Frequently Asked
Questions
Personal Insolvency
Arrangement (PIA)
How do I know if a PIA is the right solution for me?
If you have secured debt (debt backed by an asset such as a mortgage) and unsecured debt (e.g. credit cards, loans and overdrafts) that you cannot repay, a PIA could be the right choice for you. A PIA is a formal agreement with all your creditors that will write off some of your unsecured debt and restructure any remaining secured debt. A key feature of a PIA is that, in the majority of cases, a debtor will be able to remain in their home.
How do I apply for a PIA?
First, arrange to meet with a PIP (Personal Insolvency Practitioner). Part of a network of qualified professional advisors regulated by the ISI, each PIP is an expert in debt advice, so don’t feel embarrassed about your situation; they can and want to help you reach a solution. They will assess your options and prepare a tailored solution that best suits your needs. PIPs are located around the country and their contact details can be found on www.backontrack.ie or by calling the ISI’s information line 076 106 4200.
What should I do to prepare for the meeting?
Start gathering details of your debt – including a list of how much you owe and to whom, details of payments you have missed, as well as details of your income, average spending needs and any assets you may have. Bring these with you to your meeting with the PIP, and he will let you know if a PIA is the right solution for your situation.
What are the costs to apply for a PIA?
Like any other professional providing a service, any PIP fees are usually built into the PIA repayment plan however consultation fees are free if you are eligible under the state funded Abhaile scheme. If you are in arrears on your home mortgage you could be eligible for a free PIP consultation under a State-funded scheme. For more details on the scheme visit www.backontrack.ie
What are the benefits of a PIA for me?
Protection from your creditors The PIP will arrange the PIA for you and negotiate with your creditors on your behalf. This should put an end to any demands from your creditors for unpaid debt – no more phone calls, letters or visits.
Affordable repayments Under the PIA: you may agree to repay a percentage of your overall debts that you can afford in one monthly payment over a given period of time.
No surprise changes: A PIA is a legally binding agreement between you and your creditors; this means that it cannot be changed without the agreement of both parties, so there will be no surprise changes such as additional interest or charges added along the way.
Reasonable standard of living guaranteed: While you are making these repayments, you are entitled to a reasonable standard of living. This includes food, clothing, education, health care and a modest allowance for savings. Under the ISI model, this means a higher standard than merely at a subsistence level, which people often exist on when in debt. You will not be told how you should spend your allocated reasonable living expenses, so you are still in control of your spending.
Peace of mind: Once your final agreed monthly repayment is made and you have kept to the terms of the agreement, your creditors will write off your remaining unsecured debt and what is left of your secured debt will be restructured
What happens if my circumstances change during the arrangement?
If your circumstances change during the term of your arrangement, affecting it either positively or negatively, the PIA can be amended by your PIP as necessary. For example, if you can no longer afford the agreed repayments due to a change in circumstances, your PIP can apply for a change to the arrangement terms. Equally, if your financial situation improves, the terms can be amended. You will have a say in any changes made to the arrangement. You will also participate in reviews of your PIA at least once a year.
How long will the process last?
A PIA can be put in place to cover any period of time up to 6 years. The length of an arrangement is to be agreed by all parties involved and will depend on what is being proposed by your PIP and your personal circumstances. At the end of the process you will be free from your unsecured debt and from your remaining secured debt to the extent agreed under the terms of your PIA. After a PIA you may still have a mortgage, but the repayments will be manageable.
Will I ever be able to get credit again?
If you are currently in arrears on payments this could already be known to credit rating reference agencies. Similarly, when you are struggling to make payments on debts such as your mortgage, credit card, term loan or hire purchase agreement, you may not have the capacity to take on additional debt and this would be evident to the prospective lender. Entering into a PIA should indicate to potential lenders that you are proactively addressing your financial situation, and on completion of the arrangement you will be solvent, with your debts having been restructured with a write-down and/or write-off, which means you could be more eligible to obtain credit in the future. The decision on whether or not to give credit is up to the lender and this is always the case.
Debt Settlement
Arrangement
How do I know if a DSA is the right insolvency solution for me?
If you have unsecured debt such as credit cards, loans and overdrafts, a DSA could be the right choice for you. A DSA is a formal agreement with all your creditors that will write off some of your debt.
How do I apply for a DSA?
First, arrange to meet with a PIP (Personal Insolvency Practitioner). Part of a network of qualified professional advisors regulated by the ISI, each PIP is an expert in debt advice, so don’t feel embarrassed about your situation; they can and want to help you reach a solution. They will assess your options and prepare a tailored solution that best suits your needs.
What should I do to prepare for the meeting?
