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Personal Insolvency Bill Guide

Personal Insolvency Bill Guide

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Published by KHumphreysTD
A leaflet explaining the provisions of the Personal Insolvency Bill
A leaflet explaining the provisions of the Personal Insolvency Bill

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Published by: KHumphreysTD on May 10, 2013
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09/30/2014

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I have put together a brief guide to the Personal Insolvency Act, an initiative being introduced by government to assist those inmortgage and debt distress and to allow for greater breathing space for both debtors and creditors. The legislation will enhancethe non-judicial methods of resolving debt difficulties.
WHAT IS THE PERSONAL INSOLVENCY ACT?
In the Programme for Government and in the deal with the EU/IMF, the government committed to introducing legislation that wouldaddress the debt crisis affecting so many of our citizens. The Personal Insolvency Act will provide new and more flexible approaches toassisting those in financial difficulty.
WHAT ARE THE MAIN DETAILS OF THE PERSONAL INSOLVENCY ACT?
Minister Shatter has stated that reform of personal insolvency law contained in the Act will involve:
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A Debt Relief Notice to allow for the write-off of qualifying debt up to
20,000
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A Debt Settlement Arrangement for the agreed settlement of unsecured debt over 5 years;
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A Personal Insolvency Arrangement for the agreed settlement of secured debt up to
3 million (though this cap can be increasedwith the consent of all secured creditors) and unsecured debt over 6 years.
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The Act will reduce the time taken to emerge from bankruptcy from 12 years to 3 years.
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The establishment of an Insolvency Service of Ireland to facilitate the non-judicial aspect of debt resolution.
DEBT RELIEF NOTICES (DRN)
Debt Relief Notices will be introduced. Debts qualifying for a DebtRelief Notice are most likely to be unsecured debts. Examplesinclude personal loans, credit cards etc A DRN will be issuedsubject to the following conditions:
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The qualifying debts are
20,000 or less;
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The qualifying debts incurred in the previous 6 months mustnot exceed 25% of the qualifying total.
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Debtors will have a net monthly disposable income of 
60 or less after provision for "reasonable" living expenses andpayments in respect of excluded debts (if any);
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Debtors would hold assets (separately or jointly) to the valueof 
400 or less. There is an exemption from the asset test for essential household appliances, tools, etc. required for employment or business and one motor vehicle up to value of 
1,200.
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Debts excluded from a DRN include: taxes, court fines, familymaintenance payments and service charges arrears.
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A DRN will last for 3 years from the date of issue. At that time(and subject to no other action) the DRN terminates and thequalifying debts are discharged and the debtor will be removedfrom the Register of Debt Relief Notices.
DEBT SETTLEMENT ARRANGEMENT
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Provides for the agreedsettlement of unsecureddebts over 5 years.
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An application for aDSA must be madethrough a personalinsolvency practitioner (PIP) appointed by thedebtor.
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The debtor mustnormally be resident in theState or have a closeconnection.
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Only one application for a DSA in a lifetime is permitted.
A GUIDE TO THE PERSONALINSOLVENCY BILL
Kevin Humphreys TD

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