A.E.M.A.

Personal Insolvency Bill

This covers the individual, sole trader and partnership where the person or persons are exposed to excessive bank debts, over extended creditor facilities and/or Revenue liabilities.

Also directors of companies may find themselves in difficulty through a failed company and as a result their personal guarantees are being called in by Banks or Creditors of their company. Our members understand the impact that such pressures can bring and they can help with an assessment of the individual circumstances.

NEW PERSONAL INSOLVENCY BILL 2012
The long awaited Insolvency Bill 2012 was published on the 25th January 2012 and was passed by both Houses of the Oireachtas in December 2012; the following is a summary of the proposals regarding the three voluntary options and the changes to Bankruptcy:

Debt Relief Notice
This allows for the full write-off of unsecured debt under €20,000 after 3 years, during which period the creditors cannot pursue you for your debts. This is for people with net monthly disposable income of €60 or less after reasonable living expenses. It will cover credit card debt and personal loans.

Debt Settlement Arrangement
This covers unsecured debts over €20,000 with no maximum limit but requires 65% of your Creditors to agree to the proposed deal which last for 5 years with the option of extending it to 6 years.

Personal Insolvency Arrangement
This covers secured debts such as mortgages and unsecured debts up to a combined maximum of €3m, this limit can be increased with the agreement of your creditors. It can include a write-down of a portion of a home loan if a lender or lenders agree to the proposed deal and it will be on a case by case basis. The proposal requires the agreement of 65% of the combined secured and unsecured creditors but must also get agreement of 50% of the secured creditors and 50% of the unsecured creditors. The term of this arrangement is for a period of 6 years with the option of extending it to 7 years.

Bankruptcy
This is similar process to a company being wound up; instead the individual's assets and income are put under the control of a Bankruptcy Trustee who takes responsibility for disposing of the person's liabilities in an orderly fashion. The original term for bankruptcy in Ireland was 12 years but under the new Personal Insolvency Bill has been reduced to 3 years with the option of including a Bankruptcy Payment Order to run additional 5 years on conclusion of the 3 years.

Other (Informal) Options

• Informal arrangements – where you negotiate with your creditors to secure alternative
  repayment options.
• Debt Management Plans – these are managed by dedicated debt management companies and are basically informal agreements with your creditors to accept lower monthly repayments based on what you can afford and they mainly deal with personal debt.

Personal Debt   Debt Restructuring