Debt Relief Notices - MABSDebt Relief Notice Guide 1.8.13:Layout 1 01/10/2015 10:32 Page 7 Other debt you owe may be excludable debt, which is debt that may …

MABS Guide toDebt Relief Notices

0761 07 2000

DISCLAIMER:This Guide is for general information purposes only and does not constitute legal, financial or other professional advice. Specific adviceshould be sought before proceeding with any course of action with which you are unsure. Any and all information is subject to changewithout notice. No liability whatsoever is accepted by MABS ndl or any MABS company for any action taken in reliance on this information.

Debt Relief Notice Cover:Layout 1 12/11/2013 16:06 Page 1

MABS Guide to DebtRelief Notices

Contents

Section 1 – Introduction 2

Section 2 – What is a DRN? 3

Section 3 – Who can get a DRN? 5

Section 4 – How do I apply for a DRN? 10

Section 5 – What happens after the DRN issues? 13

Section 6 – Offences 16

Section 7 – What are my other options? 17

Section 8 – Are you Eligible? 20

Section 9 – Frequently Asked Questions 23

Section 10 – Who’s Who 44

Section 11 – Glossary of Terms 46

MABS Guide to Debt Relief Notices, January 2014© MABS National Development Limited 1

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Please remember this is a Guide and not the actuallaw itself. Also, your individual situation will not bethe same as anyone else’s – what is right for someoneelse, may not be right for you. So remember, whatyou read here is general and may not apply to yourcase.

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Section 1 - Introduction

If you think that a Debt Relief Notice (DRN) is a possiblesolution for you, then this Guide will help you through theprocess. It will help you understand who the differentpeople and organisations are, what you need to do beforeyou attend any meetings and what happens at the variousstages of the process. This will help you stay in control ofwhat is happening.

MABS Guide to Debt Relief Notices, January 2014

2 © MABS National Development Limited


Section 2 -WSection 2 - What is a Debt Relief Notice(DRN)?

A Debt Relief Notice (DRN) is one of the insolvencyarrangements available under the Personal Insolvency Act2012 ("the Act"). It is a notice from the Court whichstates that you are not able to pay your debts as they falldue listed in your DRN and stops your creditors fromtaking certain action against you in respect of those debtsfor 3 years. This time is called “the supervision period”.At the end of the supervision period, if your situation hasnot improved, the debts listed in your DRN will be writtenoff – this means that you no longer owe the money. If youowe the debt jointly with someone else, they will still oweit unless they also have a DRN, as you can only apply for aDRN in your own name.

This may sound like a good outcome and for many people,it is. But like all things, there are disadvantages andlooking for a DRN is not something to do lightly. It is veryimportant that you fully understand what you are gettinginto and what it will mean for you in the years after thesupervision period has passed. It is important that youunderstand that a DRN is given by the Court, so it is alegal order made for you. Because of this, you must beabsolutely open and truthful and be prepared to have allof your income and all of your spending closely examined.You may need to discuss this with your partner, as theconsequences of applying for a DRN, and of taking on aDRN, are serious.

You will need to work with an Approved Intermediary (AI)to apply for a DRN. If you need to talk to someone aboutmore general issues on money and debt, or if you want todiscuss what a DRN might mean for you and yoursituation, before making an application, you can meet witha MABS Money Adviser, who cannot be your AI, who will

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AAnn AApppprroovveedd IInntteerrmmeeddiiaarryy iiss aa ppeerrssoonn,, aauutthhoorriisseedd bbyy tthhee



be happy to work with you on these issues, or contact theMABS National Helpline on 0761 07 2000.

Most of all it is important to remember that a DRN is not away of avoiding your debt. It is a remedy for those whoreally cannot pay their debts and for whom there is noother way out of their debt.

'An Approved Intermediary (AI) is a person authorised by theInsolvency Service of Ireland to help debtors with the processof making an application for a DRN. MABS have a number of

staff acting as AIs in Ireland. Note that an AI will not make anydecision for you, will not tell you what to do, will not give youadvice on money or debt and will have limited communication

with your creditors'.

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Section 3 – What is a DSA?


Section 3 - Who can get a DRN?

There are a number of rules that you must stick to whenapplying for a DRN. This means that you must meetcertain conditions to be able to apply. These conditionsare known as the Eligibility Criteria. Before beginning theapplication process, you can judge for yourself whetheryou think you may qualify. You can look at each of theconditions or criteria now and consider whether or noteach one may apply to your situation. An eligibilitychecklist and a glossary of terms are included later in thisGuide to assist you. If you are unsure, then you cancontact MABS or the Insolvency Service of Ireland forfurther information. Even if you believe that you mightqualify, you will still need to speak to an ApprovedIntermediary to be absolutely certain.

The Eligibility Criteria listed here are not completeand your Approved Intermediary will need to gothrough each one with you to decide how they affectyour situation.

1. DebtHow much you owe and the kind of debt you have isthe first condition you should look at. A DRN will onlybe given to a person who has certain debts (called“qualifying debts”) of ¤35,000 or less.Not every debt will be a “qualifying debt”. Somemoney you owe may be “excluded debt”, which meansit cannot be included in a DRN. Excluded Debts are setout in the Act and cover:

• Maintenance and other family law paymentsordered by a Court

• Money owed to another person due to personalinjury or wrongful death

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Other debt you owe may be excludable debt, which is debtthat may or may not be included in applying for the DSA,d



• Loans or debts obtained by way of fraud orsimilar behaviour

• Court fines in respect of criminal offences• Court-ordered payments made under the

Proceeds of Crime Acts

An excludable debt can be included in a DRN in certaincircumstances (see below). These types of debts are debtsowed to the State or to local authorities. They include:

o Taxes, duties, levies and similar charges owedto the State.

o Social Welfare debts (e.g. overpayments ofbenefits).

o Local government charges, Household Chargesand rates due to a local authority.

o Debts owed to the HSE under the Nursing HomeSupport Scheme.

o Service charges or property management fees.

If you owe any of these debts and would like to have themincluded in your DRN application, you can ask your AI towrite to your creditors for their permission to be included.If the creditors agree or do not reply to the letter within 21days, then these debts will be included in your application.Even where your debt is not an excluded or an excludabledebt, you may still only be able to include part of the fullbalance outstanding as a “qualifying debt” in yourapplication for a DRN.

When looking at your debt, the AI will look at all you oweand who you owe it to, calculating how much of it isqualifying debt. To qualify for a DRN, you can have morethan ¤35,000 of total debt but ¤35,000 or less must bequalifying debt. This will be debt to a bank, credit union,credit card, catalogue company or licensed moneylenderor arrears owed in rent or to a utility company.

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“A utility debt is a debt or arrears that you owe to yourelectricity, gas, oil, telephone or television company.”




2. Assets

You can only apply for a DRN if you own assetsworth less than ¤400. However, there are someitems which are not included in this figure:

a. Household items – Furniture, electrical appliancesand so on – and tools of your trade or vocation toa total value of ¤6,000, are allowed.

b. Jewellery – One piece of jewellery to a maximumvalue of ¤750 is allowed, unless you have aqualifying debt which was used to pay for thisjewellery. If you have more than one piece ofjewellery, the rest of your jewellery must beincluded in the ¤400 limit mentioned above.

c. Car – A car or vehicle to a maximum value of¤2,000, that you reasonably need, is allowedunless you have a qualifying debt which was usedto pay for this vehicle. If your vehicle was alteredto provide for a disability, whether of yours or ofyour dependants, the ¤2,000 limit will not apply.

You will not qualify for a DRN at this time if, in thelast two years, you gave a gift to someone or soldor transferred ownership of an asset for less thanit was worth and doing this caused you to beunable to repay your debts in full as they fell due.You must provide your AI with a value for each ofyour assets to let them advise you on what thiswill mean for you.

“Assets are anything that you own, e.g. cash, savings,shares, cars, computers, sports equipment, etc.”

If you own your own home or any property, with orwithout a mortgage, you will not qualify for a DRN.

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Other debt you owe may be excludable debt, which is debtthat may or may not be included in applying for the DSA,d



3. IncomeYou can only apply for a DRN if you have a netdisposable income of ¤60 or less per month. Netdisposable income is calculated by adding up all ofyour monthly income – wages, salary, any socialwelfare payments (except Child Benefit), pension(including pension payments you are entitled to orwould be entitled to within six months of yourapplication date), any money from other peopleliving in your household and any other income youearn or are entitled to. You then take away all ofthe money paid by you as income tax, PRSI andUSC, any repayments to excluded or excludablecreditors and your Reasonable Living Expenses.

