A Personal Insolvency Arrangement (PIA) can last anywhere from 1 day to 72 months. (84 months in certain circumstances.)
Any PIA that is closed out ahead of the 84 month period is called an Accelerated Personal Insolvency Arrangement.
Personal Insolvency Practitioners (PIPs) who have been working with the personal insolvency regime have realised that there is no restriction on a PIA having to last 72 months. Once you can get the majority of creditors to agree to a proposal you can close out that arrangement. For many this is an effective option that means an accelerated PIA can be the fastest route back to solvency. Better and faster than even the quickest UK Bankruptcy.
Average Completion Time 3 to 6 Months
AT GT Debt Solutions our average Accelerated Personal Insolvency Arrangement lasts 6 months although many complete within 3 months.
In these cases there is a requirement for the debtor to pay a lump sum. Some debtors will have that lump sum to hand, whereas others might need six months or more to get that lump sum from family and friends.
Some banks want you to surrender the property and others are happy for you to sell it and this can also effect completion times.
With a sale involved the generally closing out time is within 6 months and then it takes another 3 months to finalise the paperwork and close out the arrangement by issuing a you with a completion statement.
Accellerated PIAs & Lump Sum Arrangements
Over 30% of the solutions GT Debt Solutions have facilitated to date have included a one-off payment from a relative or friend.
This type of solution can clear all your debts immediately and leave you with a completely fresh start within one year or less.
Lump sum arrangements are probably the most effective ways to clear all debt in the shortest time and have the least amount of “side effects”.
In particular they are very efficient for the large volume of debtors who fall under the official Reasonable Living Expenses (RLE’s). Read more about this here.
You might be surprised at how small a lump sum is needed for this type of settlement. Everything is relative to your personal situation.
Believe it or not the Irish lending institutions have moved on from a few years ago and now they want a speedy resolution just like you do. However, what is required is a credible, trusted third party to negotiate a final arrangement.
Accelerated PIA versus Banktuptcy
A large proportion of people in the bankruptcy queue would do substantially better from an Accelerated Personal Insolvency Arrangement.
It seems that very few people are aware of this and are being badly advised. Here is why:
3 to 5 Years Vesus Immediate Completion
In an Irish bankruptcy you will be in it for 3 years plus potentially have a bankruptcy payment order for 5 years. If your circumstances change positively within that period you will have to contribute more based on your improved financial situation. In an accelerated PIA you are completely finished once it is approved and the completion statement issued. If you win the lotto the next day you get to keep it all!
Sometimes a creditor will try to keep a PIA open because perhaps they see the debtor has been a good earner in the past and hope they can get more of a contribution down the line. However, if they do then they have to pay the PIP annual fees and for example our minimum annual fees are €600 plus VAT (paid by the creditors not you) and this is a real cost to the lender so generally we find this is an incentive for them to agree to close it out sooner if appropriate. It is all often down to good negotiating which is why using the services of an active PIP like GT Debt Solutions makes sense.
With any bankruptcy your credit rating will be permanently affected since you will always be asked on loan applications if you have ever been a bankrupt.
With an accelerated PIA your name will be taken off the insolvency register inside six months.
Even though you may still be asked about your PIA in the future, lenders consider it far better that you entered into a consensual arrangement and completed that arrangement rather than just walking away through a bankruptcy. It actually demonstrates financial responsibility. Yes like many, you got into trouble but you dealt with it through negotiation and completed the arrangement to the satisfaction of all parties.
Remember the day you enter into a PIA you are rebuilding your credit rating.