Personal Insolvency Arrangements In Ireland

20th March 2014

Over the last few months we’ve written here a couple of times about the introduction of new debt solutions in Ireland. Until recently if you had a debt problem and you were resident in Ireland there was little that you could do about it. This has changed with the introduction of three new debt solutions and also changes to the way that bankruptcy operates there.

For readers in Scotland perhaps the most interesting of the three new options is the Personal Insolvency Arrangement. At first sight it might seem as though this works like a Scottish protected trust deed. It provides protection from your creditors, will often deliver a write-off of a proportion of your debts, and requires you to pay over your disposable income for a period of time by way of a compromise with your creditors.

Where the PIA diverges from a trust deed most significantly is the type of debts that can be included. You can include all of the usual unsecured debts such as bank loans, credit union loans and credit cards. However there is also scope to include secured debts, such as your mortgage for example.

Ireland has experienced a mortgage crisis. A significant proportion of mortgages have high levels of arrears. A very high number of homes are in really substantial negative equity. People were freely able to borrow huge sums for mortgages that are now secured on properties worth much less than was paid for them.

This new form of personal insolvency in Ireland can address this issue flexibly. For example, an individual trapped with massive negative equity in their home might be able to have a percentage of their mortgage debt written off by a Personal Insolvency Arrangement. Alternatively, an individual who could repay their mortgage if only it were restructured to be cheaper each month could incorporate that into a PIA proposal.

The aim in all instances will be to restore financial stability today, and to ensure that the individual has once again become financially solvent when they reach the point of being discharged from the arrangement.

Some of our team have been involved in producing a new website that focusses upon this particular debt solution in more detail. For example, you can learn more about exactly what a PIA is at: 

Like Trust-Deed.co.uk, this new website also includes a forum to enable people to ask experts questions, get advice and to share information. We’re hopeful that this personal insolvency arrangement forum will, over time, become as useful and helpful to Irish visitors as the forum based within this website has become.

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