If your net disposable income is ¤60 or less permonth, you will satisfy this condition.

Income (except Child Benefit)

LESS Tax, USC, PRSILESS Reasonable Living Expenses

LESS Payments to excluded debts

LESS Payments to excludable debts

LESS Any other levy your incomeis subject to

“The Insolvency Service of Ireland has issued Guidance onReasonable Living Expenses for different household types,

available online from www.isi.gov.ie. The figure set out in theirGuidance, plus your reasonable rent and childcare costs andany extra costs you have due to special circumstances (e.g.higher electricity bills due to illness in the home), are calledyour Reasonable Living Expenses. These are deducted from

your actual income as part of the calculation of your netdisposable income.”

Income (except Child Benefit)

LESS Tax, USC, PRSI

LESS Reasonable Living Expenses

LESS Payments to excluded debts

LESS Payments to excludable debts

LESS Any other levy your income

is subject to

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4. CircumstancesYou can only apply for a DRN if you are "insolvent" andyour circumstances are unlikely to improve for the nextthree years – the supervision period of the DRN. Your AIwill make a judgment on this, based on your own situationand on guidelines provided by the ISI. You will not qualifyfor a DRN if:

➢ You had a DRN before, even if it ended early. Youwill not qualify to apply for a DRN again as you canonly ever have one DRN in your lifetime

➢ You have applied for a Protective Certificate in thelast 12 months

➢ You completed a Debt Settlement Arrangement ora Personal Insolvency Arrangement in the last fiveyears

➢ You have any connection with bankruptcy, eitherwhere you have applied or are applying yourself, orif a creditor has applied or is applying to have youdeclared bankrupt, or if you were discharged frombankruptcy in the last five years. The exact effectof the bankruptcy condition on your application willbe looked at by your Approved Intermediary.

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A Debt Settlement Arrangement and a Personal InsolvencyArrangement are two other options available under the Act. For more

information on these options please see pages 18, 19 and 20.


Section 5 – Bankruptcy



Section 4 - How do I apply for a DRN?

You cannot apply for a DRN yourself, you need anApproved Intermediary to do it for you (see page 4). Tomeet with an Approved Intermediary, you need to makecontact with MABS. You can do this by calling the MABSNational Helpline on 0761 07 2000 or by contacting yourlocal MABS Service. For details of your local MABSService, please see our website at www.mabs.ie.

The Process

SStteepp 11 MABS will complete an Eligibility Check, if you appear to be eligible to apply for a DRN a pre first appointment will be scheduled with an AI.

SStteepp 22 The AI will advise you on the process, the boundaries of the Approved Intermediary Service, Confidentiality and Effects of a DRN and will answer any general questions you may have. The AI will also go through the Statement of Affairs, the first legally required document in the process, and explain it to you. If you want to proceed with an application, the AI will discuss what you need to send to him / her in advance of your next meeting.

Step 3 Once the AI receives your completed Statement ofAffairs and supporting documentation, he / she will schedule another meeting with you. This is the first meeting in the legal process and can takesome time for the AI to go through all of the various advices and supports you need to make your application. Please ensure that you give yourself enough time for this meeting, we suggest

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MABS Guide to The Personal Insovency Act, 2012 29


Bankruptcy is the fourth remedy available under thePersonal Insolvency Act. Bankruptcy has existed formany years in Irish law, but this Act has made significantchanges to it. This option is for consideration only afterfully exploring all other options open to you, and afterweighing up the consequences of any course of action onyour life and the life of your family in years to come.

To begin bankruptcy proceedings, you must have debt ofmore than €20,000, and you must also be able to showthe courts that you have tried and exhausted all otherremedies that may be available to you, including DSA orPIA. The Official Assignee then takes control of your af-fairs. There are court fees of €650 for thispetition that you must pay. You will also be required topay for the newspaper notices relating to your bankruptcyproceedings. While you can apply to make yourself bank-rupt, we would recommend that you get independent legaladvice before doing so.

Becoming bankrupt is not a private matter: it is madeknown that you are a bankrupt, and this may haveconsequences for you in operating a business, in someemployment, and although you have a right to a bankaccount, any bank also reserves the right to imposelimitations on customers. Company law prohibits abankrupt from acting as a company director, and you arealso not permitted to run for any elected office.In effect, bankruptcy hands over all of your assets with avalue of more than €6,000, including your home, to theOfficial Assignee, whose task it is to realise the value ofthese assets – effectively, this means that the OfficialAssignee may sell your assets and get as much cash as hecan, then use that cash to pay your creditors. Any sale ofyour family home cannot proceed without the permission

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MABS Guide to The Personal Insovency Act, 201229





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MABS Guide to Debt Relief Notices, January 2014 © MABS National Development Limited 11

about 2 hours. At the end of this appointment youwill be given a Letter of Engagement to sign, confirming that you still want to go ahead with theapplication

Step 4 When the AI receives your signed Letter of Engagement, he / she will write to your creditors setting out the amount of qualifying debt owed to them (based on a recent bank statement / letter) and requesting them to verify that this is the full amount of qualifying debt outstanding within 21 days. If your creditors do not respond to this letter after 21 days, the AI will use the amount given in the letter to process your application. If your creditor disputes the amount in the letter, the AI will arrange a meeting with you to discuss, as this may affect your eligibility.

Step 5 If all is in order, the AI will schedule the second meeting in the legal process with you. During this meeting, the AI will go through each of the Eligibility Criteria with you again to ensure that nothing has changed since the date you last met. This is the most important part of the meeting as the AI needs to be sure that you are eligible to make an application for a DRN on the date of the second meeting (i.e. the Application Date). If everything is in order, the AI will complete the application with you and print your PrescribedFinancial Statement (PFS). The PFS is a list of your income, expenditure, assets and liabilities (debts). This is an important document and must be true and accurate. You must be completely honest with the AI in relation to your financial affairs. Once the PFS has been completed, both you and the AI will need to sign some statements to confirm that you are eligible etc. You will also

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MABS Money AdviserAn Adviser in a MABS company who is trained in moneyadvice, and who can discuss your whole situation withyou, helping you make the right decisions for your ownsituation, including whether or not you should apply for aDRN.

Personal Insolvency PractitionerA person who is licensed and authorised by the InsolvencyService of Ireland to support debtors to make applicationsfor Debt Settlement Arrangements and PersonalInsolvency Arrangements and to supervise thesearrangements after their approval.

Preferred CreditorA creditor who has been given preferential treatment byyou. This would be where you have paid one creditormore than the others, or you have paid them a lump sum.It means that this creditor has been treated better by you,than your other creditors.

Specified CreditorA Creditor who is included in the DRN.

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need to have a Statutory Declaration sworn by a solicitor, Commissioner for Oaths or Peace Commissioner and there may be a fee for this.

Step 6 Once the AI receives your sworn Statutory Declaration and receipt for the application fee, he / she will confirm your application on the ISI system. The ISI will then consider your applicationand either contact the AI for more information or send it to the Circuit Court.

If your application is successful, the ISI will contact you,the AI and your creditors confirming that your applicationhas been successful. The AI will send your file to the ISI.You will need to direct queries you might have during theSupervision Period to the ISI at 0761 06 4200. Westrongly suggest that you review your budget to avoidgetting into problem debt in the future.

The MABS website, www.mabs.ie, MABS National Helpline,0761 07 2000, available Monday to Friday, 9am to 8pm, oryour local MABS office is here to help you.





MMAABBSS MMoonneeyy AAddvviisseerrAn Adviser in a MABS company who is trained in moneyadvice, and who can discuss your whole situation withyou, helping you make the right decisions for your ownsituation, including whether or not you should apply for aDRN.




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SSeeccttiioonn 55 -- WWhhaatt hhaappppeennss aafftteerr tthhee DDRRNN iissssuueess??

After the DRN has been registered by the ISI, the 3 yearsupervision period will start. During these 3 years, youmust keep to certain conditions set out in the Act,namely:

➢ You must tell the ISI if there is any change in your circumstances.

➢ If your income increases by ¤400 net or more per month during the supervision period, you must report this to the ISI and surrender 50% of the value of that increase. This money is then paidto the creditors listed in your DRN on a pro ratabasis. When the total of all payments forwarded tothe ISI by you reach an amount of no less than 50% of your total qualifying debts, you will be discharged from the DRN.

➢ If you get a gift or lump sum worth ¤500 ormore during the supervision period, you must report this to the ISI and surrender 50% of the value of that gift or lump sum. This money is then paid to the creditors on a pro rata basis. When the total of all payments forwarded to the ISI by youreach an amount of no less than 50% of your totalqualifying debts, you will be discharged from the DRN.


You can be released early from your DRN once 50% of yourtotal qualifying debts have been paid. You are not obliged tomake any payments towards your qualifying debts unless,during the supervision period, your net disposable income increases by ¤400 or more per month or you get a gift or

lump sum worth ¤500 or more. In these cases you will needto give the ISI half of the increase in your income or half the

value of your gift/lump sum. The ISI will distribute these payments to your creditors who are included in the DRN.







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During the 3 year supervision period, the creditors listedin your Debt Relief Notice will also have to keep to certainconditions, namely:

➢ They cannot take or continue any legal action against you in relation to the debt listed in the DRN.

➢ They cannot ask you for any payments towards the debt listed in the DRN.

➢ They cannot recover or take any goods that you are holding, unless they own those goods or the goods are held as security for their loan/debt.

➢ They cannot contact you about the debt listed in the DRN, unless you have asked them to.

➢ They cannot end any agreement they have with you only because you have a DRN or are unable topay your debts.

At any time during the 3 year supervision period a creditor listed in your Debt Relief Notice can apply to theCircuit Court to have their debt excluded from the DRN.They can do so only if:

➢ You were not eligible to have made the applicationfor a DRN at the time that you made it.

➢ One or more of the following things has caused them hardship:o An error on your application or Prescribed

Financial Statement.o You did not comply with one or more of the

obligations listed on (page 14).o You have been made bankrupt.o You have committed an offence under the Act

since the DRN was issued.o The proper process was not followed.

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The Circuit Court will decide how the objection should betreated and can either:

➢ End the DRN (at which stage you will owe the full balance outstanding on your debts, plus anyinterest and charges that would have been appliedwhile the DRN was in place).

➢ Extend the supervision period by another year.➢ Amend the DRN in some way (e.g. excluding that

creditor’s debt).➢ Make any other decision that might be

appropriate.

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16 © MABS National Development LimitedMABS Guide to The Personal Insovency Act, 201221

Section 4 – What is a PIA?

A Personal Insolvency Arrangement, or PIA, is anotherremedy under the Personal Insolvency Act, 2012, whichagain is approved of by the court. It allows for debt to bepaid off over a period of six years, which in some casesmay be increased to seven years. The agreement ofaffected creditors is necessary in deciding how debt is tobe handled, and on the length of period for theArrangement. To apply for a PIA, a debtor needs aPersonal Insolvency Practitioner (PIP) to act on theirbehalf.

DebtsThere is no minimum level of debt for a PIA, nor is there amaximum level for the inclusion of unsecured debt.

Secured debtmay also be included in a PIA, up to amaximum of €3 million, unless the affected creditorsagree to raise this ceiling. Generally speaking, theincluded debt will be debt to a bank (including amortgage), credit union, credit card, catalogue debt,licenced moneylender or arrears owed to a utilitycompany.

Some money you owe may be excluded debt,which meansit cannot be included in the PIA. This would be debt youowe from any dealings with the court, for example a fine,or maintenance order, where you have had a claim against

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Secured debt is a debt that is attached to an asset that you own(e.g. a car loan that is not a hire purchase loan or lease agreement

& mortgage on your home).

Unsecured debt is a debt that is not attached to any asset(e.g. a credit card debt, a personal loan etc.).


SSeeccttiioonn 66 -- OOffffeenncceess

As seen in Section 5, a creditor named in your DRN canapply to the Circuit Court to have your DRN ended or havetheir debt excluded from the DRN if you have committedan offence under the Act, namely:

➢ Giving false or misleading information on yourapplication or Prescribed Financial Statement.

➢ Not complying with your obligations during thethree-year supervision period of your DRN orduring the term of your DSA or PIA. See therelevant sections in this Guide for details of yourobligations under each of these remedies.

➢ Hiding information or providing false documentsto support your application or when requested bythe Insolvency Service of Ireland to provideinformation.

➢ Fraudulently giving away assets worth more than¤400 to avoid any of your obligations under theAct.

➢ Taking out a loan or getting any other type ofcredit of more than ¤650, either in your ownname or with someone else, without telling thelender or creditor that you have a DRN, DSA orPIA.

In addition to the decisions the Court can make as set outabove, if you are guilty of an offence you may also face amaximum fine of ¤100,000 and or a maximum of 5 yearsin prison. It is important that you know what these offences are and if in doubt during the 3 year supervisionperiod, get advice from the Insolvency Service of Ireland.


SSeeccttiioonn 77 -- IIff aa DDRRNN iiss nnoott ffoorr mmee –– wwhhaattaarree mmyy ootthheerr ooppttiioonnss??

A Debt Relief Notice gives you protection from your creditors who are included in the DRN for 3 years andthen your debts are written off. This is a good outcomebut may not suit everyone. If you do not satisfy all of theconditions for a DRN or you feel that the effects and consequences of having a DRN may not suit you, thenthere are other options open to you.

Your other options are:

• Voluntary Arrangement:This is where you and your creditors agree a plan to repayyour debts. There are no fees for voluntary arrangementsbut you will need to make payments towards your debts.Your debts will not normally be written off and there areno time limits on how long a repayment plan can last. Youcan make your own voluntary arrangements with yourcreditors but a MABS Money Adviser can support you tocome up with an affordable, sustainable plan. For furtherinformation or to get help, please contact the MABS National Helpline 0761 07 2000 or your local MABS office.

• Debt Settlement Arrangement (DSA):A DSA is one of the other options available under the Personal Insolvency Act 2012. The rules and conditionsfor a DSA are like those for a DRN but with some differences. There are no maximum limits on your debts,assets or income but all of your debts must be unsecured. Unsecured debts include debts like credit cards and personal loans but a DSA does not apply to your secureddebts, such as a mortgage. Applications must be madethrough a Personal Insolvency Practitioner (PIP), who willcharge a fee for making the application and for managingyour DSA during its term. You will need to make payments

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MABS Guide to Debt Relief Notices, January 2014 © MABS National Development Limited 17MABS Guide to The Personal Insovency Act, 201221

Section 4 – What is a PIA?

A Personal Insolvency Arrangement, or PIA, is anotherremedy under the Personal Insolvency Act, 2012, whichagain is approved of by the court. It allows for debt to bepaid off over a period of six years, which in some casesmay be increased to seven years. The agreement ofaffected creditors is necessary in deciding how debt is tobe handled, and on the length of period for theArrangement. To apply for a PIA, a debtor needs aPersonal Insolvency Practitioner (PIP) to act on theirbehalf.

DebtsThere is no minimum level of debt for a PIA, nor is there amaximum level for the inclusion of unsecured debt.

Secured debtmay also be included in a PIA, up to amaximum of €3 million, unless the affected creditorsagree to raise this ceiling. Generally speaking, theincluded debt will be debt to a bank (including amortgage), credit union, credit card, catalogue debt,licenced moneylender or arrears owed to a utilitycompany.

Some money you owe may be excluded debt,which meansit cannot be included in the PIA. This would be debt youowe from any dealings with the court, for example a fine,or maintenance order, where you have had a claim against

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Secured debt is a debt that is attached to an asset that you own(e.g. a car loan that is not a hire purchase loan or lease agreement

& mortgage on your home).

Unsecured debt is a debt that is not attached to any asset(e.g. a credit card debt, a personal loan etc.).

Personal Insolvency Guide:Layout 1 14/08/2013 09:03 Page 21 Debt Relief Notice Guide 1.8.13:Layout 1 01/10/2015 10:33 Page 17

towards your debts and your PIP will try to reach agreementwith your creditors on the amounts to be paid. If more than65% (in value of debt) of your creditors agree, your DSA willbe sent to the Court for approval. If successful, your DSAsets out a plan to repay your debts for a period of up to 5years, which can be extended to 6 years in certain circumstances. After this time, the amounts left on your unsecured debts will be written off. For more information,please see www.mabs.ie or www.isi.gov.ie or the MABSGuide to the Personal Insolvency Act 2012.

