Debt Relief Notice (DRN)
A Debt Relief Notice (DRN) is one of three new measures contained in the Personal Insolvency Bill 2012 which was published by the Irish Government in 2012. A Debt Relief Notice will allow for the write off of qualifying debt up to €20,000, subject to a three years supervision period, for insolvent persons who have ‘no income – no assets’ and who have no prospects of being able to pay off their debts in the next five years. Applications for a Debt Relief Notice have to be submitted by an authorized intermediary body on behalf of the debtor to a new Insolvency Service.
The disposable income limit is €60 per month after reasonable living expenses are paid and the assets limit is €400 excluding one motor vehicle with a value of no more than €1,200 and also excluding essential household appliances and tools required for employment or business. Excluded debts include taxes, court fines, family maintenance payments and service charge arrears.
Only one Debt Relief Notice is allowed in a lifetime and it is not allowed within five years of completing a Debt Settlement Arrangement or a Personal Insolvency Arrangement, the other two new personal insolvency measures being introduced in the bill.
The debtor must not apply for credit of more than €650 within the three years term, without informing the person providing the credit of the Debt Relief Notice.
Should the debtor’s income increase by more than €250 per month or if he or she receives gifts or windfalls of more than €500 during the three years term of the Debt Relief Notice, the debtor may be required to make payments to creditors via the Insolvency Service. At the end of the three years term, the Debt Relief Notice terminates, all qualifying debts are discharged and the debtor’s name is removed from the Register of Debt Relief Notices which is to be established and maintained by the Insolvency Service.
Debt Relief Notice (DRN) In A Nutshell
- Debts Up To €20,000
- Unsecured debts could be written off
- Three years supervision period
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John has recently lost his job. He lives in rented accommodation and his only income is social welfare. While working he built up €18,000 of credit card debt.
John applied for a Debt Relief Notice (DRN) from a recognised intermediary who sent all the required documents to the Insolvency Services for approval. The Insolvency Service will then issued a DRN to John and a three-year moratorium period will apply during which none of the creditors can pursue John for repayment of his debts. At the end of three years, if John adheres to the debt relief process and contributes accordingly, the debt will be written off and John will be debt-free.
© Copyright 2016. Anthony Joyce is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner.