In April we saw the official launch of the Insolvency Service of Ireland which included the new website www.isi.gov.ie
The ISI will help restore people who are insolvent to solvency in a fair, transparent and equitable way using one of three mechanisms.
Summary of mechanisms:
Arrangement | Type of debt covered | Value | Duration | Apply through |
Debt Relief Notice (DRN) | Unsecured (and secured in certain cases) | Up to €20,000 | 3 years | Approved Intermediary (AI) |
Debt Settlement Arrangement (DSA) | Unsecured | No limit | 5 years (+1) | Personal Insolvency Practitioner (PIP) |
Personal Insolvency Arrangement (PIA) | Unsecured and secured | No limit on unsecured Up to €3m secured (though cap can increase if agreed) | 6 years (+1) | Personal Insolvency Practitioner (PIP) |
Each of the new debt resolution mechanisms has its own rules and procedures but the following main rules apply to all of them:
Limits on usage
You can be involved in only one of the new mechanisms (DRN, DSA or PIA) or in the bankruptcy process at any one time. If you use one of these 4 processes, you will generally have to wait some years before applying to use another.
You may use each of the new mechanisms only once in your lifetime. (There is no such limit on bankruptcy but it would be rare for anyone to go bankrupt twice.)
Provision of information
You will have to complete a Prescribed Financial Statement, giving full and honest information about your financial circumstances. You will have to sign a Statutory Declaration to this effect. You must act in good faith and co-operate fully with the process.
You will have to give your written consent to the accessing of certain personal data held by banks and other financial institutions so that your financial situation can be verified. Government Departments and agencies will have the power to release certain information about you.
Public registers
If you use any of these new mechanisms, your name and details will be published on a register that will be accessible to the public. The success or failure of the process will also be recorded.
Reasonable Living Expenses
The ISI have published a guideline on this. Lorcan O’Connor the Director of ISI stated at the launch -
‘A reasonable standard of living does not mean that a person should live at a luxury level but nor does it mean that people should be punished and live only at a subsistence level. These guidelines are meant to be flexible. They are a baseline for negotiations and discussions’
Click here to view the Guide to Reasonable Living Expenses
Click here to view the Debts Solutions Scenario Pack
When?
Debtors must wait until the end of June before they can apply for any of these arrangements. Applications for the DSA and the PIA must be done through a Personal Insolvency Practitioner (a PIP).
For further information or any questions on the above please contact - Yvonne Barry Advisory Partner, Quintas