• Personal Insolvency Arrangement (PIA):A PIA is another option available under the Personal Insolvency Act 2012. A PIA covers both secured and unsecured debts so may suit those with mortgages. Thereare no maximum limits on your assets, income or unsecured debts but your secured debts must be ¤3 million or less, unless your creditors allow more than that.Again, applications must be made through a Personal Insolvency Practitioner (PIP), who will charge a fee for mak-ing the application and for managing your PIA during itsterm. If more than 65% (in value of debt) of your creditors agree with the proposal made by your PIP (with atleast 50% of your secured creditors and 50% of your unse-cured creditors agreeing in value of debt), then your PIA willbe sent to the Court for approval. If successful, your PIAsets out a plan to repay your debts for a period of up to 6years, which can be extended to 7 years in certain circumstances. After this time the amounts left onyour unsecured debts will be written off while secured debtswill be dealt with as agreed with those lenders. For more in-formation, please see www.mabs.ie or www.isi.gov.ie or theMABS Guide to the Personal Insolvency Act 2012.

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• Bankruptcy:Bankruptcy is your option of last resort. You must firsthave tried a DSA or a PIA and you must have more than¤20,000 of debt. Bankruptcy lasts for 3 years but can beextended to 8 years. Depending on your circumstances,you may have to make payments to your creditors duringthis time and you may be expected to sell your assets. Either you or one of your creditors can apply to make youbankrupt. You should get legal advice if you are considering this option.

Remember that other options may suit you better. Weknow in MABS that creditors are usually willing to workwith borrowers who find themselves in trouble. Creditorsoften prefer to come to an arrangement to pay their debt, without taking legal action and going to Court. Discuss thiswith MABS if you think it may be for you.

As always with money, any decision you make will have animpact for many years to come. Do not rush into anything,take your time and make sure you fully understand whatoptions are open to you and the consequences of each.Talk to MABS.

For more information on the other options available underthe Act, see the MABS Guide to the Personal InsolvencyAct, 2012 at www.mabs.ie.

towards your debts and your PIP will try to reach agreementwith your creditors on the amounts to be paid. If more than65% (in value of debt) of your creditors agree, your DSA willbe sent to the Court for approval. If successful, your DSAsets out a plan to repay your debts for a period of up to 5years, which can be extended to 6 years in certain circumstances. After this time, the amounts left on your unsecured debts will be written off. For more information,please see www.mabs.ie or www.isi.gov.ie or the MABSGuide to the Personal Insolvency Act 2012.

• Personal Insolvency Arrangement (PIA):A PIA is another option available under the Personal Insolvency Act 2012. A PIA covers both secured and unsecured debts so may suit those with mortgages. Thereare no maximum limits on your assets, income or unsecured debts but your secured debts must be ¤3 million or less, unless your creditors allow more than that.Again, applications must be made through a Personal Insolvency Practitioner (PIP), who will charge a fee for mak-ing the application and for managing your PIA during itsterm. If more than 65% (in value of debt) of your creditors agree with the proposal made by your PIP (with atleast 50% of your secured creditors and 50% of your unse-cured creditors agreeing in value of debt), then your PIA willbe sent to the Court for approval. If successful, your PIAsets out a plan to repay your debts for a period of up to 6years, which can be extended to 7 years in certain circumstances. After this time the amounts left onyour unsecured debts will be written off while secured debtswill be dealt with as agreed with those lenders. For more in-formation, please see www.mabs.ie or www.isi.gov.ie or theMABS Guide to the Personal Insolvency Act 2012.

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Section 8 - Are you Eligible?

AA.. DDoo yyoouu??(a) owe qualifying debts of ¤35,000 or less?

To qualify for a DRN, you can have more than ¤35,000 of total debt but less than ¤35,000 of that debt must be qualifying debt. Your Approved Intermediary will calculate this for you, based on your circumstances.

(b) have assets worth ¤400 or less? Remember your assets do not include household items (such as washing machines, furniture, etc.) and your work or educational equipment (such as tools and books) to a total value of ¤6,000 or less,a car worth ¤2,000 or less and one piece of jewellery worth ¤750 or less.

(c) have a “net disposable income” of ¤60 per month or less?

(d) live in the Republic of Ireland or, if not, have you lived or had a place of business in the Republic of Ireland in the past year?

If the answer to any of the questions in Section A is “no”, you will not satisfy the conditions for a Debt Relief Notice.

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Your “net disposable income” is:All of your income (not including Child Benefit)

LESS your Reasonable Living Expenses (including rent and childcare costs & special

circumstances)LESS tax, PRSI, USC

LESS payments to Excluded DebtsLESS payments to Excludable Debts

LESS any other charge or levy to be taken from yourincome (See page 8 for details).

See page 7 for details.




BB.. HHaavvee yyoouu?? (a) in the past 2 years, sold an asset for less than it

was worth or given somebody a gift that has caused you to be unable to repay your debts?

(b) paid one or more of your creditors a larger amountthan the others, or a lump sum, in the past two years, leaving much less money available for your other creditors?

(c) ever had a Debt Relief Notice before?

(d) applied for a protective certificate in the last 12 months?

(e) come to the end of a DSA or a PIA in the past 5 years?

(f) applied for bankruptcy and the application is still with the Court?

(g) had a creditor apply for bankruptcy against you and the application is still with the Court?

(h) been made bankrupt and the bankruptcy order is still in effect?

(i) been discharged from bankruptcy but are still making payments to your creditors under a bankruptcy payment order?

(j) come to a scheme of arrangement (a special scheme with your creditors) under the Bankruptcy Act 1988?

(k) you must not currently be involved in anybankruptcy proceedings or have been discharged

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Your Approved Intermediary will make a judgementon this, based on your circumstances and on

guidelines provided by the ISI.

from bankruptcy in the 5 years before thisapplication.

If the answer to any of the questions in Section B is “yes”, you will not satisfy the

conditions for a Debt Relief Notice.

CC.. AArree yyoouu?? (a) unable to pay your debts in full as they fall due?

(b) unlikely, within the next 3 years, to be able to pay your debts in full as they fall due?

If the answer to any of the questions in Section C is “no”, you will not safisfy the conditions for a Debt Relief Notice.

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from bankruptcy in the 5 years before thisapplication.

If the answer to any of the questions in Section B is “yes”, you will not satisfy the

conditions for a Debt Relief Notice.

C. Are you? (a) unable to pay your debts in full as they fall due?

(b) unlikely, within the next 3 years, to be able to pay your debts in full as they fall due?

If the answer to any of the questions in Section C is “no”, you will not safisfy the conditions for a Debt Relief Notice.

Section 9 - Frequently Asked Questions(FAQs)

DDeebbttss

DDRRNN -- WWhhaatt iiss aa DDeebbtt RReelliieeff NNoottiiccee??

This is a notice from the Court that states that you are unable to pay your debts as they fall due and stops yourcreditors from being able to take action against you for 3years (except in criminal cases). This time is called the“supervision period”. At the end of the supervision periodif you kept to your obligations under the DRN and your circumstances have not improved, all of your “qualifyingdebt” will be written off.

HHooww ddoo II kknnooww iiff II ccaann aappppllyy ffoorr aa DDeebbtt RReelliieeff NNoottiiccee((DDRRNN))??

There are certain rules or conditions that you have tomeet to be able to apply for a DRN. These are known asthe "eligibility criteria". You can have a look at these conditions to see for yourself whether you think youwould qualify. Also, have a look at www.mabs.ie/personal-insolvency/thinking-of-applying-for-a-debt-relief-notice/or contact the MABS Helpline on 0761 07 2000 or yourlocal MABS office for further information. However, even ifyou think you qualify you will have to speak with an Approved Intermediary to confirm that you are eligible.

WWhhaatt ddooeess ““qquuaalliiffyyiinngg ddeebbtt”” mmeeaann??

These are the types of debts that can be included in aDebt Relief Notice. They include debts to a bank, creditunion, credit card, catalogue company or licensed money-lender, or arrears owed in rent or to a utility company. Toapply for a DRN you must have less than ¤35,000 of qualifying debt.

