Personal insolvency

The term personal insolvency can be quite scary, but learning more about it can be a big step on the way to tackling your debt. 

When you are insolvent, it means that you don’t have enough money to pay your debts when they are due and you need to make a special arrangement to deal with your debt as it’s unlikely your circumstances will change in the short term. MABS are here to support you in this difficult time. 

If you are in serious debt and cannot meet your repayments, formal (also called statutory) debt solutions can be an option. These are solutions under Personal Insolvency Act 2012 to help you clear your debt problems over a period of time.  

In this section, we explain what solutions are available, how they work, who can get them and whether they might be right for you 

What personal insolvency solution is best for me? 

A Debt Relief Notice (DRN) could be the best option if you:  

• Have total debts below €35,000  
• Have a low disposable income  
• Have few assets  
• Have unsecured debt 
• Are unable to pay debts as they fall due  

You apply for a DRN through a MABS Approved Intermediary (AI).  

A Debt Settlement Arrangement (DSA) could be the best option if you:  

• Have any amount of debt 
• Have no mortgage or other secured debt 
• Are unable to pay debts as they fall due 
• Are able to settle debts within 5 years

You apply for an AI through a Personal Insolvency Practitioner (PIP).

A Personal Insolvency Arrangement (PIA) could be the best option if you:  

• Have secured debts   
• May have other unsecured debts  
• Are unable to pay debts as they fall due 
• Can settle your debts over 6 years 

You apply for a PIA through a Personal Insolvency Practitioner (PIP)

Bankruptcy could be the best option if you:  

• Have total debts over €20,000 
• Are unable to pay debts as they fall due 
• Have already used one of the other 3 solutions  

You apply for bankruptcy through the High Court 

 Note: Bankruptcy lasts for at least one year. 

More about personal insolvency solutions 

Unlike informal solutions, such as voluntary arrangements, formal personal insolvency solutions are legally binding. This means that you are protected from further action from your creditors and any arrangements cannot be changed without you and your creditors both agreeing to them. 

Formal solutions are suitable when you are unable to pay back your debts when they fall due. They are normally used if you have lots of debts you can’t pay. 

The options available depend on: 

• Your circumstances  
• The amount of debt you have 
• What action your creditors have already taken 

How to apply 

You can’t apply on your own for a Debt Relief Notice (DRN), a Debt Settlement Agreement (DSA) or a Personal Insolvency Arrangement (PIA). You have to apply through an Approved Intermediary or a Personal Insolvency Practitioner. You have to apply for bankruptcy through the High Court. We can guide you through all of the stages involved. 

Before you go ahead with a formal solution, it is important that you fully understand how they work and how they can affect you. For example, they might affect your credit rating, mortgage or savings. Personal insolvency can offer different solutions to people depending on their situation. And each option has its own rules and procedures to consider. 

 If you need more help understanding the different options, contact MABS for insolvency options advice.  Read more about how MABS can help.