The Personal Insolvency Arrangement (PIA) is a new solution available to people in Ireland, from the Personal Insolvency Bill 2012, to deal with secured debt and unsecured debt in an innovative and groundbreaking way. This solution applies to insolvent debtors with combined secured debts and unsecured debts of any amount.
Example of a Personal Insolvency Arrangement or PIA
With the assistance of a Personal Insolvency Practitioner (PIP), the debtor can apply for a 'Protective Certificate' while the Personal Insolvency Arrangement is being prepared. This prevents creditors from taking any action for the recovery while the PIA is being drafted.
Creditors are offered an agreed percentage of what they are owed and an offer to pay this over a set period is made. If the debtor is in negative equity in regard to one or more secured properties such as a mortgaged home, the proposal may include provisions for writing down a proportion of the mortgage, and for reducing mortgage payments by extending the repayment period for a number of additional years.
For the Personal Insolvency Arrangement to be accepted, the applicant must have the support of at least 65% of all voting creditors both secured and unsecured. In addition at least 50% of secured creditors who choose to vote and at least 50% of unsecured creditors who choose to vote must vote in favour of the Personal Insolvency Arrangement proposal.
The Personal Insolvency Arrangement will normally run for a term of six years but it may be extended by an additional year.
A debtor may enter into a Personal Insolvency Arrangement only once in his or her lifetime unless exceptional or other external factors caused the debtor’s insolvency.