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There are other debts called “Excluded” debts which haveto be paid regardless of what arrangement you would qual-ify for and these include:

➢ Maintenance orders or other domestic support orders

➢ Court ordered damages for personal injury or wrongful death claims

➢ Loans taken out fraudulently or through embezzlement

➢ Court fines for a criminal offence ➢ Payment arising from the Proceeds of a Crime

Acts 1996 and 2005.

Then there are “Excludable” debts and these could be included in an arrangement if consent is given by the cred-itor of these debts or the creditor doesn’t respond to a re-quest for consent within 21 days, they include:

➢ Taxes, duties, levies or other similar charge owed to the Government

➢ Local authority/charges on certain residential property

➢ Rates dues to a local authority/county or city council

➢ Money owed to the HSE under the Nursing Home Support Scheme Act

➢ Management charges owed to property management companies

➢ Money owed to the Department of Social Protection.

HHooww ddoo II wwoorrkk oouutt wwhhaatt iiss qquuaalliiffyyiinngg ddeebbtt??

Your Approved Intermediary when assessing your debt willhave to calculate how much of your debt is “qualifyingdebt”. Qualifying debt has to be ¤35,000 or less. This debtwill be to a bank, credit union, credit card, catalogue

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company, licenced moneylender, rent arrears or utility arrears. Depending on the type of debt you have, you maystill only be able to include part of it as a qualifying debt.

HHooww ccaann II ggeett mmyy EExxcclluuddaabbllee ddeebbtt iinncclluuddeedd iinn mmyy DDRRNN aapppplliiccaattiioonn??

You can ask your Approved Intermediary to write to yourcreditors for their permission to be included. If the creditors agree or if they do not reply to the letter within 21days, then they will be included in your application. However, if they do not reply within the 21 days and they areincluded in the DRN, the creditors can object after the DRNis issued and any time during the supervision period.

WWhhaatt ddooeess aa PPrreeffeerreennccee mmeeaann iinn rreellaattiioonn ttoo qquuaalliiffyyiinngg ffoorr aa DDRRNN??

If you have paid one of your creditors a larger amount thanall your other creditors, or paid a lump sum off one of yourcreditors in the last 2 years leaving you less money to payyour other creditors, this is a preference and you may notqualify for a DRN at this time.

WWhhaatt ddooeess aa DDiissppoossiittiioonn mmeeaann wwhheenn aappppllyyiinngg ffoorr aa DDRRNN??

This means that if in the last 2 years, you have given a giftto someone, or sold or transferred ownership of an assetyou had for less than it was worth and in doing so causedyou to become unable to pay your debts, you would notqualify for a DRN at this time.

CCaann II iinncclluuddee ddeebbttss tthhaatt aarree iinn jjooiinntt nnaammeess iinn mmyy DDRRNN??

If they are a qualifying debt they can be included in your application, however the DRN is only in your name so thecreditor can take action against the other person who owesthe debt with you unless they have or apply for a DRN intheir own name.

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Is a court order a qualifying debt for a DRN?

A Court order for family maintenance and court fines areExcluded Debt and cannot be included in your DRN application. However, other Court orders like Instalment Or-ders could be part of your qualifying debt.

AAsssseettss

WWhhaatt iiss aann AAsssseett iinn rreessppeecctt ooff aappppllyyiinngg ffoorr aa DDRRNN??

Assets are anything that you own, e.g. property, cash, savings, shares, cars, computers, sports equipment, etc.You can only apply for a Debt Relief Notice (DRN) if youown assets worth less than ¤400, however there are someexceptions.If you own your own home or have property, even if it has amortgage on it and or is in negative equity, you do not qual-ify for a DRN.

WWhhaatt aarree tthhee eexxcceeppttiioonnss iinn rreellaattiioonn ttoo AAsssseettss ffoorr qquuaalliiffyyiinngg ffoorr aa DDRRNN??

There are a number of exceptions in relation to assets for aDRN as follows:

CarYou are allowed a car or vehicle to a maximum value of¤2,000 that you need unless you have a qualifying debtwhich was used to pay for this vehicle. If your vehicle wasadapted to provide for a disability, whether yours or yourdependants, the ¤2,000 limit will not apply.Please note that if you have a Hire Purchase agreement foryour car, this is not your asset as you do not own the caruntil the last payment is made.

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Household itemsFurniture, electrical appliances, etc., tools of the trade toa total value of ¤6,000 are allowed. This would be theirsecond hand value, i.e. what you would get for them now ifyou sold them, not the price you originally paid.

JewelleryOne piece of jewellery to a maximum value of ¤750 is allowed unless you have a qualifying debt which was usedto pay for this jewellery. If you have more than one pieceof jewellery, the rest must be included in your ¤400 limit.

Educational books and equipmentSchool books or equipment needed for primary or secondary education, for you or your dependants of anyvalue. (Please note this does not include Third Level Education).

Would sports equipment (e.g. golf clubs, treadmill) betreated as an asset or a household item?

Yes, they would be considered an asset and would be included as part of the ¤400 allowable threshold.

TThhee oonnllyy vveehhiiccllee II hhaavvee iiss mmyy vvaann ffoorr wwoorrkk,, ccaann II ppuutt tthhiissuunnddeerr tthhee ¤¤66,,000000 ffoorr ttoooollss ooff tthhee ttrraaddee oorr ddooeess iitt hhaavvee ttooggoo uunnddeerr vveehhiiccllee wwoorrtthh ¤¤22,,000000??

Your van has to be assessed under the Vehicle valuationof ¤2,000 or less.

IIff II hhaavvee ssaavviinnggss wwiitthh mmyy ppaarrttnneerr iinn aa JJooiinntt AAccccoouunntt,, hhoowwiiss tthhaatt ddeeaalltt wwiitthh oonn aa DDRRNN aapppplliiccaattiioonn??

In relation to jointly held accounts, it is for you to establish what part of the account is yours, so that it canbe assessed to see if you qualify under the asset threshold. You will have to provide proof to the Approved

Is a court order a qualifying debt for a DRN?

A Court order for family maintenance and court fines areExcluded Debt and cannot be included in your DRN application. However, other Court orders like Instalment Or-ders could be part of your qualifying debt.

Assets

What is an Asset in respect of applying for a DRN?

Assets are anything that you own, e.g. property, cash, savings, shares, cars, computers, sports equipment, etc.You can only apply for a Debt Relief Notice (DRN) if youown assets worth less than ¤400, however there are someexceptions.If you own your own home or have property, even if it has amortgage on it and or is in negative equity, you do not qual-ify for a DRN.

What are the exceptions in relation to Assets for qualifying for a DRN?

There are a number of exceptions in relation to assets for aDRN as follows:

CarYou are allowed a car or vehicle to a maximum value of¤2,000 that you need unless you have a qualifying debtwhich was used to pay for this vehicle. If your vehicle wasadapted to provide for a disability, whether yours or yourdependants, the ¤2,000 limit will not apply.Please note that if you have a Hire Purchase agreement foryour car, this is not your asset as you do not own the caruntil the last payment is made.

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““Other” Criteria

WWhat are the other conditions that are needed to be eeligible for a DRN?

There are a number of other conditions to be eligible for aDRN and they are mentioned below:

1. You have to be “insolvent” to apply for a DRN. You must also be unlikely to become “solvent” during the supervision period of a DRN. This means that your financial circumstances are unlikely to improve for the next 3 years.2. You must be domiciled in the State, or within one year before the application date, have ordinarily resided in the State, or had a place of business in the State. 3. If you have had a DRN before, even if it ended early, you will not qualify for a DRN as you can only have one DRN in your lifetime.4. If you have completed a Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement (PIA) in the last 5 years, you would not qualify for a DRN at this time.5. If you applied for a protective certificate in the last 12 months, you will not qualify for a DRN at this time.6. If you have any connection with Bankruptcy, either where you have applied or you are applying yourself, or if a creditor has applied or is applying to have your declared bankrupt, or if you were discharged from bankruptcy in the last 5 years, then you will not qualify for a DRN at this time.

WWhat if I was made bankrupt in another country, would Isstill be eligible for a DRN?

Potentially but speak to your Approved Intermediaryabout this.

Intermediary and the Insolvency Service of Ireland (ISI)may enquire into the bank accounts, securities or otheraccounts held in your name or on your behalf.

