The Insolvency Act will introduce 3 new debt resolution mechanisms to help mortgage-holders and other people with unsustainable debt to reach agreements with their creditors. It will probably be July before anyone can apply for any of these.
The three proposed new mechanisms are summarised below : Click on the links to find out more about each of them
A Debt Relief Notice (DRN) to allow for the write-off of debt (generally unsecured ) up to €20,000, subject to a 3-year supervision period
A Debt Settlement Arrangement (DSA) for the agreed settlement of unsecured debt, with no limit involved, normally over 5 years
A Personal Insolvency Arrangement (PIA) for the agreed settlement of secured debt up to €3 million (though this cap can be increased) and unsecured debt, with no limit involved, normally over 6 years
The Personal Insolvency Act will also introduce automatic discharge from bankruptcy, subject to certain conditions, after 3 years as opposed to 12 years at present.