The Insolvency Service of Ireland (ISI) has guidelines explaining the types of debts that can be included in each of the four Personal Insolvency Solutions, which consist of:
- the Debt Relief Notice (DRN)
- the Debt Settlement Arrangement (DSA)
- Personal Insolvency Arrangement (PIA)
- Bankruptcy
These solutions were introduced in accordance with the Personal Insolvency Act 2012, offering relief to insolvent individuals in Ireland.
Before proceeding with any of these personal insolvency options, it’s important to find out what options are suitable for your situation, including which debts can be included in each solution, as this can impact what decision you make.
Debts That Can Be Included in a DRN, DSA, or PIA
Certain debts are automatically allowed to be included in the proposal, when pursuing any of the four insolvency solutions. Creditors cannot prevent the inclusion of these debts in an application and you are obliged to include them in your proposal. These debts include:
- Overdrafts
- Credit card debts
- Store card debts
- Personal loans
- Credit union loans
- Utility Bills (Note: Although the ISI lists as applicable only to DRNs, there is no reasons why utility bills cannot also be included as unsecured debts in either a DSA or a PIA)
Debts That Can Be Included in a DSA or PIA, but Not in a DRN
Some debts can be included in a DSA or PIA but are not eligible for inclusion in a DRN. These include:
- Business or commercial loans
- Personal guarantees (Note: Personal guarantees must be liquidated to be included in a DSA or a PIA; if the debt has not become due and payable, it cannot be included.)
Debts That Can Be Included in a PIA, but Not in a DRN or a DSA
Certain debts can only be included in a PIA and are not eligible for inclusion in a DRN or a DSA. These debts include:
- Principal private residence housing loans
- Investment property loans
Excludable and Permitted Debts
An “Excludable debt” is a debt that cannot be included in an Insolvency Solution, unless a creditor gives permission for it be included. During an Insolvency application, a creditor will need to be asked if an “excludable debt” can be included in the proposal. If the creditor agrees, it becomes a “permitted debt”. If the creditor doesn’t respond then it is usually assumed that the creditor has “permitted” to allow the debt.
Excludable Debts That May Become Permitted Debts in a DRN, DSA, or PIA
There are specific debts that may initially be excluded but can become permitted debts in a DRN, DSA, or PIA if the creditor grants permission. These debts include:
- Taxes, duties, levies owed or payable to the state
- Local government charges
- Amounts due to the Health Service Executive under the Nursing Home Support Scheme
- Annual service charges to owner’s management companies (apartments and housing estates)
- Liabilities arising under the Social Welfare Consolidation Act 2005
- Local Authority Rates
- Household Charges
- Property Charges
Excluded Debts That Cannot Be Included in a DRN, DSA, or PIA
Certain debts are excluded and cannot be included in any of the insolvency solutions. These include:
- Family maintenance payments under Court orders
- Court fines related to criminal offenses
- Liabilities arising from personal injury or wrongful death claims awarded by the Court
- Liabilities arising from loans obtained through fraud
Excluded Debts That Cannot Be Included in a DSA or DRN
Additionally, secured debts cannot be included in a DSA.
Please note that this information is based on the guidelines available as of October 2015, and it is essential to verify the current regulations and eligibility criteria when considering personal insolvency solutions in Ireland.