Personal Insolvency Arrangement (PIA)
What is a Personal Insolvency Arrangement (PIA)?
A PIA is a formal agreement with all your creditors that will write off some of your unsecured debt and restructure any remaining secured debt.
A key feature of a PIA is that, in the majority of cases, a debtor will be able to remain in their home.
If you have secured debt and unsecured debt that you cannot repay, a PIA could be the right choice for you.
Is a PIA right for me?
A PIA is a formal agreement with all your creditors that will write off some of your unsecured debt and restructure any remaining secured debt.
Abhaile – Free mortgage arrears support
Abhaile – Free Mortgage Arrears Support
If you are insolvent and in arrears on your home mortgage you could be eligible for a FREE consultation with a PIP. This is available as part of Abhaile – a State-funded Scheme to help distressed mortgage holders. The PIP will seek to identify a solution to resolve the borrower’s debt problems, keeping them in their home where it is possible to do so. The panel of PIPs who participate in the Scheme is available here
The Scheme has been set up to help borrowers who are :
- Insolvent (cannot pay their bills in full as they are due).
- In mortgage arrears on their principal private residence; and at risk of losing their home.
- In a home that is not disproportionately large for their needs.
The purpose of the Scheme is to help people in serious arrears to find the best available solutions, with the help of professionals who have expert knowledge of mortgages, insolvency, bankruptcy and/or repossession. The priority will be to find a sustainable solution that keeps a person in their home, where possible.
If you think you or someone you know may be eligible for the Scheme you can:
- Contact a PIP directly and they will carry out an eligibility assessment, or
- Contact a MABS office or the MABS helpline (0818 07 2000). They will carry out a short eligibility assessment and refer the person to the appropriate service.
In addition to the panel of PIPs, Abhaile contains two other panels to help debtors. All three panels can provide free advice and help to an eligible borrower.
The other panels are:
- A panel of solicitors, established by the Legal Aid Board, and
- A panel of accountants was established by the Citizens Information Board.
Benefits
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Protection from your creditors
Your qualified professional advisor (also known as a PIP) will negotiate with your creditors on your behalf, putting an end to any demands for unpaid debt – no more phone calls, letters or visits.
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Affordable repayments
Under this Personal Insolvency Arrangement you agree to repay a percentage of your overall debts that you can afford in monthly payments over a given period of time.
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No surprise changes
A Personal Insolvency Arrangement is a legally binding arrangement between you and your creditors; so it cannot be changed without the agreement of both parties, meaning no surprise changes such as additional interest or charges added along the way.
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Reasonable standard of living guaranteed
While you are making these repayments you are entitled to a reasonable standard of living. You will not be told how you should spend your allocated reasonable living expenses, so you are still in complete control of your spending.
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Peace of mind
Once your final agreed monthly repayment is made and you have kept to the terms of the arrangement, your creditors will write off your remaining unsecured debt and your remaining secured debt will be restructured.
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Credit rating
Entering into a Personal Insolvency Arrangement should indicate to potential lenders that you are proactively addressing your financial situation, and on completion of the arrangement you will be solvent, which means you could be more eligible to obtain credit. However, the decision on whether or not to give credit is up to the lender and this is always the case.
Costs
Just like any other professional providing a service, a PIP may charge a consultation fee in order to determine if you are eligible to apply. After that, any PIP fees are usually built into the PIA repayment plan.
If you are in home mortgage arrears you could be eligible for a free PIP consultation under a State-funded scheme, called Abhaile.
Get Help
How do I get a PIA?
First, arrange to meet with a Personal Insolvency Practitioner (PIP). Part of a network of qualified professional advisors regulated by the ISI, each PIP is an expert in debt advice, so don’t feel embarrassed about your situation; they can and want to help you reach a solution. They will assess your options and prepare a tailored solution that best suits your needs.
PIPs are located around the country and contact details can be found here or by calling the ISI’s information line 01 764 4200.
Frequently asked questions
Start gathering details of your debt – including a list of how much you owe and to whom, details of payments you have missed, as well as details of your income, average spending needs and any assets you may have. Bring these with you to your meeting with the PIP, and they will let you know if a PIA is the right solution for your situation.
DEBTOR: Gets protection from creditors, gets a solution that has certainty, is entitled to a reasonable standard of living, gets write down and/or write off of debt, gets remaining secured debt restructured, gets back on track financially, gets to stay in the home (in the majority of cases).
CREDITOR: Gets engagement with the debtor through their intermediary (the PIP), gets a solution to the backlog of debt , gets certainty of a resolution, is guaranteed some return on money lent, the majority of creditors are agreeing to proposals.
PIP: Assists distressed debtors in reaching a long-term debt solution, may charge a consultation fee to advise the debtor, is usually paid out of the overall sum the debtor agrees to pay to the creditor, deals with all creditors on the person’s behalf.
- Your chosen PIP will help you complete a form that gathers details of your financial situation. If the PIP agrees that you are suitable for a PIA, they will help you fill out the necessary forms.
- Your PIP will then apply to the court for a protective certificate on your behalf. You are not required to go to court. Once you get this you will have court protection against your creditors while your PIA is being put in place. This means that they cannot contact you during this time – no more phone calls, letters or visits.
- Your PIP will put forward the proposed PIA to your creditors. If they agree to it, and the court is happy with your application, your PIA is formally agreed. Of the thousands of cases that have already gone through the ISI’s system, the majority of creditors are accepting proposals. In some cases, where a creditor rejects a PIA, the decision can be reviewed and reversed by the Court.
If your circumstances change during the term of your arrangement, affecting it either positively or negatively, the PIA can be amended by your PIP as necessary.
You will get reviews of your PIA at least once a year.
Entering into a PIA should indicate to potential lenders that you are proactively addressing your financial situation. On completion of the arrangement you will be solvent, which means you could be more eligible for credit in the future. The decision on whether or not to give credit is up to the lender and this is always the case.
A PIA can cover any period up to 6 years. The length of an arrangement is to be agreed by all parties involved and will depend on what is being proposed by your PIP and your personal circumstances.
At the end of the process, you will be free from unsecured debt and from your remaining secured debt to the extent agreed under the terms of your PIA. After a PIA you may still have a mortgage, but the repayments will be manageable.
Related Documents
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PIPs are qualified professionals, regulated by the ISI, with the relevant expertise to help you reach a permanent solution for your debt problems.