Donegal man first in country to get new debt settlement deal

What is believed to be the first ever debt settlement arrangement protection certificate was issued at the Circuit Court in Monaghan yesterday.

The certificate issued to a Donegal man who will now have the protection of the courts for 70 days giving him time to come to a settlement with his creditors. He was advised by advocacy group New Beginning. It is understood the debt involved was more than €100,000.

A debt settlement arrangement is one of the three new debt resolution mechanisms introduced under the Personal Insolvency Act 2012. It is designed for individuals who have no prospect of paying off their debts in the next five years.

Unlike a personal insolvency arrangement, a debt settlement arrangement applies to unsecured debt only and has no maximum figure. The arrangement must be agreed by the debtor and then approved by 65 per cent of his creditors. It can be applied to debts including the balance of a mortgage owed to a lender once the property itself has been dealt with, such as through sale or repossession.

If creditors agree to the arrangement, monies are paid out to them over a period of five years after which the debtor is discharged from his debts.

Speaking last night, barrister Vincent P Martin, a co-founder of New Beginning, said the case represented a milestone and a chance for ordinary people to rid themselves of the shackles of debt. It was the first such certificate in the country, he said, and no creditor can now move against the man while the certificate is in place.

"It is the first step in the recovery for many of the ordinary people of Ireland who can begin to again embrace a fresh start," he said.

“Many of Ireland’s former wealthiest have long since secured a financial resolution, now it is the turn, long overdue, of the ordinary people of Ireland to reclaim their futures.”