PERSONAL INSOLVENCY

Personal Insolvency Legislation covers the individual, sole trader and partnership where the person or persons are exposed to excessive bank debts, overextended creditor facilities and/or Revenue liabilities.

Options for individual debt problems include:

Informal Arrangements:

Irish Insolvency Solutions will secure you a negotiator to negotiate with your creditors to arrange alternative acceptable repayment options

Debt Relief Notices (DRN)

Individuals may apply for DRN’s through MABS (Money Advice and Budgeting Services) or FLAC (Free Legal Advice Centres). These are for unsecured debt up to €35,000, they offer 3 year protection through which agreed repayments are maintained – if achieved, the remnant gets written off. This solution is suitable for credit card and unsecured loans up to €35,000. We believe that this process is cost effective and straight forward at MABS or FLAC.

Debt Settlement Arrangements (DSA)

Where there are unsecured debts in excess of €35,000 a DSA may be suitable. The DSA is prepared by a PIP (Personal Insolvency Practitioner) who mediates between debtors and creditors to secure an agreed repayment structure that will last over a term of 5 years. Once maintained and all terms and conditions are met, the debtor(s) will stand discharged from the remnant of debts covered by the DSA, and can look forward to a brighter future.

Debt Settlement Arrangement (DSA) – Brief Guide

Debt Settlement Arrangement (DSA) – Detailed Guide

Personal Insolvency Arrangement (PIA)

Where the debts under pressure include secured debt under €3,000,000 (more in some circumstances) and/or unsecured debt, a PIA is probably the solution needed. A PIP will mediate between debtor(s) and creditors to propose a repayment structure acceptable to all. This PIA would be repaid over a period of six years. When successfully completed, all the unsecured debt remaining is discharged and the secured debt is reduced as agreed in the PIA origin agreement. This frees the debtor(s) to face a certain future free from debt stress.

Note – a PIA does not usually demand the disposal of the family home

Personal Insolvency Arrangement (PSA) – Brief Guide

Personal Insolvency Arrangement (PSA) – Detailed Guide

Note – All debtors availing of DRNs, DSAs or PIAs will be recorded on a publicly accessible register

Mortgage to Rent (MtR)

The Mortgage to Rent scheme is a government initiative to help homeowners who are at risk of losing their home through mortgage arrears. Irish Insolvency Solutions will assist you in investgating if Mortgage to Rent (MtR) is a suitable option for you to alleviate your mortgage arrears and retain your long term accommodation in the home.

Property

Is your property in negative equity or within the limits of positive equity allowed under the scheme? Your property can have marginal equity but must be within the limits for its location as outlined below:

• Cork City, Dublin City, Dún Laoghaire Rathdown, Fingal, Galway City, Meath, South Dublin, Kildare, Wicklow – €50,000
• Carlow, Clare, Cork County, Galway County, Kerry, Kilkenny, Laois, Limerick City and County, Louth, Westmeath, Wexford, Waterford City and County – €45,000
• Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo, Tipperary – €40,000

Is your family home the only property you own?

Are you living in a property that suits your needs i.e. not be over or under-accommodated, in accordance with Local Authority guidelines plus two bedrooms? Where your household is over accommodated (i.e. where you have more than 2 spare bedrooms).

Is the value of your property no more than €515,000 for a house (up from previous limit of €450,000) and €385,000 for an apartment or townhouse (up from previous limit of €335,000) in the areas of Dublin, Kildare, Meath, Wicklow, Louth, Cork and Galway and €395,000 for a house (up from previous limit of €345,000) and €265,000 for an apartment or townhouse (up from previous limit of €230,000) in the rest of the country?

Household

Are you eligible for Social Housing Support in the local authority in whose area the house is located?

Is your income below €30,000*, €35,000* or €40,000* a year, depending on what part of the country you live in? (net household income is the household income after taxes and social insurance (PRSI) have been taken off). (*Additional allowances for children, you can find more information on the website of the Department of Housing, Planning and Local Government- Click Here)

Do you have a long-term right to remain in the Republic of Ireland?

How does it work?

If you are eligible for the scheme :

You voluntarily surrender possession of your home to your mortgage lender who immediately sells it to a provider of the MTR scheme and you will become a tenant.

You will no longer own your property, but you can continue living in your home as a social housing tenant. Your tenancy agreement will be with an Approved Housing Body or your Local Authority depending on who purchases your home.

Benefits of the scheme:

• Peace of mind for you and your family to remain living in your home.
• You pay an income based affordable rent.
• The proceeds of the sale from your home to the housing association will go towards your mortgage debt and your lender will discuss any remaining debt with you.
• Option to buy back your home after a period of 5 years if your situation improves.
• The owner of the property will look after property maintenance issues as set out in your tenancy agreement.

Guide to the Mortgage to rent Scheme (MTR)

Bankruptcy

A process where all of the property or assets and income of an individual who is unable or unwilling to pay their debts, are put under the control of an Official Assignee who takes responsibility for disposing of the person’s liabilities in an orderly fashion. The debtor’s interest in the family home will need to be sold and the proceeds distributed to creditors (after costs, expenses and court fees). In many instances the debtor’s spouse can buy the debtor’s 50% interest in the family home in agreement with the OA. The original term for bankruptcy in Ireland was 12 years but was reduced to 1 year from January 1st 2016 under the 2015 Bankruptcy (Amendment) act.

Bankruptcy Brief Guide

Bankruptcy Detailed Guide

After you are made bankrupt

At Irish Insolvency Solutions: