What Is A Debt Relief Notice?

7th January 2013

Debt Relief Notices were one of three new debt solutions introduced to Ireland last year. They were created along with Personal Insolvency Arrangements and Debt Settlement Arrangements. Out of the three new options, the DRN was targeted at those with comparatively modest overall levels of debts, a very limited ability to be able to afford to repay them and little in the way of assets. 

As such they are a vital option for the most financially vulnerable who have become afflicted, often through no fault of their own, by unaffordable debts.

Sadly however, at the time of writing, not one person has yet benefited from a Debt Relief Notice being put in place. The Money Advice and Budgeting Service, an “authorised intermediary” that can theoretically set up a DRN for an applicant, discovered flaws in the legislation that made it unworkable. Thankfully it seems that these issues have now finally been resolved.

The issues discovered were both technical and practical. On the one hand there was a very restricted definition of exactly what a “debt” actually is. On the other hand there was a requirement to identify exactly when debts were originally incurred, a task that in fact is extremely difficult for an adviser dealing with a client who has limited written records related to their financial history.

Thankfully a series of legislative amendments have now taken place which should remove these barriers. It’s anticipated that those requiring a Debt Relief Notice will finally now be able to make some progress. 

Where can you find advice about whether a DRN would help you to deal with your debts? Some possible options include the Money Advice and Budgeting Service (MABS), a consultation with a personal insolvency practitioner (PIP) or by contacting our own in-house debt advice team.

In each instance the advisers will work with you to produce a record of your current financial position. This will include reviewing your debts, your income, your necessary expenditure and your assets. These financial facts will enable the adviser to tell you whether you qualify for a Debt Relief Notice or whether a different option makes better sense for you.

If you then decide to process a DRN you’ll need to find an “authorised intermediary” to work on your case and take it forwards for you. It’s understood that MABS has already received more than 175 applications to act as an “authorised intermediary” for Irish clients that want to proceed with this option. Their relative experience in this new area of personal insolvency might encourage you to seek their assistance in this process.