSA
Request a meeting with regarding a Debt Settlement Arrangement (DSA)
