1. Mortgage arrears on your home
2. Main elements of a PIA
3. Cross-border recognition
4. Obligatory terms of a PIA
Mortgage arrears on your home
In general, you must declare that you have operated with your mortgage lender for at least 6 months in respect of your top private hearthstone (your home) in agreement with the Central Bank’s law of Conduct on Mortgage Arrears; and that, in malignancy of this co-operation, you have been unfit to agree an indispensable prepayment arrangement or the lender has verified in writing that it doesn’t wish to enter into such an arrangement. This rule doesn’t apply if your Personal Insolvency Practitioner (PIP) – see below – declares that you would still not be likely to be solvent 5 times if you accept such an indispensable prepayment arrangement. still, see our section on mortgage arrears for further information, if you’re facing mortgage arrears.
Main elements of a PIA
You must make your offer for a PIA through a personal Insolvency Practitioner (PIP) – see The PIA process below. Once you have agreed on the terms of the PIA offer with your PIP, you also need a blessing from a creditors’ meeting, or, failing that, your offer may be assessed by your creditors after a court review. See ‘Creditors meeting’ below for further detail. A PIA may involve you making regular payments of agreed quantities to your Personal Insolvency Practitioner, who also distributes them to your creditors according to the terms of the PIA. Your creditors may not take any action against you to apply the debt during the continuance of the PIA. However, the rest of your debt to your relaxed creditors will be discharged, if you keep to the terms of the PIA. when the PIA ends, you’ll still be liable for the outstanding amount of your secured debts, similar to your mortgage.
The PIA has been designated as an insolvency proceeding that can profit from cross-border recognition. This means that a debtor serving of a PIA will gain the same protection against creditors in utmost other EU countries that they admit in Ireland, subject to and in agreement with the Regulation on Insolvency Proceedings (EC) No1346/2000(pdf), as streamlined by Regulation (EU)No.663/2014 (pdf).
Obligatory terms of a PIA
There are certain elements that the PIA must contain
- The maximum duration of the agreement must be 6 times but this may be extended by over to 1 time in circumstances as specified in the terms of the arrangement
- The PIA must easily distinguish between secured debts and relaxed debts and must make provision for how the security held by the creditor is to be treated. Unless your secured creditors agree else, they may get the full value of their security or the full amount of the debt if the property is sold. However, there’s a clawback if the security is vended for lesser than the value estimated at the time of the arrangement If they agree to accept lower than the full value of the security.
- If you keep to the terms of the agreement your remaining debts to your relaxed creditors will be discharged
- You remain liable for certain debts unless the proposed arrangement explicitly provides for a concession agreement and the creditor has agreed in writing to accept this – see ‘barred and excludable debts’ above
- The PIA cannot release you from forfeitures or other financial penalties arising from felonious offenses
- It cannot bear you to vend any means that are nicely necessary for your employment or business unless you agree to such a trade
- You must be left with enough income to maintain a reasonable standard of living for yourself and your dependents
- It mustn’t bear you to dispose of your top private hearthstone (your home) or to cease to enthral it unless specific conditions are met – see ‘Secured creditors’ below
- It must outline how your debts will be treated in the event of your death or internal incapability
- It must give that your circumstances be reviewed by the personal Insolvency practitioner at regular intervals (not further than 12 months) during the currency of the PIA; this review will involve the medication of a new Prescribed Financial Statement that must be transferred to all the creditors.
- It must make provision for the Personal Insolvency Practitioner’s costs