A PIA (short for Personal Insolvency Arrangement) is a formal debt solution designed to help people that are struggling with mortgage payments that are too high, or unaffordable restructures, or arrears and other debts such as credit cards, loans etc… The main aim of a PIA is to:
If you are experiencing financial difficulty and would like to find out more about a PIA, fill in the form and we will get in touch. We will assess your situation and advise you on all options available. All advice is free and confidential and you are under no obligation by speaking with us.
Below is a typical example of a PIA. Our clients are a family with three children. The parents went through a period of financial difficulty after a change in circumstances with employment. They fell into arrears on their mortgage and their unsecured debts built up due to the reduced household income. After assessing their situation, it was determined that they were in fact Insolvent (unable to pay their debts). A PIA was a suitable option for them to help address their financial situation. Their PIA was accepted by their lenders.
In the PIA, they will make reduced payments for 6 years. On completion of the PIA, the mortgage payments will remain at an affordable level. Any agreed remaining debts will be written off on completion of the arrangement.
To put it simply, a PIA is a formal Insolvency solution that restructures your unaffordable secured debts (such a loan secured against property or assets) and unsecured debts (such as credit cards or loans), with the main purpose of protecting your home and bringing the debts in line with your affordability. This can be done in several different ways and the method of restructure really depends on your individual circumstances.
Because a PIA is very unique to your situation, a thorough assessment is carried out to determine if and how it will work for you. A PIP (Personal Insolvency Practitioner) is the professional who is qualified to carry out this assessment and to work out what the best approach is for dealing with your debts. You cannot avail of a PIA or any Insolvency solution without the services of a PIP. Your PIP will also facilitate your PIA application. If your PIA is accepted by your creditors or the court, your PIP will also oversee your PIA for it’s duration, through to completion.
A PIA usually consists of manageable monthly payments that go towards your restructured mortgage and other debts, usually for a period of up to 6 years (some arrangements might have a much shorter or slightly longer duration). The monthly payments come from the Income left over after a realistic standard of living has been deducted from your household budget. In some cases, a PIA may involve using a lump sum payment to address the debts, if it is available.
At the end of the PIA, you may be released from the secured debt, or continue paying it according to the agreed terms laid out in the arrangement. Any remaining unsecured debts are written off.
Determining if you are eligible for a PIA really depends on your assessment, but there is some specific criteria involved. You must:
Below are some of the most common ways in which your mortgage can be restructured in a PIA. We understand that a lot of this information can be quite overwhleming, so please do get in touch if you have any questions in relation to how your mortgage might be dealt with in a PIA. We are happy to answer any queries you might have. Our PIPs and senior advisors will be able to determine the best course of action for your mortgage restructure in relation to your situation.
The mortgage balance is lowered to an affordable amount (but not below market value).
An Interest rate reduction is applied to mortgage to bring it down to an affordable amount.
The mortgage term is increased which can provide lower mortgage payments.
This type of restructure can benefit people with large unaffordable unsecured debt.
A portion of the mortgage is set aside or 'warehoused' to be resolved at a later date.
This can benefit people who are expecting their income to improve in the short to medium term, or people who are expecting a lump sum payment some time in the future.
This is an alternative to a Split mortgage, where a portion of the mortgage is warehoused and a portion of the mortgage is written off.
Below are some further restructure methods that are available but less likely to be used in a PIA.
Mortgage payments are fixed at a reduced rate, allowing for affordable payments to be made towards your unsecured debts.
Mortgage could be changed to Interest only or Interest only and part capital, allowing for additional money to go towards your unsecured debts.
This method is very rarely used in a PIA: Mortgage lender may agree to write off some of the mortgage in exchange for a percentage share of the property.
This method results in loss of ownership of your home, but allows you to remain in the property. A Housing association or County Council may purchase the property.
Mortgage payments are suspended for a length of time (but not beyond the duration of a PIA). During this time, the payments can be directed towards your unsecured debts. The mortgage can be prioritised after the payments are finished and the unsecured debts are cleared.
This adds any outstanding mortgage arrears to the existing mortgage. It can help improve monthly income as the arrears are now paid down over the remaining mortgage term instead of having to be dealt with in a shorter timeframe.
We will have an initial chat with you to determine if you are Insolvent (unable to pay your debts), and what Debt soutions you might be eligiible for. This involves assessing your current situation, including gathering information about your secured and unsecured debts. We also use 'Reasonable Living Expenses' guidelines to work out your monthly household budget. All of this information helps us determine your affordability and how much money you might have available to service your secured and unsecured debts.
When we have all the required initial information, we will advise you of you all possible options for addressing your debts, including if a PIA is possible. You can then take the time to review these options and decide if you would like to proceed with any Insolvency applications. All advice is free and confidential and you are under no obligations to proceed with any solution by speaking to us.
If you decide to proceed with a PIA with one of our PIPs, we will begin gathering the required documentation and working on your Prescribed Financial Statement (PFS). The purpose of the PFS is to document everything accurately in writing. The PFS will summarise your assets, liabilities, income and expenses. Your PIP will explain all options available to you including the process of a PIA in more detail, discussing the pros and cons, any fees that will be involved and what debts can and cannot be included etc...
When you and your PIP are happy with the PFS, you must declare that all information is true and accurate in the PFS. Your PIP will make a note in writing of your recommended course of action and confirm that in their opinion, everything in the PFS is true and accurate.
You must then decide if you are happy with the recommended course of action and the solution that is being put forward. When you confirm that you are happy and want to proceed with an application, you will appoint our PIP. The PIP will confirm that they are acting on your behalf. Your PIP will then submit your application to the Insolvency Service of Ireland (ISI) and the Court for review.
