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Insolvency

Ireland now has the most powerful personal insolvency laws in the world.

These new laws are designed to assist people with unsustainable debt by restoring them to financial solvency while at the same time securing the family home and the tools of one’s trade.

There are 2 types of Insolvency Arrangement – a Debt Settlement Arrangement (DSA) and a Personal Insolvency Arrangement (PIA).

Both are arranged by a Personal Insolvency Practitioner (PIP). A PIP is a specialist who is licensed by the Insolvency Service of Ireland to provide services under the Personal Insolvency Act 2012.

Example of a DSA

John and Mary sold their ‘Buy to Let’ property and there is now a residual debt of €100,000. They have other unsecured debts of €25,000 - so their total unsecured debt is now €125,000.

The net household income is €54,000 (€4,500 per month). They have 3 children and their mortgage on the family home is €1400 per month.

They have met a PIP who has advised that they can afford to pay €300 per month towards their debt of €125,000. They can agree to pay this amount for 5 years meaning a total payment of €18,000. In the DSA the balance of €107,000 will be written off in full.

In this same case a family member has agreed to advance John and Mary €16,000. That is offered in full and final settlement of the debt of €125,000 and the remainder of €108,000 if written off in full.

Family now are released from unsustainable debt and can move on with their lives.

Example of PIA

John and Mary have a family home valued at €300,000 with an outstanding mortgage of €450,000. The interest rate is 3.75% and the term is 20 years. Full mortgage payments are €2668 per month.

They have sold their ‘Buy to Let’ property and there is now a residual debt of €100,000. They have other unsecured debts of €25,000 so their total unsecured debt is now €125,000.

The net household income is €54,000 (€4,500 per month). They have 3 children and cannot meet monthly payments on their home mortgage or their other debts.

They have met a PIP who has proposed as follows:

  • Family Home mortgage reduced to €300,000 – term extended to 26 years – interest rate reduced to 3% = Monthly payments of €1400
  • Payment of €300 per months on all other debts for 6 years (€21,600) and all remaining written off.

Family now has an affordable family mortgage and all other debts are written off in full – either by payment of €300 per month for 6 years or lump sum payment of €20,000.

 

Debt Solution service highlights

What New Beginning can offer you:
  • Informally dealing with the bank
  • An all inclusive bankruptcy service
  • Financial review to protect the future
  • Refinancing opportunities
  • Legal representation and advice
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  • Debt Management

    In the debt solutions aspect of New Beginning, advisers meticulously go through each client's mortgage case and propose the best

  • Debt Negotiation

    Through our regulated debt management firm New Beginning offers advice and negotiation services on mortgage and commercial debts. Our experts
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Worried about debt?

We can help you to plan and become debt free.

What should I consider when I have accepted a restructured mortgage?

Many clients have dealt with the banks directly in recent years to restructure their mortgage debt and have been offered split mortgages, term extensions and part capital and interest deals from their lenders. While this keeps the roof over client’s heads it often leads to 2 main financial planning issues.

  1. Life Insurance Shortfalls
  2. Future Residual Debt

While the clear and obvious benefit to accepting one of these deals is that there is now no immediate threat to your home, it is important to complete the process prudently. By this I mean plan for the future and address the likely shortfall in your life insurance and consider how you are going to pay off the balance of your mortgage. The mortgage has not been written down, just restructured. You still have to pay it, just in a different way now.

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What customers say about us

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When I came to New Beginning I was at my wits end. I had been trying to deal with the banks myself and was getting nowhere. I met with someone at New Beginning who took me through the whole situation and gave possible outcomes I didn’t know existed! They took over my case and had it sorted within a few months. I now have a mortgage I can afford and am on the road to recovery!
The care and professionalism I experienced at New Beginning was unparalleled. They really took the time and energy to understand my situation to find the best solution. Their genuine passion and commitment to helping people in tough times was comforting and allowed me to focus a bit more attention to my family.
I attended a seminar held by New Beginning in Dublin and it really helped me understand more about how to deal with my situation.  They taught me about different strategies I could use to negotiate against the funds and banks and also about the different insolvency rules.  I learned so much that day and the best part was the seminar was all completely free!
I was struggling to deal with the banks and with my other unsecure debt and I didn’t really know what was going on. I decided I needed someone on the outside to have a look at my situation, that’s when I found New Beginning. I received professional advice tailored to my situation. We discussed all the possible options available and they recommended the best solution for me, which was bankruptcy. It’s such a relief knowing this time next year I will be out of bankruptcy and debt free.
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