A DSA will address unsecured debt such as overdrafts, personal loans, credit/store card, personal guarantees etc. in excess of €20,000 with no upper limit. The legislation stipulates that an individual entering a DSA will not be required to sell their family home as part of the proposal.
If a PIP is satisfied that a debtor qualifies for a DSA they will apply to the ISI for a protective certificate in order to prevent creditors from taking any action against the debtor for a period of 70 days. During that time the PIP will assess the personal financial circumstances of the debtor and the extent of their assets and liabilities and their income and outgoings. Based on this information the PIP will determine what funds are available to pay creditors over a five or possibly six year period and will draft a proposal to be voted on by the creditors at a meeting. In drafting the proposal the PIP is required to outline the expected proceeds to creditors in the event that the debtor was adjudicated bankrupt. The proposal is put to a vote at a meeting of creditors and in the event that it is accepted by 65% of those present at the meeting it is binding on all creditors.
Once the proposal has been accepted and registered with the ISI the PIP will make arrangements to pay creditors in accordance with the terms agreed in the scheme. At the end of the period if the debtor has adhered to the proposal any un-discharged debt is written off.
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