debt settlement

The Documents You’ll Need for a Debt Settlement Arrangement

Debt Settlement Arrangements are one of three new forms of “personal insolvency” introduced in Ireland in 2013. While take-up so far has been limited, it seems likely that as the system becomes more established increasing numbers of debtors will turn to such debt deals for financial relief. They provide an opportunity to resolve serious debt problems without having to resort to bankruptcy. What documents will you need to provide if you want to set up a Debt Settlement Arrangement (DSA)?

These arrangements can only be set-up by a Personal Insolvency Practitioner (PIP). If you think that a DSA will be the best way to deal with your debts the first step may be to contact a PIP to review your circumstances and to receive advice on your options. If they advise you to proceed with a DSA and you’re minded to agree the administrative set-up process can begin.

5025164562_6af1ac753c_nPart of this set-up process will include providing your Personal Insolvency Practitioner with various types of documentation. The PIP has a responsibility to verify some of the facts and figures that they will have discussed with you. This process is partly to meet the PIP’s regulatory requirements, but it’s also to confirm that you’ve been given the right advice and to encourage your creditors to enter into a debt deal with you.

The PIP will need to confirm your identity. Documents provided to you by the Government and well-regulated financial institutions are likely to be requested for this purpose. Bank statements may help to confirm your identity and they will also cover off a number of other purposes as we’ll describe in the following paragraphs.

Your Debt Settlement Arrangement will usually involve proposing a monthly payment to be made into your DSA via the PIP. This payment will be set at a level that enables you to live reasonably but which also demonstrates a commitment to your creditors to repay what you can afford to. The level of this monthly payment will partly be determined by your income. For this reason you’re likely to be asked to provide recent payslips, though other means of verification may be accepted if you’re self-employed and don’t have them. Your bank statements may help to further verify your income.

As well as reviewing your income your PIP will need to factor in the money that you and your family need to live reasonably. In particular they’ll want to confirm your housing costs (mortgage statement, rental agreement, bank statements) and any childcare costs that you have (invoices, bank statements).

Many other types of expenditure aren’t reviewed individually. That’s because a set of expenditure allowances have been created instead. They should collectively provide for you to be able to afford a reasonable standard of living while allowing you to retain some discretion over exactly how these allowances are actually spent. Some individuals and families will need to request that an exception is made to the system of fixed allowances, perhaps for example because someone has extra costs as a result of a physical condition or illness. If that applies to you it will be in your interests to be able to provide documentation that evidences these extra costs.

Having these types of documents ready for your Personal Insolvency Practitioner should enable them to help you sooner, provide the highest standard of advice and maximise the chances that your Debt Settlement Arrangement will subsequently be accepted by your creditors.

In the future the precise documentation required for a DSA may be specified in greater detail. Work is underway to create a “personal insolvency protocol” which could include an agreement between PIPs and banks about exactly how they verify the information that’s subsequently used and presented. Until that time the requirements of individual PIPs may vary slightly so it would be sensible to confirm with any PIP that you approach regarding a DSA exactly what documents they’ll need from you.

Debt-Settlement-Arrangements.ie is a debt advice online resource. On our website you can find out everything you need to know about debt settlement arrangements and also the other options to deal with debt problems in Ireland. If you have a question that isn’t answered on our pages you can ask a panel of experts in our forum. You can also contact our experienced debt advisers for one-to-one advice based upon your unique circumstances and needs.

 


Fastest way to become debt free

Fastest way to become debt free

Eleanor Simpson is a debt counselor for Franklin Debt Relief, the leading company in debt settlement programs for consumers.

Are you looking for the fastest way to become debt free? Bankruptcy is no longer the best option, since the 2005 overhaul significantly reduced the number of consumers who qualify for financial relief. Balance transfers or ten-year consolidation loans are not quick fixes either. You could always work another job or sell your possessions, but the extra effort and stress is often not worth the payoff. Fortunately you have access to experienced debt relief  professionals who will work with your creditors and can slash the amount you owe by up to 60%. Debt settlement services can help you become debt free in as little as 12 to 36 months. If you are behind on your credit cards, store cards, personal loans, etc. by 90 days or more, your creditors want money and they will settle to obtain it. Depending on your situation, you have two plans from which to choose: lump sum settlement or periodic payment settlement.

In a lump sum settlement, the debt relief service negotiates with individual creditors and collection agencies to find a
single, final payment that will end their harassment. This payment is typically 40 – 60% of your balance and completely satisfies the debt. A lump sum settlement typically takes four to twelve months and then the debts are marked as settled on your credit report.

The second option is a periodic payment settlement. In this scenario, your debt relief service still negotiates with your
creditors, but you will continue to make payments until the settlement threshold is met. This option is convenient for
people who cannot afford to make a lump sum settlement payment, but it does take two to five years to complete. A
periodic payment settlement is still a better option that attempting to make minimum payments on high-interest credit
cards to become debt free.

Working with debt relief services is the fastest way to become debt free. Use the experience of these financial professionals to navigate complex legal requirements and convince your creditors to work with you. By negotiating a simple settlement agreement, you can gain a fresh start to your financial future.


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