A Debt Relief Notice (DRN) provides for the write off of qualifying debt up to €35,000, subject to a 3-year supervision period. A Debt Settlement Arrangement (DSA) provides for the agreed settlement of unsecured debt with no limits involved over a period up to 5 years. A Personal Insolvency Arrangement (PIA) provides for the restructuring or settlement of secured debt up to €3m and the settlement of unsecured debt over a period of up to 6 years. In the case of a DSA or PIA, after a Protective Certificate issues, the Personal Insolvency Practitioner (PIP) will have 70 days in which to develop an arrangement.

The ISI's statistics for Q3 2015 issued in October 2015

To Q3 2015 since the ISI was launched, there have been 2,957 applications received for Debt Relief Notices (DRN), Debt Settlement Arrangements (DSA) and Personal Insolvency Arrangements (PIA) and there was 458 in Q3 2015. The percentage of debt written off under DSA's and PIA's was:-

• PIA - secured debt - average write off was 19.7%
• PIA - unsecured debt - average write was 83.7%
• DSA - unsecured debt - average write was 80.1%.

In 85.3% of the DSA cases and 73.3% of the PIA cases, there was a successful outcome i.e. creditors reached a settlement agreement with the debtor or alternative solutions were reached. The largest creditors to oppose PIA arrangements in Q2 2015 were:-

1. Pepper Finance in 7 cases,
2. AIB Bank in 6 cases,
3. Permanent TSB in 6 cases, and
4. Ulster Bank in 5 cases.

The types debt involved in the 458 cases in Q3 2015 was €186m:-

• Principal Private Residence debt/mortgages                     - €75.259m
• Buy-to-Let debt                                                                            - €54.903m
• Loans owed to financial institutions                                      - €44.46m
• Credit Unions                                                                                 - €3.357m
• Trade creditors                                                                              - €1.374m
• Revenue debt                                                                                - €1.341m
• Other (*)                                                                                          - €5.281m

(*) Other debt included connected creditors, contingent debt, hire purchase, personal guarantees, utilities, store cards/catalogues and professional fees. The number of bankruptcies for 2014 was 448 as opposed to 357 for Q1 to Q3 in 2015.  While there were 83 bankruptcy cases in Q3 2015, the amount involved was €129m which is €1.55m per case on average and the debt involved was 83.2% secured and 16.8% unsecured. The DSA and PIA arrangements are still being supported by creditors in over three out of every four cases which is positive development from a debt resolution point of view. It would appear that size of the bankruptcy cases have fallen but the new enactment to a 1-year period of bankruptcy may see a higher uptake going forward.

What questions do you have?

We are happy to help. Please post your comment below or call Paul Leonard, Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: pleonard@cooneycarey.ie

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