IInnccoommee

WWhhaatt iinnccoommee ccaann II kkeeeepp wwhheenn aappppllyyiinngg ffoorr aa DDeebbtt RReelliieeffNNoottiiccee ((DDRRNN))??

You can only apply for a DRN if you have a net disposableincome of ¤60.00 per month or less.

HHooww ddoo II wwoorrkk oouutt mmyy nneett ddiissppoossaabbllee iinnccoommee??

You add up all your monthly income e.g., wages, salary,any payment from social welfare (except Child Benefit),pension (including pension payments you are entitled toor would be entitled to within 6 months from your application date), anything from other people living inyour household and any other income you earn or are entitled to. You would then take away all of the moneyyou pay for income tax, PRSI and USC, any repayments toexcluded or excludable debts and your Reasonable LivingExpenses.

WWhhaatt aarree RReeaassoonnaabbllee LLiivviinngg EExxppeennsseess wwhheenn aappppllyyiinngg ffoorr aaDDeebbtt RReelliieeff NNoottiiccee??

The Insolvency Service of Ireland (ISI) has issued guidance on Reasonable Living Expenses for different household types which you can access on www.isi.gov.ie.The figure set out in this guide, plus your reasonable rent,childcare costs and any extra costs you have due to special circumstances (e.g. higher electricity bills due to illness in the home) are called your Reasonable Living Expenses. These are taken from your actual income aspart of the calculation of your net disposable income.

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““OOtthheerr”” CCrriitteerriiaa

WWhhaatt aarree tthhee ootthheerr ccoonnddiittiioonnss tthhaatt aarree nneeeeddeedd ttoo bbee eelliiggiibbllee ffoorr aa DDRRNN??

There are a number of other conditions to be eligible for aDRN and they are mentioned below:

1. You have to be “insolvent” to apply for a DRN. You must also be unlikely to become “solvent” during the supervision period of a DRN. This means that your financial circumstances are unlikely to improve for the next 3 years.2. You must be domiciled in the State, or within one year before the application date, have ordinarily resided in the State, or had a place of business in the State. 3. If you have had a DRN before, even if it ended early, you will not qualify for a DRN as you can only have one DRN in your lifetime.4. If you have completed a Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement (PIA) in the last 5 years, you would not qualify for a DRN at this time.5. If you applied for a protective certificate in the last 12 months, you will not qualify for a DRN at this time.6. If you have any connection with Bankruptcy, either where you have applied or you are applying yourself, or if a creditor has applied or is applying to have your declared bankrupt, or if you were discharged from bankruptcy in the last 5 years, then you will not qualify for a DRN at this time.

WWhhaatt iiff II wwaass mmaaddee bbaannkkrruupptt iinn aannootthheerr ccoouunnttrryy,, wwoouulldd IIssttiillll bbee eelliiggiibbllee ffoorr aa DDRRNN??

Potentially but speak to your Approved Intermediaryabout this.

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WWhheerree ddoo II ggoo ttoo bbee ssccrreeeenneedd ffoorr aa DDeebbtt RReelliieeff NNoottiiccee??

You can contact the MABS Helpline at 0761 07 2000 oryour local MABS office to be screened for a DRN. They willgo through the screening process with you and if they feelyou are eligible they will set up a pre first appointmentwith an Approved Intermediary.

WWhhaatt iiss iinnvvoollvveedd iinn aann EElliiggiibbiilliittyy CChheecckk??

If you go to the MABS website www.mabs.ie under thePersonal Insolvency Section, they have information on theScreening Process and what is involved for you.

WWhhoo iiss aann AApppprroovveedd IInntteerrmmeeddiiaarryy aanndd wwhheerree ccaann II ggeett iinnccoonnttaacctt wwiitthh oonnee??

An Approved Intermediary is a person authorised by theInsolvency Service of Ireland to help you through theprocess of making a DRN application. MABS have a number of staff acting as Approved Intermediaries. If youwould like to make an appointment with an Approved Intermediary, please call the MABS National Helpline on0761 07 2000 or your local MABS office.

DDuurriinngg tthhee SSuuppeerrvviissiioonn PPeerriioodd

CCaann II ssttiillll wwoorrkk aa ffeeww ddaayyss aa wweeeekk iiff II aamm ooffffeerreedd iitt??

You can still seek employment if you are subject to a DRN.However, you must inform the Insolvency Service ofIreland if your financial circumstances change in anysignificant way. Also, if the extra work means that yournet disposable income increases by ¤400 or more permonth, you must tell the Insolvency Service of Ireland andpay them half of the increase. They will then pay thismoney to your creditors every month.



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WWhhaatt hhaappppeennss iiff II ffoorrggeett ttoo ddiisscclloossee aa wwiinnddffaallll dduurriinngg tthhee 33yyeeaarr ssuuppeerrvviissiioonn ppeerriioodd??

It is an offence if you do not inform the Insolvency Serviceof Ireland that you received a gift or lump sum worth¤500 or more during the supervision period. If a creditorbrings you to Court for failing to disclose a windfall, yourDRN could be terminated and you could face a maximumfine of ¤100,000 and or 5 years in prison.

CCaann II ssaavvee mmoonneeyy ffoorr FFaammiillyy EEvveennttss//CChhrriissttmmaass dduurriinngg mmyyDDRRNN ssuuppeerrvviissiioonn ppeerriioodd??

Yes. A debtor subject to a DRN can still save money during the supervision period even if the money saved ismore than ¤400.

MMiisscceellllaanneeoouuss

WWhhaatt hhaappppeennss iiff II aamm aapppprroovveedd ffoorr aa DDRRNN??

If you are successful in your application for a DRN, you

will be subject to certain conditions during the 3 year

supervision period of the DRN. These conditions are

listed below:

1. You must report any material change in your

circumstances to the Insolvency Service of Ireland

(ISI), in particular if your assets, liabilities or

income increase or decrease during the

supervision period.

2. You must report any mistakes contained in your

Prescribed Financial Statement, or any other

documentation you provided in your application to

the ISI.


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3. If your income increases by ¤400 net per month

or more, you must report this to the ISI and pay

50% of the value of that increase. The ISI will then

spread this money across your creditors on a pro-

rata basis. If you receive a gift or lump sum worth

¤500 or more, you must report this to the ISI and

give them 50% of the value of the gift or lump

sum. This money is then spread across your

creditors on a pro-rata basis.

4. You cannot apply for credit of more than ¤650

without informing the creditor that you are

subject to a DRN. This also includes any joint

application for credit.

5. Your details will appear on a public register.

This means that any member of the public can

search the register by logging onto the ISI

website. The register can only be searched with

specific information e.g. your first name and

surname. Your details will be removed from the

register within 3 months of the supervision period

ending.

6. With joint debts, where the debt is included in

your DRN, the creditor can still take action

against the other party named on the debt unless

they have a DRN in their own name.

7. Criminal legal proceedings can continue against

you while you are subject to a DRN where these

proceedings relate to a debt included in a DRN e.g.

those brought by the Department of Social

Protection for fraud or a Committal Order for non-

payment of an Instalment Order.



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WWhhaatt ddooeess tthhee DDRRNN mmeeaann ffoorr mmyy CCrreeddiittoorrss wwiitthh qquuaalliiffyyiinngg

ddeebbtt iiff iitt iiss aapppprroovveedd??

The conditions the creditors have to keep to during the

supervision period of your DRN are as follows:

1. They cannot issued legal proceedings (except

criminal proceedings) in relation to the qualified

debt in your DRN.

2. They cannot continue to prosecute any legal

proceedings (except criminal proceedings) already

started in relation to recovery of your qualified

debt in your DRN e.g. where those proceedings

have not yet been heard in Court.

3. They cannot take any step to secure or recover

payment in relation to a qualified debt in your

DRN e.g. send debt collectors, write demand

letters etc.

4. They cannot execute or enforce a judgement or

order already obtained against you. They cannot

take steps to recover the goods unless the

creditor owns the title to the goods (hire purchase

agreements, rented goods this does not included

rented accommodation) or holds security over the

goods (e.g. where a car is security for a car loan).

5. They cannot contact you during the 3 year

supervision period unless at your request. This

includes all methods of written and verbal

communication.

6. They cannot terminate an agreement or claim

any quicker payment from you (in relation to any

agreement between you and the creditor, not only

the agreement covering the qualified debt) for the

reason that you are insolvent or have a DRN.


