A shaky economy, unstable job market, necessary expenses that one is ill-prepared for and ballooning debt are just some of the harsh financial realities that people have to face every day. When bills are overdue and there is no other source of funds to pay back debts, there are still other options offered by the government that people can turn to. One of these is the Debt Settlement Arrangement or DSA. Learn how it works, why it may be right for you and how it can help you recover financially and get back on track again.
The DSA is one of the debt resolution options available under the 2012 Personal Insolvency Act. It is applicable only to individuals who have unsecured debts, such as those incurred from bank overdrafts, personal loans, unpaid utility bills, retail expenses and credit cards that amount to over €20,000. The agreement is designed to help individuals who are experiencing financial problems, providing them with the opportunity to settle their debts without having to take any legal action.
Not everyone is qualified to get Irish Debt Help in the form of DSAs. To qualify for the agreement, you must:
Should you decide to apply for a DSA, you will be required to work with a PIP or Personal Insolvency Practitioner. He or she is a representative of the government who is authorised to provide assistance to you. The PIP will review your personal and financial standing to determine if you qualify for the debt resolution scheme. He or she will also discuss with you what your options are based on the information you give.
If you are eligible and wish to go on with the process, the PIP will submit your application for the DSA to the Insolvency Service or ISI, who will verify your financial details and submit your documentation to the Circuit Court or to the High Court depending on the total amount you owe. The court will then issue a protective certificate which will be recorded by the ISI.
The PIP will then help you in preparing a proposal to your creditors and notify them regarding your application for a debt settlement plan. He or she will then call for a creditors' meeting wherein creditors will vote whether they will accept your application or not. The vote of a creditor is proportional to the debt owed to them.
For your proposal to be accepted, creditors representing a minimum of 65% of your debt value must be in favour of your proposal. In case there is only one creditor, he or she merely has to accept or reject your proposal. If your proposal is accepted by your creditors, the PIP will inform the ISI, who in turn will notify the court. In case your proposal is rejected, the DSA process will end and the protective certificate issued by the court will become invalid.
What Types of Debts are Not Allowed Under the Agreement?
Some debts are excluded from the DSA, such as:
There are, however, certain types of debts that are generally considered excluded but may be included provided the creditor agrees. These debts include:
If you complete the DSA process by paying off your debts, your debts will be discharged and you can be solvent once again. Some of the elements of your unsecured debt that are still unpaid will be written off, so you are legally clear of unsecured debts after completion of the plan.
Any debt help Ireland plan has certain restrictions and eligibility requirements that you must meet. If you are currently using another debt resolution process or have already filed for a bankruptcy, you are not considered eligible. You are also disqualified from the agreement if you have completed another program under the Personal Insolvency Act such as a Debt Relief Notice or a Personal Insolvency Arrangement in the last three years prior to applying. If you have filed for a bankruptcy during the last five years, you are also considered ineligible.