Three new ways to deal with serious debt problems were introduced to Ireland last year. Known as Debt Relief Notices, Debt Settlement Arrangements and Personal Insolvency Arrangements, these options provide an alternative to bankruptcy for those that find themselves in serious financial difficulty. Each is a form of personal insolvency. In this article we review the documentation that you may be required to provide should you wish to use any of these debt solutions.
In each instance you’ll be dealing with a professional intermediary that can arrange your personal insolvency for you. A “personal insolvency practitioner” (PIP) can arrange a Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement. An “authorised intermediary” can set-up a Debt Relief Notice (DRN) for you. The Money Advice and Budgeting Service (MABS) can act as an “authorised intermediary” to set-up a DRN.
Whether you’re dealing with a PIP or MABS it’s likely that you’ll be asked to provide certain types of documentation. This information will enable the intermediary to verify important facts and figures that will be used to create and support your case.
Firstly you’ll need to be able to verify your identity. Government and bank issued documents are most likely to be acceptable for this purpose. You’ll also need to provide recent bank statements for a number of other purposes as described below.
Your Personal Insolvency Practitioner or MABS will also seek to verify your income. Most people will find that retaining their recent payslips will be sufficient for this purpose. Such details might also be further verified through the inspection of bank statements. If you’re self-employed and do not have payslips you’ll need to discuss alternative means of confirming your income with the intermediary.
They’ll also want to be able to confirm your expenditure. In particular they’ll be interested in your housing costs. This could involve providing a mortgage statement or rent agreement for example, with the figures being confirmed further via your bank statements. If you have childcare expenses you’ll also want to gather documentation that evidences these costs.
The system of allowances used for calculating expenditure allowances avoids the need to provide evidence of everything that you spend money on. However some people will have particularly high costs in certain areas that fall outside of these guidelines. An example might be if a family member suffers from a medical condition with associated regular costs. Arguments can be made for special treatment in such circumstances. It would be advantageous if you can evidence any such situation in as much depth as possible.
Being able to provide the documents mentioned should result in your case being handled quickly and efficiently. They will also enable the PIP (in the case of a Debt Settlement Arrangement or Personal Insolvency Arrangement) to confidently present your position to your creditors when they are seeking to strike a deal with them. The fact that they have documented and evidenced the figures that are being presented to your creditors should help to build important trust with those creditors and increase the chances of success for you.
Given that the Irish personal insolvency system is currently very new there may be some differences between the types of information that various intermediaries require from their clients. Efforts have now begun to create a “protocol” between PIPs and the banks about how DSA and PIA cases should be handled and on what basis they should be accepted. The development of this protocol might result in a more standardised approach in the future about the exact documentation that will need to be provided and reviewed. Currently you’ll need to confirm the precise requirements of any Personal Insolvency Practitioner or authorised intermediary that you approach about assisting you with your debts.
Author: For further information about personal insolvency, visit the Debt Advice Ireland website. The site is full of information about Debt Relief Notices, Debt Settlement Arrangements, Personal Insolvency Arrangements, bankruptcy and dealing with mortgage arrears. There’s an online forum where you can ask questions to debt experts (anonymously if you wish) and the site’s experienced advice team can offer one-to-one advice to enquirers.