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Personal Insolvency

If your monthly Income is lower than your expenses (cash flow Insolvent), a Personal Insolvency or a Debt Management Plan may be the solution to your debt problems.

Personal Insolvency Legislation 2012

The 2012 personal insolvency legislation is lengthy and complex and introduced new arrangements for dealing with personal debts and mortgage debts.

The main features of these  formal arrangements are that they:

· Apply to people with all levels of debt
· Deal with mortgage debts
· Deal with all unsecured debts
· Deal with all secured debts, up to the value of €3million

Formal arrangements for dealing with debt

The Insolvency Service of Ireland (ISI) oversee the operation of  the three types of arrangement, which are:

· Debt Relief Notices (DRN) – for debts of up to €35,000 for people with virtually no assets and very low income

· Debt Settlement Arrangements (DSA) – for the agreed settlement of unsecured debts over a period of five years

· Personal Insolvency Arrangements (PIA) – for the agreed settlement of secured debt of up to €3 million (which can be increased by agreement) and unsecured debt over a period of six years

If you are currently in a Debt Management Plan you may be in a position to avail of this  personal insolvency legislation.
Contact UHY Personal and Corporate Insolvency Solutions Limited now for advice on which scheme may suit you.

BANKRUPTCY IN IRELAND

Bankruptcy is the settlement of debts of someone who is wholly or partially unable to repay their debts. The purpose of bankruptcy is to distribute assets fairly among creditors and protect you from the creditors, and any outstanding debt will be written off.

The distribution of assets is done through a court official, the Official Assignee in Bankruptcy. Bankruptcy usually lasts for three years, and depending on your income there may be a payments order of up to five years.

Alternatives to Bankruptcy

Debtors must show that they have made reasonable efforts to avail of a Debt Settlement Arrangement, a Personal Insolvency Arrangement or in the case of debts under €35,000.00, a Debt Relief Notice in order to be eligible for bankruptcy.

Consequences of Bankruptcy

· Your property transfers to the Official Assignee

· You have a duty to contribute from surplus income (income less reasonable living expenses) towards your debts for up to five years

· You are discharged from bankruptcy after three years

· All your debts are written off

Eligibility

· You must be insolvent (you are unable to pay your debts to creditors in full as they fall due)

· You must lodge €200.00 with the Bankruptcy Division of the ISI

· You must swear an affidavit stating that you have made reasonable efforts to make use of the alternative arrangements to bankruptcy such as DSA or PIA to the extent your financial circumstances permit you to.

· You must present a statement of affairs which will set out your financial situation and must disclose that your debts exceed your assets by more than €20,000.00.

You must prepare a petition for bankruptcy in which you must :

· Undertake to attend in person at the Statutory Sitting in court

· Undertake to advertise notice of your bankruptcy adjudication and Statutory Sitting

· Make various statements regarding your Centre of Main Interest, domicile or related matters

Debts that can be included for Bankruptcy

· Personal loans e.g. cash loans, credit card debts
· Business/commercial loans
· Family maintenance payments under court orders
· Revenue debts
· Personal guarantees
· Unsecured portion of property loans
· Trade debts
· Secured debt e.g. mortgage

Debts that cannot be included for Bankruptcy

· Court fines in respect of criminal offences
· New debts incurred by you after the date you were made bankrupt.

For insolvency advice please contact www.uhyinsolvency.ie

Formal arrangements for dealing with debt

· Personal loans e.g. cash loans, credit card debts

 · Business/commercial loans

 · Family maintenance payments under court orders

 · Revenue debts

 · Personal guarantees

 · Unsecured portion of property loans

 · Trade debts

 · Secured debt e.g. mortgage