New insolvency processes offer hope
A valuable precedent has been set that is great news for the country
In the war on household debt, it was a good week. Last Monday evening, the first Debt Settlement Arrangement (DSA) was signed off in court. Under the arrangement, about 70 per cent of the debt will be written off.
DSAs are one of the new processes introduced by the Personal Insolvency Act, and are for unsecured debts over €20k. The man in question is reported to be a public sector worker in his 40s from Donegal, with a six-figure debt he could not pay. For the next five years he'll retain enough of his earnings to work and maintain a reasonable standard of living. His remaining income will be used to service the debt. At the end of the five years, the majority of his debt will be written off, permanently. The man was supported throughout by the non-profit New Beginning, and the Personal Insolvency Practitioner, or PIP, was Ronan Duffy of McCambridge Duffy.
Grant Thornton is one of the commercial firms putting this type of agreement together. Its phone has been hopping since Tuesday morning. When the media reported Monday's deal, more and more people realised that the new laws may, for the first time, give them a way to restructure their unsustainable debts. The profile of the people coming to Grant Thornton is highly varied – men and women from all walks of life, from homemakers to teachers to carpenters to lawyers. From all ages and all parts of the country.