Once the ISI have checked your application and are happy that all the information is in order, they will send all required documentaion to the relevant court (Circuit or High) along with a Protective Certificate. The court will review all documentation and when satisfied, they will issue your Protective Certificate (PC). The ISI will record details of the PC on their Public Register of Protective Certificates.
Your PIP notifies all creditors involved that you intend to apply for a PIA and your PC is in place. Your creditors cannot take legal action against you or your assets when your PC is in place. A PC is usally granted for 70 days, but can be extended. When you have had a PC granted, you cannot have another one issued for atleast 12 months, without order of the court.
Your PIP will start formulating your PIA proposal. They will invite your creditors to propose how they would like the debts to be dealt with and will provide them with a copy of your PFS. When your PIP has finished drafting your PIA propsal, it will be provided to you for your consent.
After you have consented to the PIA Proposal, your PIP will arrange a 'Meeting of Creditors', where your creditors will vote to accept or reject the proposal. At least 65% of your creditors (by debt value) must vote in favour for the PIA to be accepted. In addtion to the this, at least 50% of your secured creditors and 50% of your unsecured creditors must vote in favour.
If the propsal is accepted, your PIP will inform the ISI and inform any creditors involved of their right to object to the relevant court. The ISI will notify the court. If there are any objections, the PC will remain in place until the matter is resolved by the courts decision. If there are no objections, or upheld objections, the court will approve your PIA, provided they are satisfied. The ISI will record your PIA in the public PIA Register and your PIA comes into effect.
If the PIA is rejected by your creditors, you may be eligible to appeal for a court review, where the rejection could be overturned and your PIA granted. If you are not eligible for appeal, you may have to seek alternative Insolvency arrangements, or if you do not get the situation resolved with your creditors, we can review your circumstances again in the future and try and re-apply for a PIA.
Your PIP will supervise your PIA throughout it's duration, to make sure everything is running as it should be, in line with the terms of your arrangement. Your PIA will require a high level of oversight and admin and your PIP will review your PIA to make sure it remains affordable, reviewing payments and issuing reports to creditors. The PIP will retain any agreed funds from your payments to cover fees and expenses.
If you have a change in your financial circumstances during the PIA, you must notify your PIP as soon as possible, so that they can work with your creditors, the ISI and the court to try and agree a variation and keep the PIA running successfully. It is important to work with your PIP during any changes. If you do not, or if you default on multiple payments and refuse to work with your PIP, your PIA could potentially fail. If your PIA fails you could become fully liable for all of the debts involved, minus any payments you have made during your PIA.
During your PIA you may not seek credit over the value of €650 without informing the lender that you are in a PIA. You may not sell or deal in property above a certain value, outside the terms of the PIA. Your partner or spouse is not affected by these restrictions (if applicable).
On successful completion of your PIA your unsecured debts are cleared. You may either be released from your secured debt, or continue paying your secured debt in the way that was agreed in the terms of your PIA.Your PIP will let the ISI and your lenders know that you have complied with all terms of your arrangment and that all payments have been distrubuted accordingly. The successful PIA is recorded on the PIA register. You may now start to work on repairing your credit rating and resume typical financial activities.
Firstly, we will only put forward a PIA application if we believe it will be successful. This will help increase your chances of a successful PIA. If we do not think a PIA would be accepted, we would not put an application through for you. In saying that, we cannot 100% guarantee if a PIA will be accepted as we cannot predict how lenders will behave, so there may be times where a PIA proposal is rejected, even if we believe it would be the best outcome for all parties involved.
If this happens we might be able to request a court review of the lender rejection, if you are elgible for this service. The court will review the application and rejection. If they deem it the application to be suitable, they may impose the PIA on your creditors. If you are not eligible for court review, you may have to seek alternative insolvency arrangements. If, in the future your situation has not been resolved, you could get in touch stating you would like to try again with a PIA application.
All fees and costs will be explained in detail by your PIP, prior to your PIA application.
Some PIPs charge an initial consultation fee when you are entering into a PIA. We offer a free initial consultation. Only if your PIA application is successful will we receive any fees for adminstering and managing your PIA. The fees comes from your agreed payments to creditors, so you will never receive a bill from us. If your PIA application is not accepted, you pay nothing.
The ISI have also waived their application fees for a PIA.
There is a state funded scheme also available, called the Abhaile Scheme, where you may be entitled to professional legal or financial advice free of charge, if you have Mortgage Arrears. A dedicated advisor from your local Money Advice and Budgeting Service (MABS), will be able to provide further information on this.
A DSA is a solution created to help people address their difficulties with unsecured debt repayments (such as credit cards, loans, overdrafts etc...).
A DRN is a formal debt solution, created to help people who are unable to repay their debts (up to the value of €35,000) and have little or no assets.
Bankruptcy is a formal solution for people who are unable to pay their debts (over the value of €20,000) and have explored all other Insolvency options. It is usually seen as a last resort debt solution.
If you would like a free Insolvency review of your financial situation, fill in the Fact Find form providing as much information as possible and send it through. Our advisors will review your information and get in touch to advise you of all options available.
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nationaldebtrelief.ie is a trading style of McCambridge Duffy. McCambridge Duffy Limited is a Limited Company registered in Ireland | Registered number 527584 | Registered office Suite 6, Spencer House, High Road, Letterkenny, Co. Donegal, F92 V8XC
All our advice is free. A fee is only payable where further services are requested. All fees will be explained in detail and discussed prior to commencement of any debt solution.
Ronan Duffy, Daragh Duffy, Daniel Rule, James Green and Judy Mooney are authorised by the Insolvency Service of Ireland to carry on practice as personal insolvency practitioners. Ronan Duffy, Daniel Rule, James Green and Judy Mooney are authorised to act as insolvency practitioners by Institute of Chartered Accountants Scotland.