Start gathering details of your debt – including a list of how much you owe and to whom, details of payments you have missed, as well as details of your income, average spending needs and any assets you may have. Bring these with you to your meeting with the PIP, and they will let you know if a DSA is the right solution for your situation.
What are the costs to apply for a DSA?
Like any other professional providing a service, a PIP may charge a consultation fee to go through your financial situation to determine if you are eligible to apply. After that, any PIP fees are usually built into the DSA repayment plan.
Will I ever be able to get credit again?
If you are currently in arrears on payments this could already be known to credit rating reference agencies. Similarly, when you are struggling to make payments on debts such as your credit card, term loan or hire purchase agreement, you may not have the capacity to take on additional debt and this would be evident to a prospective lender. Entering into a DSA should indicate to potential lenders that you are proactively addressing your financial situation, and on completion of the arrangement you will be solvent, which means you could be more eligible to obtain credit in the future. The decision on whether or not to give credit is up to the lender and this is always the case.
What are the benefits of a DSA for me?
Protection from your creditors. The PIP will arrange the DSA for you and negotiate with your creditors on your behalf. This should put an end to any demands from your creditors for unpaid debt – no more phone calls, letters or visits.
Affordable repayments Under the DSA: you may agree to repay a percentage of your overall debt that you can afford in monthly payments over a given period of time.
No surprise changes: A DSA is a legally binding agreement between you and your creditors; this means that it cannot be changed without the agreement of both parties, so there will be no surprise changes such as additional interest or charges added along the way.
Reasonable standard of living guaranteed: While you are making these repayments, you are entitled to a reasonable standard of living. This includes food, clothing, education, health care and a modest allowance for savings. You will not be told how you should spend your allocated reasonable living expenses, so you are still in control of your spending.
Peace of mind: Once your final agreed monthly repayment is made and you have kept to the terms of the agreement, your creditors will write off your remaining unsecured debt.
If I decide to apply what will happen?
If your circumstances change during the term of your arrangement, affecting it either positively or negatively, the DSA can be amended by your PIP as necessary. For example, if you can no longer afford the agreed repayments due to a change in circumstances, your PIP can apply for a change to the arrangement terms. Equally, if your financial situation improves, the terms can be amended. You will have a say in any changes made to the arrangement. You will also participate in reviews of your DSA at least once a year.
How long will the process last?
A DSA can be put in place to cover any period of time up to 5 years. The length of an arrangement is to be agreed by all parties involved and will depend on your personal circumstances and what is being proposed by your PIP. At the end of the process you will be free from your unsecured debt.
Bankruptcy
What is bankruptcy?
Bankruptcy is a formal High Court insolvency solution for people in debt over €20,000. During the bankruptcy process, the ownership of the person’s property and possessions transfer to the Official Assignee in Bankruptcy to be sold by him for the benefit of those to whom the individual owes debts (creditors).
When the person’s property is sold, the Official Assignee will make sure that the proceeds are shared out among creditors and any outstanding debt will be written off.
Where can I access more information on Bankruptcy?
On the ISI website : After You Are Made Bankrupt
Bankruptcy guides A comprehensive guide is available for download here:
On the ISI website: Detailed Bankruptcy guide Bankruptcy Scenarios 2016
Bankruptcy applications
Bankruptcy proceedings are brought in the High Court. The application for a Bankruptcy Order is filed in the Office of the Examiner of the High Court. Bankruptcy normally lasts for 1 year.
What are the main consequences of Bankruptcy?
- All unsecured debts are written off
- Property and possessions transfers to the Official Assignee (except for essential assets up to a value of €6,000)
- Any surplus income (income less reasonable living expenses) must be contributed towards debts for up to 3 years
- If seeking credit above €650, a person must disclose that they are bankrupt Discharged from bankruptcy is normally after 1 year.
- However, this term could be shorter if settlement with creditors is reached but it could also be extended if a person does not fully cooperate with the process.
Useful Links
Insolvency Service of Ireland
SI information line at 0761064200 or visit www.backontrack.ie
The Insolvency Service of Ireland (ISI) is an independent statutory body which was established on 1 March, 2013. Our objective is to restore insolvent persons to solvency.
MABS – Money Advice and Budgeting Service
The Money Advice and Budgeting Service is the State’s money advice service, guiding people through dealing with problem debt over than twenty years.
MABS runs a Helpline (0761 07 2000, Monday to Friday, 9am to 8pm) and also operates from over 60 locations nationwide. MABS is free, confidential and independent.
We have a proven track record in helping people get back on their feet. All kinds of people, with all kinds of debt, come to MABS.
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