What is a Personal Insolvency Arrangement (PIA)?

The Personal Insolvency Act 2012 introduced a new insolvency procedure called a Personal Insolvency Arrangement (PIA), you need to consult with a Personal Insolvency Practitioner (PIP) to apply for a PIA, which can include both secured and unsecured debts. 

• A PIA can be entered into between a debtor and one or more of his/her creditors.
• A PIA can include secured and unsecured debts, but certain debts cannot be included (excluded debts) in a PIA and certain other debts require the consent of the creditor prior to being included (excludable debts).
• A limit of €3m applies to the amount of secured debt that can be included in a PIA, unless all secured creditors consent to the inclusion of a higher amount.
• The PIA differs from a Debt Settlement Arrangement (DSA) as it includes secured debt.
• Secured debt is a debt backed or secured by an asset (e.g. a housing loan where a house is mortgaged to secure the loan debt).
• A PIA must be agreed by the debtor and approved at a creditors’ meeting by a qualified majority of creditors. In addition it must be processed by the ISI and approved by the Court.
• Under a PIA, a debtor’s unsecured debts will be settled over a period of up to 6 years and the debtor will be released from those unsecured debts at the end of that period, i.e. the balances outstanding on the unsecured debts at the end of the term will be written off.
• Secured debts can be restructured under a PIA (e.g. to provide for payments for a certain period or a write- down of a portion of negative equity).
• Depending on the terms of the PIA, the debtor may be released from a secured debt at the end of PIA period or the secured debt can continue to be payable by the debtor (although perhaps on restructured terms).
• A PIA can be extended to 7 years in certain circumstances.

Please consult the Insolvency Service of Ireland website for an approved PIP in your area at www.isi.gov.ie