What is a Debt Settlement Arrangement?

You can enter a Debt Settlement Arrangement with your creditors when you are considered insolvent. You are considered insolvent when you are unable to pay your debts in full and as of when they fall due.

A DSA will only include unsecured debts; there is no limit to the amount of unsecured debt when entering a DSA. There are certain unsecured debts that cannot be included in a DSA and certain unsecured debts require the consent of the creditor before it is entered into a DSA. Secured Debts such as Mortgages cannot be included in a DSA.

Unsecured Debts are Debts where the creditor does not have the ability to seize specific assets belonging to the debtor should repayments not be maintained. A Debt Settlement Arrangement will begin when you and 65% of your creditors (in value) agree to the proposal put forward by the Personal Insolvency Practitioner (“PIP”).

Under the DSA, your unsecured debts will be settled over a period of 5 years, with the possible extension of an additional year in certain circumstances, resulting in a DSA lasting 6 years.

Once the DSA has been successfully completed, you will be discharged from the remainder of your debt at the end of the period.

What are the criteria for a DSA ?

You are considered suitable for a DSA if you meet the following conditions

• You are insolvent and unable to pay your debts in full as they fall due.
• You have a total of one or more more unsecured creditors.
• Your domicile must be in the Republic of Ireland or you must have, within the past year, ordinarily resided or had a place of business in the Republic of Ireland.
• You have completed a prescribed financial statement (PFS) and signed the statutory declaration stating that it is both true and accurate.
• You have obtained a statement from the Personal Insolvency Practitioner, that they are of the opinion that:
1. The information in the PFS is true and accurate.
2. You are eligible to make a proposal for a DSA; and
3. Having considered the PFS, they are of the opinion that you will not be solvent in the next 5 years.
4. Having considered the PFS, they are of the opinion that you will not be solvent in the next 5 years.
• Having considered all possible options, a DSA is the best solution for you and that there is reasonable prospect that you will become solvent upon completion of the DSA.

Criteria that might prevent you from getting a DSA

You are not eligible to seek a DSA should the following requirements apply

• You have incurred 25% or more of your unsecured debts within the past 6 months.
• You have been subject of a Debt Relief Notice now, or within the past 3 years.
• You must not be the subject of a Personal Insolvency Arrangement now, or within the past 5 years.
• You have been the subject of a DSA before. (With Exceptions)
• You are currently bankrupt, subject to a bankruptcy measure or have been discharged from Bankruptcy in the past 5 years.
• You have been the subject of Protective Certificate issued in respect of a DS A within the last year

What type of debts may or may not be included in a DSA?

• Personal Loans
• Credit Union Loans
• Business / Commercial Loans
• Store Cards
• Overdrafts
• Personal Guarantees (Liquidated and Called up)

Debts that can be included only with creditor consent

• Taxes, duties, levies owed or payable to the state
• Local Government charges
• Amounts due to the Health Executive under the Nursing Home Support Scheme
• Annual service charges to owner’s management companies ( Apartments and Housing estates)
• Liabilities arising under the Social Welfare Consolidation Act 2005 Local Authority Rates
• Household Charges

Debts that cannot be included in a DSA

• Family maintenance payments under court orders
• Court fines in respect of criminal offences.
• Liabilities arising out of injury or wrongful death claims awarded by the Court
• Liabilities arising from loans obtained by Fraud
• Secured Debts