Introduction to Debt Deals: Personal Insolvency Arrangements & Debt Settlement Arrangements

Debt settlement arrangements are contributory “debt deals” negotiated by a personal insolvency practitioner (PIP) with your unsecured creditors. Creditors aren’t obligated to accept them. You’ll have to be able to contribute towards your debts, usually from surplus monthly income but also potentially through the disposal of an asset. They will usually run for five years. At the end of the period any debts that you could not afford to repay will be written off and no longer exist. Your name will be added to a public register of personal insolvencies.

Personal insolvency arrangements work in a very similar way to debt settlement arrangements, but might also include secured debts such as residential mortgages as well as unsecured debts. They might, for example, be attractive to people trapped with unaffordable mortgage payments or significant negative equity in their home. The aim of the process is to restore you to a position of solvency at the end of the arrangement.

Bankruptcy in Ireland is changing to become much less onerous than it used to be. It will be a three years process rather than twelve years. Applicants will have to find a €650 application fee, but if they have no assets or surplus monthly income to pay over afterwards this will not be a barrier to going ahead. Creditor agreement to bankruptcy is not required. It depends entirely upon the circumstances, but many people will find that their family home is not put at risk provided they keep paying their mortgage. Regular personal possessions and household goods aren’t put in jeopardy, but you should seek advance advice if you own any particularly valuable individual items.

It’s therefore important to seek out personalised one-to-one advice at the earliest stage possible from a suitably qualified and experienced person. Personal insolvency practitioners are professionals with the training to deliver high quality debt advice on all of these debt solution options. The number of PIPs in Ireland is growing rapidly and many will be prepared to offer a free initial consultation.

These options should mean that there is a way for almost everyone that is suffering from unmanageable debt problems in Ireland to get their finances back under control. Much of the decision-making process obviously depends upon the details and circumstances associated with any particular personal scenario. The key message is that people will not have to continue to suffer the negative consequence of debt if they’re prepared to seek advice and to act upon it.

Author – To find out more about personal insolvency arrangements, debt settlement arrangements and other debt solutions which are available for Irish residents, visit our onsite forum or contact us for further information.

 

Tags: Debt settlement, Insolvency, Unsecured debt

Category: Bankruptcy, Debt