- by Patrick Cooney on 26/11/2019

While they still often represent a point of last resort, the options available to individuals unable to meet debts as they fall due, are much greater today in Ireland than just a few years ago. The vehicles available to people who find themselves in this position vary considerably; ranging from a 'debt relief notice' on a specific loan to declaring full 'bankruptcy'. The right option or vehicle will often depend on the overall size of the persons indebtedness, and the way it is secured.

The Insolvency Service of Ireland is an independent statutory body which was established in 2013 with an objective to "restore insolvent persons to solvency" (1). There are four different types of solutions available: Debt Relief Notice, Debt Settlement Arrangement, Personal Insolvency Arrangement & Bankruptcy, we have gathered information on all four to allow you to have a better understanding of each.

ISI Figures Q1 2019: (2)

In Q1 2019 there were 854 new applications, down 14% from the same period in 2018.

Personal Insolvency Arrangements - 257

Debt Relief Notice - 50

Debt Settlement Arrangement - 40

Bankruptcy - 83

ISI Figures 2018: (3)

Personal Insolvency Arrangements - 959

Debt Relief Notice - 189

Debt Settlement Arrangement - 164

Bankruptcy - 397

So what is the difference between the four solutions?

Personal Insolvency Arrangement: an insolvency solution for people with unsecured and secured debts (a debt backed or secured by an asset e.g. a housing loan where a house is mortgaged to secure the loan debt). It is a formal agreement with creditors that will write off some unsecured debt and restructure any remaining secured debt, while keeping the person in their home where possible (4).

Debt Settlement Arrangement: a formal agreement with creditors that allows for some write off of unsecured debt. With this solution a person agrees to pay a percentage of their overall debt over a specified period of time. At the end of that period of time they will be solvent. (5)

Debt Relief Notice: an insolvency solution for people who have a low income, few assets and debts of less than EUR35,000 where it is unlikely that a person will be in a position to repay them and it is unlikely their financial situation will improve in the next 3 years. (6)

Bankruptcy: a formal High Court insolvency solution for people in debt over EUR20,000. The ownership of the person's property and possessions transfer to the Official Assignee in Bankruptcy to be sold by him for the benefit of those to whom the individual owes debts (creditors). When the person's property is sold, the Official Assignee will make sure that the proceeds are shared out among creditors and any outstanding debt will be written off.People are usually discharged from bankruptcy after one year. (7)

It is as important as ever to background any non-corporate customer before extending credit. This can be done through your CRIF Vision-net account using our Credit Check Individuals feature. With 11 individual checks including checks for all four ISI debt solutions.

To find out more about our Credit Check services, simply contact us today on Tel: +353 1 903 2660 or Email: Helpdesk.vision-net@crif.com

(1) www.isi.gov.ie/EN/ISI/PAGES/ABOUT_THE_ISI

(2) www.isi.gov.ie/en/ISI/2019%20Q1%20ISI%20Statistics%20Report.pdf/Files/2019%20Q1%20ISI%20Statistics%20Report.pdf

(3) www.isi.gov.ie/en/ISI/Annual%20report%20(eng%20version)%202018.pdf/Files/Annual%20report%20(eng%20version)%202018.pdf

(4) www.isi.gov.ie/EN/ISI/PAGES/PERSONAL_INSOLVENCY_ARRANGEMENT

(5) www.isi.gov.ie/EN/ISI/PAGES/DEBT_SETTLEMENT_ARRANGEMENT

(6) www.isi.gov.ie/EN/ISI/PAGES/DEBT_RELIEF_NOTICE

(7) www.isi.gov.ie/EN/ISI/PAGES/WP16000027

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