Am I insolvent?
In relation to the Personal Insolvency Acts 2012-2015 being insolvent is construed as meaning that the debtor is unable to pay his or her debts in full as they fall due.
To be eligible for a Personal Insolvency Arrangement or Debt Settlement Arrangement you need to be insolvent. There are however additional eligibility criteria. Your PIP will assess your solvency and eligibility by reviewing a completed Prescribed Financial Statement and meeting with you to discuss your financial situation.
What is a Personal Insolvency Arrangement?
A Personal Insolvency Arrangement (PIA) is an insolvency solution for people with unsecured and secured debts. Secured debt is a debt backed or secured by an asset (e.g. a housing loan where a house is mortgaged to secure the loan debt).
It is a formal agreement with creditors that will write off some unsecured debt and restructure any remaining secured debt, while keeping the person in their home where possible.
What is a Debt Settlement Arrangement?
A Debt Settlement Arrangement (DSA) is an insolvency solution for people who have unsecured debts – credit cards, loans, overdrafts etc. For mortgage-related debt please see Personal Insolvency Arrangement.
A Debt Settlement Arrangement is a formal agreement with creditors that allows for some write off of debt. With this solution a person agrees to pay a percentage of their overall debt over a specified period of time. At the end of that period of time they will be solvent.
What is a Debt Relief Notice?
If you have a low income, few assets and debts that you can’t repay, then a DRN could be the right solution for you.
It allows for the write-off of qualifying debt up to €35,000 subject to a 3-year supervision period.
We do not provide this service. Please contact your local MABS office who provides this service for Free.
By entering a PIA/DSA will it affect my standard of living?
Generally speaking it will have some impact. It is expected that you would adhere to the terms of the agreement which can last generally up to 6 years. It will impact your ability to obtain new credit. At a minimum, depending on your family circumstances you will be provided with Reasonable Living Expenses (RLEs) as part of the arrangement which can be also varied to take account of any special circumstances.
For more information see our links tab.
Can I have a PIA/DSA if I am self-employed?
Being self-employed is no impediment to having a PIA/DSA. As long as you fulfil the eligibility requirements and have an income that could provide a surplus every month to pay to your creditors you can apply for a PIA/DSA. You will be required to have two years audited accounts and two years of tax returns for supporting paperwork.
Can I have a PIA/DSA if I am unemployed?
Yes you can in circumstances where you might be lucky enough to have third party assistance or assets that can be encashed. On limited income you are unlikely to meet the threshold of reasonable living expenses and as such you would ordinarily not have sufficient funds to pay into an arrangement in order to discharge your PIP fees. Its for this reason a third party or assets sale is needed to generate a sum to pay any fees.
I do not owe my alleged mortgage provider as I did not agree to the Securitisation or the securitisation is illegal?
The insolvency process is not the correct forum to resolve these issues. If you won’t agree to the debt your Creditor is not going to resolve it with you. With such an argument there is likely little basis for moving forward for even an appointment as ultimately we principally get paid once an arrangement is agreed which if this is your reasoning won’t happen.
What we can consider is whether you were charged the correct interest and the Balance is correct. To do so you should ibn advance obtain interest and account audit from a reputable supplier. You need to have this in advance of the protective certificate as there would be insufficient time to resolve it once we have started.
We can also look at Legal Charges incorrectly added on to your account.
Can I Get The Mortgage Debt On My Principal Private Residence Reduced in a PIA?
The aim of the act is to restructure an insolvent debtor’s affairs so that he/she will be cashflow solvent following the arrangement being agreed and to be cashflow solvent at the end of an arrangement. If the debtor and his/her family are living within their means (reasonable living expenditure) and the property is practical and justifiable based on the size and needs of his/her family, the Personal Insolvency Practitioner will review the debtors’ outgoings and may propose that an element of the debt be written off if not to do so could impact on the debtors’ ability to service their obligations as they fall due.
If you are in positive equity you will not get a write off of debt on your family home. Typically, Write Down of Balance is possible in some Negative Equity Cases because the most your Creditor can get back is the value of the property only .i.e. the Security. Any write-down may be subject to a clawback which your PIP will discuss with you.
The Bank and/or Vulture Fund are saying they have strict instructions to repossess my home at the next Court sitting. Am I too late for a PIA?
No. If the PIP agrees to take you the debtor into an arrangement they then can apply to court on your behalf to injunct all legal proceedings against you for at least 70 days (but this can be extended), so that a formal proposal can be put in place to your creditors.
I already have a possession order against me. Am I too late to enter into a PIA?
No. You can still enter the process but must do so swiftly.
I bought a holiday home in Spain, and a ski Lodge in Bulgaria. I can no longer service the debt. Can I include these in part of a PIA?
Yes. You can include all debt in the European Union if you are deemed insolvent and meet eligibility criteria.
How Much will a PIA/DSA cost?
The Price will vary depending on the complexity of your case and your circumstances.
Who pays for this?
If you are eligible under the State funded Abhaile scheme then your initial consultation, assessment and assistance in completing your Prescribed Financial Statement is free. If you are not eligible under the Abhaile scheme, there may be a charge for the initial consultation. For more details on your eligibilty under the scheme see www.mabs.ie.
Our Fees are agreed with your Creditors once the arrangement is approved. The fee is essentially a reduction in the dividend the Creditor can normally expect. The fee comes out of your contribution to the arrangement which used to pay professional services, outlays and your creditors. The fee varies according to the length of the arrangement and the complexity of the case.
Should you have insufficient funds to pay into the arrangement, you will need to generate a lump sum from a third party or we can be paid out of the proceeds of sale of assets.
If you want to exit the arrangement quickly and your Creditor agrees, you are likely to need to be able to pay in a lump sum from a third party to discharge our fee and/por generate a dividend for unsecured creditors.
This sounds great. Can all types of debt be restructured/written off?
What are my options if my PPR Creditor won’t agree to the PIA?
You may be able to appeal the decision to the appropriate court if you are entitled to an appeal. Your PIP will go through that with you. Otherwise, you will now be enabled to go Bankrupt. You should not assume you will lose your family home in Bankruptcy. It is not as draconian as it sounds, and you may be subject to payment orders for either a year or 3 years depending on your circumstances.
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