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7. They cannot proceed with a bankruptcy petition

against you or apply for a bankruptcy petition

against you.

However, a creditor can take action against a guarantor or

a second named person in relation to your qualifying debt

who is not subject to a DRN.

What are the offences under the Personal Insolvency Act

2012?

The following are the offences under the Personal

Insolvency Act 2012:

11.. FFaallssee RReepprreesseennttaattiioonn oorr OOmmiissssiioonnss::

You will be guilty of an offence if you knowingly or

recklessly give false or misleading information on your

application. You do not have to have intended to commit

this offence, it is enough that you were careless with the

details provided in the application.

22.. CCoonncceeaallmmeenntt oorr FFaallssiiffiiccaattiioonn ooff DDooccuummeennttaattiioonn::

You will be guilty of an offence if when applying for a DRN

or at any time during the supervision period you do any of

the following:

· Fail to provide the ISI with any financial

records they have requested

· Prevent any other person or organisation

from providing the ISI with financial

records

· Conceal, destroy, mutilate or falsify any

financial record, or cause or allow

someone else to do so



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· Make or cause or allow any false entry in a

financial record or

· Dispose of, alter or delete anything from

any financial record, or cause or allow

someone else to do so

3. Fraudulent Disposal of Property:

You will be guilty of an offence when applying for a DRN

or at any time during the supervision period, if you do any

of the following in respect of property worth ¤400 or

more. The amount of ¤650 is prescribed as the value

above which a debtor in respect of whom a DSA or PIA is

in effect transfer, lease, grant security over or otherwise

dispose of any interest in property otherwise in

accordance with the respective arrangements.

· Give a gift of property to any person (or

allow someone to do so on your behalf)

· Make any transfer of property (e.g. lease

a property) to any person for no

consideration (i.e. money/other property in

return)

· Transfer property for substantially less

than it is worth.

4. Obtaining Credit or Engaging in Business:

You will be guilty of an offence if you get credit (whether a

loan, hire purchase agreement, an agreement to provide

goods or services to someone who is paying you in

advance) or enters into a hire purchase or other credit

agreement worth more than ¤650 either on your own or

jointly with others without telling the creditor that you

have a DRN.


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What are the consequences of committing an offence?

If you commit any of the offences, you may be subject to aSummary conviction (i.e. for minor offences) and face a maximum fine of ¤5,000 and or 12 months imprisonment.On conviction on Indictment (i.e. for a more serious crime)up to a maximum fine of ¤100,000 and or 5 years imprisonment.

There are other consequences if an omission is found asfollows:

· Extension of supervision period by 12 months or less. This will be determined by the Court and the Register will be amended accordingly. All Creditors listed on the DRN will be notified by the ISI.

· The DRN could be terminated and you would then be liable for the total balance outstanding, plus any interest and chargeswhich built up while the DRN was in place.

· The Court may amend the DRN in any way that it sees fit. This will result in you having to keep to the new terms as set outby the Court.

· The Court is also allowed the discretion to recommend any other remedy that it sees fit and impose that remedy on you.

· The Court could make an order for the enforcement for any of your obligations under the Act, including notifying the ISI of any increase in income or gift received etc.



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So what happens if I am eligible for a DRN and want tomeet an Approved Intermediary?

If you go onto the MABS website www.mabs.ie and go tothe Personal Insolvency Section and the DRN Guide, it willgo through the process with you.

What will the Approved Intermediary (AI) do for me?

(see page 11 of this guide)

One of the conditions is that I have to be Insolvent to

apply for a DRN, how do I know if I am insolvent?

You are insolvent if you are not able to pay your debts in

full as they fall due.

What is the meaning of "domicile" for the purposes of a

DRN?

Domicile is the Country that a person treats as their

permanent home or lives in and has a substantial

connection with it.

What is a Prescribed Financial Statement?

The Prescribed Financial Statement is a summary of your

financial position. It will contain details about you, your

income, expenditure, assets and liabilities. It is an

important part of the DRN application and must be

accompanied by a Statutory Declaration which is sworn in

front of a Peace Commissioner, a Commissioner for Oaths

or a Solicitor.


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What do I have to do during the Supervision Period of

the DRN?

· You must inform the ISI if you have any

material change in your circumstances

during the Supervision Period.

· If there are any inaccuracies in your

application or PFS.

· If your income increases by ¤400 net or

more and surrender 50% of the value of

the increase to the ISI who will distribute

to your creditors on a pro-rata basis.

· If you receive a gift or lump sum of ¤500

or more and surrender 50% of the value

of the gift or lump sum to the ISI, who will

distribute to your creditors on a pro-rata

basis.

· If you are applying for over ¤650 credit

either in your sole name or jointly, you

must inform the creditor that you are

subject to a DRN.

Can I opt out of a DRN once it has been approved, during

the supervision period?

Yes you can be discharged from the DRN at any stage of

the process by making a payment to the ISI of no less

than 50% of the total qualifying debt owed to the

creditors named in the DRN.



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Can any Creditor named in the DRN object and if so,

what can happen then?

Yes they can object any time during the supervision

period. They have to make an application to the Court and

make certain objections e.g.

· you did not satisfy the eligibility criteria

for a DRN

· there is a material inaccuracy or omission

in the PFS concerned, or other

information provided by you

· you failed to comply with your obligations

under the DRN

· an adjudication in bankruptcy has been

made in relation to you that has not been

annulled or discharged

· you have, since the DRN has come into

effect, committed an offence under this

Act

· the procedural requirements for a DRN

were not complied with.

A Hearing will be heard by the Court and the Court can do

one of the following:

1. Terminate (end) the DRN, if the DRN is

terminated you cannot apply for another

one as you only get one DRN per lifetime.

You would also be liable for the full

balance outstanding and any interest and


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charges which built up during the time the

DRN was in place.

2. Extend the supervision period concerned

by an additional period not exceeding 12

months.

3. Make an order amending the DRN, which

can include removing the debt which was

the subject of the objection. It would then

mean that you will have to pay the full

balance of this debt and any interest and

charges that have built up during the time

the DRN was in place.

4. Refuse the Objection, so nothing happens

to you and that creditor’s debt stays part

of the DRN.

What if I need to borrow money while under a DRN

arrangement?

If you were to apply for credit of more than ¤650 while

you have a DRN in place, you must inform the creditor

that you have a DRN. It is an offence if you don’t mention

your DRN.

How will my DRN affect my credit rating?

The Register for DRNs and the ICB are not currently

connected. The register remains in place during the

supervision period and up to 3 months after the DRN is

discharged and can be viewed by the public, including

potential creditors.



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What is on the Debt Relief Notice once it has issued and

who gets it?

Once the DRN has been issued, it will have the following

information on it:

· Your name

· The list of qualifying debts

· The value of each debt

· The creditors listed in your application

The DRN will be sent to you, your AI and also all of your

creditors listed in your application and they will also get a

copy of your Prescribed Financial Statement.

What information is provided on the Register of DRNs?

The following information is provided:

· Your name

· Address

· Year of birth

· Date of arrangement

What happens to the Register after 3 years?

Is my name taken off it and will a record be kept to

check who has already applied for a DRN?

Your name is removed from the public register within 3

months of the DRN being discharged. The ISI will need to

maintain continued records to ensure that they don’t

process another application for you.


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My next stepsI’ve read the Guide.

I’ve gone through the checklist.

This is what I need to do now:



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Section 10 - Who’s Who

AApppprroovveedd IInntteerrmmeeddiiaarryy ((AAII))An Approved Intermediary (AI) is a person authorised bythe Insolvency Service of Ireland to help debtors with theprocess of making an application for a DRN. MABS have anumber of staff acting as AIs in Ireland. Note that an AIwill not make any decision for you, will not tell you what todo, will not give you advice on money or debt and willhave limited communication with your creditors

BBoorrrroowweerrThe person who owes the money.

Commissioner for Oaths/Peace CommissionerThey are officials who can verify statements. ACommissioner for Oaths can charge a standard fee persignature for verifying statements. If there is an exhibit,for example, a marriage certificate, attached to thedocument that needs to be signed, there is a furthercharge. Peace Commissioners are honorary appointmentsand there are no fees or expenses for their services.

CCrreeddiittoorrA person or company you owe money to.

DDeebbttoorrThe person who owes the money.

