What is a Personal Insolvency Arrangement?
A Personal Insolvency Arrangement (PIA) is a formal insolvency solution that can help people who are:
- struggling to repay their mortgage
- facing the threat of repossession
- dealing with unaffordable mortgage arrears
- unable to repay their debts
The main aim of a PIA is to protect your home and provide legal protection from creditors. It allows for affordable mortgage and debt repayments, usually through a restructure. Unaffordable debts are typically written off upon successful completion of the arrangement.
Is a PIA right for you?
Every debt solution has specific criteria. To determine what is suitable in your case, it is important to seek professional debt advice from a qualified source, such as:
- MABS (Money Advice & Budgeting Service)
- Citizens Information
- A licensed insolvency provider such as McCambridge Duffy
Your debt advisor will:
- Assess your current situation (household income, expenses, assets, debts etc.)
- Work out how much you can realistically afford to pay while maintaining a reasonable standard of living
- Determine whether you are insolvent and what your options are
- Advise whether a PIA is the most suitable option, or whether another solution would be more appropriate
Note: At McCambridge Duffy, all advice is free and without obligation. There are no upfront fees.
How to apply for a PIA
To apply, you must engage the services of a PIP (Personal Insolvency Practitioner); a professional authorised by the Insolvency Service of Ireland (ISI). McCambridge Duffy has four in-house PIPs, or you can find others on the ISI register.
How a PIA Works
- Your PIP prepares a Prescribed Financial Statement (PFS) and applies for a Protective Certificate (PC), which temporarily stops all creditor action.
- A proposal is drafted and sent to your creditors.
- If 65% of creditors (including 50% of both secured and unsecured creditors) vote in favour, the PIA is approved and the new terms take effect.
- You make affordable monthly payments over the agreed term.
- Your PIP manages the arrangement, carries out annual reviews, distributes payments, and remains available to help with any queries.
- On completion, any remaining unsecured debts are legally written off, and you continue with your mortgage on revised terms, which may include a lower interest rate or extended term.
Important: With McCambridge Duffy, if your PIA is not approved, you pay nothing. Fees are only charged if your PIA is accepted, and they are included in your affordable monthly payments.
When to consider a PIA
You may be eligible if:
- You are struggling to keep up with mortgage payments
- You have mortgage arrears that you cannot afford to repay
- Legal action or Repossession proceedings have begun
- You cannot repay your debts
- You live in Ireland
- You need a structured solution to regain control
Pros and Cons of a PIA
Pros
- Your mortgage is restructured to make it affordable
- You make manageable repayments on all debts
- You receive legal protection from creditors
- Interest and charges are frozen
- Remaining unsecured debts are written off at the end
- A lump sum can speed up the arrangement
Cons
- Requires creditor approval
- Your credit rating will be affected (although it may already be impacted)
- Missed payments can lead to failure of the arrangement
- Your name will appear on the public insolvency register
- You can only enter into a PIA once in your lifetime
Real PIA Case example:
Arlene from County Laois
Background:
Arlene, a nurse, experienced financial hardship after her husband had an accident and was unable to work. She became the sole income earner for the household, and managing both the mortgage and living costs on her salary alone became unsustainable. The added strain contributed to the breakdown of her marriage, and the couple began divorce proceedings.
Before PIA
- Mortgage: €394,921
- Judgment Mortgage: €5,735
- Interest rate: 7.5%
- Mortgage payment: €3,398.10
- Unsecured debts: €0
After PIA
- New mortgage balance: €220,000
- Judgment mortgage: €0
- Interest rate: 3%
- Monthly payment: €1,456.10
- Debt written off (secured debt): €180,656 (includes mortgage write-down and judgment mortgage cleared)
Arlene now has peace of mind, knowing that her payments are affordable, her home is secure and her debts have been addressed.
Need debt advice?
If you’re struggling with mortgage arrears or debt, you’re not alone and there are real solutions available. You can speak to a PIP or a member of our advice team for free debt advice. Our experienced team will listen, assess your situation, explain all options, and guide you every step of the way.
📞 Contact us today:
- Fill out the contact form below
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- Call us on 01 539 57 90
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