The Personal Insolvency Act 2012 introduced formal, structured methods for resolving personal debt in Ireland through three main solutions:
- Debt Relief Notice (DRN)
- Debt Settlement Arrangement (DSA)
- Personal Insolvency Arrangement (PIA)
These mechanisms aimed to offer alternatives to repossession and bankruptcy, with a Personal Insolvency Practitioner (PIP) acting as a neutral intermediary between debtors and creditors. The goal was to facilitate negotiated settlements under temporary court protection.
Originally, creditors could veto a PIA proposal without a right of appeal for the debtor. Given the economic context—housing market collapse, negative equity, and widespread unemployment—creditors often rejected PIAs involving significant debt write-downs. This limited the effectiveness of the regime.
To address this, the Personal Insolvency (Amendment) Act 2015 empowered the courts to override creditor vetoes under section 115A, allowing judges to enforce a PIA if certain legal conditions were met. This marked a turning point, increasing the number of applications but also triggering more litigation, with these cases referred to as “115A appeals.”
The 2021 amendment removed the requirement that debt had to be in arrears before January 1, 2015, expanding access to 115A appeals. This change was initially intended to guard against strategic defaults and economic instability.
Despite these reforms, mortgage arrears remain a serious issue. As of late 2024, 4% of principal home mortgages were over 90 days in arrears—affecting around 26,899 accounts, or approximately 50,000 borrowers.
By 2025, the insolvency landscape consists mostly of older debts, possession orders, and cases involving investment fund creditors. As most individuals have only one secured debt (usually their mortgage), the PIA remains the primary solution. However, as creditors increasingly reject proposals, PIPs are becoming more innovative in crafting viable arrangements.
For more information on DRNs, DSAs, PIAs or the Personal Insolvency Legislation generally, please contact Bernard King.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
