How Does A Debt Relief Notices (Ireland) Work?

Irish residents who are finding it a struggle to make ends meet can now take advantage of new government backed schemes to give them relief from their debt worries. One of which is a DRN or Debt Relief Notice.

A debt relief notice (DRN) is perfect for people who have less than €20,000 in unsecured debt and do not see themselves as being able to repay those debts. A DRN gives an Irish debtor the opportunity to have his or her debts written off completely after a three-year period of supervision.

A person who gains approval for a DRN will not be able to obtain new credit unless he or she notifies the creditor of the existing DRN. In most cases, lenders will be leery to issue new credit to a person with an active DRN.

Do I Qualify For A Debt Relief Notice?

To qualify for a DRN, the debtor must have a low amount of disposable income. He or she must have €60 or less available to pay bills every month. An attorney can help a person to figure his or her disposable income.

A debtor can calculate this figure by subtracting his or her household and necessity bills from the total income that he or she earns on a monthly basis.

The amount that is left after all the survival bills are paid is called the disposable income. If the individual falls within that range of disposable income, he or she may apply for a DRN through an intermediary that has been approved to provide such services.

If the courts approve of the debtor’s information, they will grant a DRN to that person.

How Long Does It Last?

The individual will be on special supervision for three years. After those three years are over, the person can apply to have all the debts removed. A consumer with an active DRN will not have to make payments on the debts, unless that person’s financial situation changes for the better.

Is It Back By The Government?

The DRN is an insolvency solution that was offered as a part of the Personal Insolvency Bill of 2012 and is therefore backed by the Irish Government. The bill was passed to help Irish residents who were caught up in financial hardships. Several other options are available for Irish consumers because of this bill.

Other types of Irish Debt Help

Several other options are available for Irish consumers who need to get out of debt. A personal insolvency arrangement is an agreement that works best for consumers who have secured debts. Secured debts include those that have automobiles, stocks, homes and other assets as the collateral on the loan.

To apply for a personal insolvency agreement, the consumer has to have at least one secured debt. This solution is only available to a person once in his or her life. Those who apply for a PIA may not be in the bankruptcy process or have an open DRN.

PIAs are excellent for restricting existing debts into an arrangement that an Irish debtor can handle. This type of agreement covers up to €3 million worth of debt, and the consumer can usually clear his or her debts within five or six years.

Debt Settlement Arrangement

A DSA or debt settlement arrangement is an option for debtors who have more than €20,000 in unsecured debt. Those who do not qualify for DRNs can get help by applying for a DSA. The DSA only covers secured debts, but there is no limit to the amount of debt the applicant can have.

To obtain an approval for a DSA, 65 percent of the applicant’s creditors have to agree to the new arrangement that person has offered. Approved DSAs last for five years. However, someone who needs additional time may request another year of repayment.

Choosing the Best Solution

It is important for an insolvent Irish debtor to select the right program to get out of debt. A certified Personal Insolvency Practioner can point a person in the right direction for achieving the best results.

Scheduling a consolation with a practitioner as early as possible increases the chances of a debtor nursing his or her credit profile back to health.

Another option is to speak with an attorney about the debt issues. Either way, being proactive is the best strategy for eliminating debt and returning to a place of financial health.