Get Your Debts Written Off in Ireland

It will soon be possible , under new Personal Insolvency Legislation , to get certain debts of up to €20,000 completely written off in Ireland. From September – people can apply for a Debt Relief Notice  (DRN) and be debt free after 3 years.

Who is Eligible?

Debt Amounts – only debts of less than €20,000 can be covered by a Debt Relief Notice (DRN). If you have bigger debts you need to look into a Debt Settlement Arrangement.

Types of Debts – Debts that can be written off under a DRN  include ; Credit Card Debts, Store Card Debt,  Overdrafts ,  Personal Loans , Credit Union Loans , Utility bills . (All unsecured) .Mortgage debts and other secured debts  are not covered by DRNs

The following type of  Debts can be included in a DRN but only if the creditor agrees:  Taxes, duties, levies  payable to the State ;  Local government charges/rates/household charges  ;  Amounts due to the HSE under the Nursing Home Support Scheme ; Service charges to owner’s management companies  ; Social Welfare Overpayments

Note – Applicants  must not have incurred 25% or more of these debts during the past 6 months

Assets: You are not eligible for a DRN  if you own assets (including property) valued at more than  €400. So homeowners are not eligible for this type of debt relief.

But – these  assets  are not counted :
1 item of jewellery worth  €750 or less
1  motor vehicle worth  €2000 or less
Reasonably necessary household furniture/tools worth less than €6,000

Income Levels– Your monthly Disposable Income needs to be below specified guidelines  – which depend on the size of your household. Disposable Income is defined as Gross Income less :-
Income tax,
Social insurance contributions (PRSI/USC) ,
Reasonable Rent Payments ,
Payments of debts that are excluded from the DRN.

These are some examples of the maximum Income levels for different households that would allow them to be eligible  for a DRN: (This is after payment of Rent)

Single Adult  €1089
Single Parent  + 1 Primary school Aged Child  €1461
Single Parent  + 1 Infant + 1 Preschool Child  €1694
Couple + 1 Primary School aged child €1727
Couple + Primary Child + Secondary Child  €2236
Couple +  2 Secondary School Children  €2439
Couple + 3 Secondary School Children €2949

These amounts are calculated from the ISI reasonable living expenses guidelines for households with a car ( plus the €60 DRN “allowance”) Note : We have included Child Benefit as income because we haven’t reduced the reasonable living expenses to take account of Child Benefit

SO – using an example listed above
A couple with 2 secondary school children who are renting a house for €800 a month would be eligible for a DRN if their net income was less than €2439 + €800  = €3239 a month.
Take out the €260 child benefit – leaving €2979  a  month.
A take home pay of €2979 a month equates to roughly €43000 annual  gross income for a single earner couple.

If this couple have debts of under €20000 they could get  them all written off  in 3 years. (As long as their assets are no more than  €400 plus 1 item of jewellery worth  €750 or less plus 1  motor vehicle worth  €2000 or less , plus household furniture/tools worth less than €6,000)

If someone on a DRN has an increase in  monthly net income of €400 or more; or they  receive a gift or sum of money of €500 or more –  they have to give  50% to the ISI for the benefit of their creditors.

Once a Debt Relief Notuce is issued it lasts for 3 years – none  of the creditors listed in the DRN can  can pursue you for the debts you owe them that are specified in the DRN. At the end of the 3 year period, all debts listed in the DRN will be written off in full.