07/11/2013

07/11/2013

Get Your Debts Written Off

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 agreement.

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

Once a Debt Relief Notice is issued it lasts for 3 years – none  of the creditors listed in the DRN 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.

Do you have any questions?

Feel free to contact Lisa on +353 (0) 1 677 9000 or by email for a complimentary confidential consultation.

Lisa Byrne is an Assistant Manager in the Audit Division and since she joined the firm in 2004 has gained a wealth of experience in all areas of accountancy and audit. Lisa’s all-round business acumen is further enhanced by her specialisation in the areas of auditing and compliance within the financial services sector. She recently managed the audits of a number of wealth management products for two global banks. Lisa's specialist areas include; Statutory Audit, Independent Mediation, Personal Forensic Investigations, and Personal Injury and Fraud Cases.