Unit 3 Hays House
(01) 905 3150
A Personal Insolvency Arrangement (PIA) is a debt solution set up by the Insolvency Service of Ireland (ISI). If your debts include mortgage arrears on your home or on a buy-to-let property - a PIA offers you protection from creditors and a means of becoming solvent.
Like a Debt Settlement Arrangement (DSA) it covers ‘unsecured debt’ (such as credit card debt, loans and overdrafts) so long as it is over €20,000. However, it also covers ‘secured debt’ such as a mortgage debt as long as it is less than €3 million. A PIA also guarantees you a reasonable standard of living, taking account of your personal family circumstances and needs and including an allowance for savings and contingencies.
You apply via a Personal Insolvency Practitioner (PIP) who will deal with creditors on your behalf and negotiate an affordable monthly payment plan to repay a percentage of your debt.
When the PIA ends, normally after up to six years, you will be discharged from all unsecured debt covered by the PIA and secured debt may either be discharged or restructured, putting you on a better and more stable financial footing.
Gather your financial information together and arrange for a consultation with a Personal Insolvency Practitioner who will be able to make an expert assessment of your situation and advise you on the best solution for you. Your PIP will help you to complete a Prescribed Financial Statement - this is a document that provides a comprehensive account of your financial situation including how much you owe and to how many creditors, and also your assets, income and expenditure. Your PIP will also provide you with written details of all fee arrangements and costs involved in entering a PIA. You must consent to the ISI obtaining and disclosing relevant personal data.
Your PIP will apply to court for a Protective Certificate on your behalf - you do not need to attend court. Once this has been granted, you get immediate protection from creditors which means they are prohibited from any further contact with you - so no more letters, calls or visits about unpaid debts. There is a legal standstill period of 70 days during which your creditors cannot take action against you (this can be extended if required) during which your PIP completes details of your Personal Insolvency Arrangement. Your PIP will ensure you are kept informed of progress and consulted throughout.
Your PIP will present the PIA proposal to all your creditors and work on securing their support for your application. You must secure support from creditors representing 65% of your total outstanding debts for your application to succeed. The overall agreement must include the support of creditors representing more than 50% of the value of your secured debt and also more than 50% of unsecured debt. Your PIP will handle all of these negotiations. Statistics from the Insolvency Service of Ireland show that creditors are generally willing to strike deals, with three out of four agreeing to proposals.
Once you have gained sufficient support from creditors for your proposed PIA, your PIP submits the application to court for approval and once this is obtained, it is formally signed off and registered by the ISI and your name is entered on a Public Register.
The PIA can last up to six years but may be extended to seven. As long as you meet the terms of the PIA, after the final payment you are discharged from all of your unsecured debts that were covered by the PIA. For secured debt, you may either be discharged from these debts completely at the end of the PIA, or you may have an arrangement in place with creditors to write down a portion of this debt and to settle the remainder on restructured terms.
For friendly advice on the right solution for you contact Carrington Dean Ireland on 01 905 3150.
No, there is no limit on unsecured debt - there is only a limit on the amount of secured debt covered by a PIA, which is a maximum of €3 million.
The house you live in is considered your ‘principal private residence’ and mortgage debt on this home can be included in a PIA. Your Personal Insolvency Practitioner is empowered by the ISI to ensure as far as is “reasonably practical” that you are not obliged to sell or move out of your home. You are afforded a greater opportunity to protect your home in a PIA than if you have no debt solution in place and mounting mortgage arrears. You should discuss your options fully with your PIP, particularly if you or they have concerns about high monthly running costs associated with your home.
Yes, but only if total secured debt you wish to be covered does not exceed €3 million.
It is possible to keep your car if you need it for business purposes. Your PIP will discuss your situation, and if you have a particularly expensive car with high running costs, may discuss whether it would be better to sell it and replace it with a more affordable model.
The ISI has established guidelines that guarantee people in a PIA a reasonable standard of living for themselves and for their families. You will receive a monthly living allowance that takes into account your personal circumstances and includes money for food, clothing, utility and communication bills, transport, education, health care, childcare and even a modest allowance for savings and contingencies. You have freedom to choose exactly how you spend your allowance each month and you do not have to provide an itemised account for this expenditure.
Yes, you cannot include secured debt amounting to more than €3 million, nor can you include family maintenance payments under court orders or court fines related to criminal offences. There are also some debts which you can only include with the consent of creditors including: state taxes, local government charges, local authority rates and service charges on properties which are run by owner’s management companies. We can provide full details on exclusions.
It can last for any period up to six years, depending on your particular circumstances. It can in some limited instances be extended to seven years.
There is no guarantee that creditors will back your PIA application. However, according to data supplied by the Insolvency Service of Ireland based on applications so far, three out of four creditors are agreeing to proposals. For creditors, the attraction of a PIA is that it provides a guarantee that they will receive a portion of the debts they are owed.
No, it will be removed when the PIA expires and even during the course of the PIA, only limited details are entered on the Public Register. We can tell you more about that.
Your current credit rating is likely to be known to credit rating agencies and existing debts will adversely affect it. Entering a PIA demonstrates your commitment to taking proactive steps to resolve your debt problems. At the end of the PIA you will be in a better position to rebuild your credit score than if you had taken no action as all of the unsecured debt covered by the PIA will be completely written off. In addition, secured debt covered by the PIA will either be written off or outstanding secured debt will be restructured on more affordable terms. However banks and other lenders will make their own lending decisions based on affordability and a complete picture of your financial position and credit score at the time of applying for any new credit or loans.
No, you can only apply for one of the ISI approved personal insolvency schemes at a time and you cannot apply if you are currently bankrupt or have been discharged from bankruptcy in the last five years.
If you don’t keep up payments and you are in arrears for three months, either a creditor or your PIP may apply to court to have the PIA terminated. A PIA is considered to have failed if you are in arrears for six months. When a PIA fails you will no longer be protected from any legal action by creditors and you will be liable for outstanding debt.
Unit 3 Hays House
(01) 905 3150
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© 2017 Carrington Dean (Ireland). All rights reserved.
Carrington Dean (Ireland) Limited is a Limited Company registered in Ireland, registered number 537533
Registered office - Unit 3 Hays House High Street Tallaght , Dublin 24
Peter Dean of Carrington Dean Ireland is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner. Peter Dean is also authorised to act as an insolvency practitioner by Institute of Chartered Accountants in England and Wales.