Excludable CreditorA person or company to whom an Excludable Debt isowed.

Excluded CreditorA person or company to whom an Excluded Debt is owed.



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IInnssoollvveennccyy SSeerrvviiccee ooff IIrreellaanndd ((IISSII))The ISI is a statutory body established under the Act.They oversee the law on personal insolvency and set outthe rules and processes. They have a wide range of information gathering powers and also keep a record of allpeople who take up any of the insolvency remedies underthe Act. For more information please visit www.isi.gov.ie.

LLeennddeerrA person or company you owe money to.

MMAABBSS MMoonneeyy AAddvviisseerrAn Adviser in a MABS office who is trained in money advice and who can discuss your whole situation with you,helping you make the right decisions for your own situation, including whether or not you should apply for aDRN. Contact details for your local MABS office can befound at www.mabs.ie.

MMAABBSS NNaattiioonnaall HHeellpplliinneeMABS National Helpline have Advisers who are trained inmoney advice and who can discuss your situation withyou. They help you to make the right decisions for yourown situation and look at your needs to make sure youget the best support available. Contact MABS NationalHelpline on 0761 07 2000.

Personal Insolvency Practitioner (PIP)A professional adviser who is licensed and regulated bythe ISI to apply for and administer a Debt SettlementArrangement (DSA) or a Personal Insolvency Arrangement (PIA) on behalf of debtors. They charge afee for their services. Contact details for PIPs can befound at www.isi.gov.ie.


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SSeeccttiioonn 1111 -- GGlloossssaarryy ooff TTeerrmmss

““TThhee AAcctt””::Refers to the Personal Insolvency Act 2012.

AApppprroovveedd IInntteerrmmeeddiiaarryy ((AAII))::See Who’s Who.

AAsssseettss::Assets are anything that you own such as a car, property,cash, jewellery, sports equipment, etc.

CCiirrccuuiitt CCoouurrtt::Applications for Debt Relief Notices must be approved bySpecialist Judges in the Circuit Court. There are 8 Circuits in Ireland.

CCoommmmiissssiioonneerr ffoorr OOaatthhss//PPeeaaccee CCoommmmiissssiioonneerr::See Who’s Who.

CCrreeddiittoorr:: A person or business that is owed money.

DDeebbtt::A debt is money that a person owes that they must repay.

DDeebbttoorr::A person who owes a debt.

DDeebbtt RReelliieeff NNoottiiccee ((DDRRNN))::A DRN is one of the insolvency remedies available underthe Act. It is a notice from the Court which states that adebtor is unable to pay their debts as they fall due andgives the debtor protection from the creditors listed inthe DRN for a period of three years, which can be extended to four years in certain circumstances. At theend of that period, all of the debts listed in the DRN arewritten off.



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DDeebbtt SSeettttlleemmeenntt AArrrraannggeemmeenntt ((DDSSAA))::A DSA is another insolvency remedy available under theAct. It may suit debtors who do not qualify for a DRN.A DSA is an agreement reached with your creditors andapproved by the Court. If successful, a DSA sets out arepayment plan for your unsecured debts over a period ofup to five years, which can be extended to six years if youagree. Any remaining unsecured debts will be written offat the end of this period. Applications have to be madethrough a Personal Insolvency Practitioner (PIP), who willcharge a fee for this service.

EElliiggiibbiilliittyy CCrriitteerriiaa::These are the rules and conditions that must be met toqualify for a DRN, DSA or PIA.

Excludable Creditor:A person or company who is owed an Excludable Debt.

Excluded Creditor:A person or company to whom an Excluded Debt is owed.

Excludable Debts:These types of debts require your creditors permission tobe included in a DRN, DSA or PIA application. Theyinclude:

• Taxes, duties and levies owed or payable to the State

• Local authority charges• Household charges• Local authority rates• Money owed to the HSE under the Nursing Home

Support Scheme• Service charges or property management fees• Social Welfare debts (e.g. overpayments of

benefits)If you want to include one or more of these types of debtsin your DRN, DSA or PIA, then your Approved


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Intermediary or Personal Insolvency Practitioner (as thecase may be) will write to the creditor and ask for theirpermission to include your debt. If they agree or if they donot reply within 21 days, that debt will be included. If theydo not agree, that debt cannot be included in your DRN,DSA or PIA and you will still owe the money.

EExxcclluuddeedd DDeebbttss:: These are types of debts which have to be paid and cannot be included in your DRN application.These are set out under the Act and cover:

• Maintenance and other family law payments ordered by a Court.

• Money owed to another person due to personal injuryor wrongful death.

• Loans or debts obtained by way of fraud or similar behaviour.

• Court fines in respect of criminal offences .• Court ordered payments made under the Proceeds of

Crime Acts.

IInnccoommee::Income is money you get including your wages, social welfare, pensions, dividends on shares, interest on savingsand any other money you are entitled to. Child Benefit isnot included in calculating your income.

Insolvency Service of Ireland (ISI):See Who’s Who.

IInnssoollvveenntt::A person is insolvent if they are unable to pay their debtsin full as they fall due for payment.

LLeennddeerr::A person or company you owe money to.



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LLiiaabbiilliittyy//LLiiaabbiilliittiieess::A liability is a debt or a future debt that you may owe.

MMAABBSS MMoonneeyy AAddvviisseerr::See Who’s Who.

MMAABBSS NNaattiioonnaall HHeellpplliinnee::See Who’s Who.

NNeett DDiissppoossaabbllee IInnccoommee::To qualify for a DRN you must have a net disposable of income of ¤60 per month or less. Your net disposable income is:All of your income (except Child Benefit)LESS your Reasonable Living Expenses (including rent &childcare costs and special circumstance)LESS tax, PRSI and USCLESS payments to Excluded DebtsLESS payments to Excludable DebtsLESS any other charge or levy to be taken from your income.

Personal Insolvency Arrangement (PIA):A PIA is another insolvency remedy available under theAct. It may suit people with mortgages or other secureddebt. A PIA is an agreement reached with your creditorsand approved by the Court. If successful, a PIA sets out arepayment plan for both your secured and unsecureddebts over a period of up to six years, which can beextended to seven years if you agree. Any remainingunsecured debts will be written off at the end of thisperiod but any remaining secured debts will only bewritten off where this was agreed with your creditors aspart of your PIA. Applications have to be made through aPersonal Insolvency Practitioner (PIP), who will charge afee for this service. Contact details for PIPs can be foundat www.isi.gov.ie.


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Personal Insolvency Practitioner (PIP):See Who's Who.

Prescribed Financial Statement (PFS):This is a summary of your financial position. It contains details about you, your income, your expenditure, your assets and your debts/liabilities. It is an important part ofthe application process and must be accompanied by aStatutory Declaration, which is sworn in front of a Solicitor/Commissioner for Oaths/Peace Commissioner.

Qualifying Debts:These are the types of debts that can be included in a DRN.They include debts to a bank, credit union, credit card, catalogue company or licensed moneylender or arrearsowed in rent or to a utility company. To apply for a DRN youmust have less than ¤35,000 of Qualifying Debts.

Reasonable Living Expenses:The ISI has issued Guidance on Reasonable Living Expenses for different household types (e.g. two adult, twochildren household with no car). The figure set out in thisGuidance, plus your reasonable rent and childcare costsand any extra costs you have due to special circumstances(e.g. higher electricity bills due to illness in the home), arecalled your Reasonable Living Expenses. These are deducted from your actual income as part of the calculation of your Net Disposable Income. You can checkthe Reasonable Living Expenses for your household typeonline at ww.isi.gov.ie.

Secured Debt:A debt that is attached to an asset, e.g. a mortgage onyour home.

Statutory Declaration:A legal document sworn in front of a Solicitor/Commissioner for Oaths/Peace Commissioner. In



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the case of a DRN application, you swear that the contentsof your Prescribed Financial Statement and supporting documentation are true and accurate.

Supervision Period:This is the 3 year period beginning on the date your DRN isregistered by the ISI. During this time both you and yourcreditors must comply with your obligations under the Act.

Unsecured Debt:A debt that is not attached to any asset, e.g. a credit carddebt.


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Debt Relief Notices - MABSDebt Relief Notice Guide 1.8.13:Layout 1 01/10/2015 10:32 Page 7 Other debt you owe may be excludable debt, which is debt that may …