A borrower from Donegal with debts in excess of €100,000 will see a significant amount of his debts written off over a period of five years if he follows the steps set out in a debt settlement arrangement approved by his creditors this week. A debt settlement arrangement allows any debtor who is insolvent and has unsecured debts over €20,000 to propose an arrangement with two or more of his creditors to pay down the debt.
A protective certificate was issued by the Court in Monaghan to the borrower on the 21 October 2013 which protected him from legal proceedings by his creditors for 70 days.
At the meeting of the borrower’s creditors this week, more than the 65% minimum threshold of creditors required, approved the debt settlement arrangement (DSA).
The borrower will pay back a portion of his debt in accordance with the DSA and at the end of five years a significant remainder of the borrower’s debts covered will stand discharged in full so long as he complies with its terms. It is likely that this DSA will be reviewed annually by the personal insolvency practitioner and can be amended if the financial circumstances of the borrower change.
The DSA will be referred to the Insolvency Service of Ireland (ISI) before it is approved by the Circuit Court in Monaghan and then entered into the register maintained by the ISI.
The ISI has received 5,736 telephone calls up to the end of October 2013 and 1,731 emails. There are 82 registered personal insolvency practitioners to assist with the service.