DRN
STEP BY STEP
EXAMPLE
TO HELP EXPLAIN SOME OF THE CONCEPTS CONTAINED IN
THE PERSONAL INSOLVENCY LEGISLATION, THE INSOLVENCY SERVICE
OF IRELAND HAS CREATED SOME POSSIBLE SCENARIOS TO
ILLUSTRATE HOW EACH OF THE THREE SCHEMES MAY OPERATE IN
RESPECT OF A DEBTOR, PERSONAL INSOLVENCY PRACTITIONER OR
APPROVED INTERMEDIARY, CREDITORS, AND THE COURT.
THESE SCENARIOS MAY BE AMENDED OR DEVELOPED IN THE FUTURE
WHEN ACTUAL CASES ARE PROCESSED TO A SUCCESSFUL
CONCLUSION IN ORDER TO MORE ACCURATELY REFLECT SUCCESSFUL
OUTCOMES APPROVED BY THE COURT.
IT IS IMPORTANT TO EMPHASISE THAT THESE POSSIBLE SCENARIOS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AS TO HOW A PARTICULAR
ARRANGEMENT MIGHT WORK IN PRACTICE, AND ASSUMES A
PRAGMATIC AND REALISTIC RESPONSE BY CREDITORS.
THE ISI DOES NOT PROVIDE FINANCIAL ADVICE.
APPROVED INTERMEDIARIES IN THE CASE OF DRNS, AND PERSONAL
INSOLVENCY PRACTITIONERS, IN THE CASE OF DSAS AND PIAS, ARE
AVAILABLE TO ASSIST DEBTORS.
DATE OF PUBLICATION: APRIL 2013
THIS SCENARIO IS DESIGNED TO ILLUSTRATE THE DETAILED STEPS INVOLVED IN THE DRN (DEBT
RELIEF NOTICE) PROCESS.
Brian is a 28 year old, single, office worker earning a net monthly income of €1,700. He lives in rented
accommodation and rent is €620 per month. Over the years, Brian built up debts on his credit card
totalling €9,000. He also has a credit union loan of €3,200 and has fallen into arrears with his
electricity provider amounting to €800.
Brian’s only assets are a car worth €1,800, €200 cash and some household furniture and appliances
worth about €3,500. Brian’s monthly debt obligations amount to €350. He recognises that he cannot
pay his debts as they fall due and realises he is insolvent. He believes he might be eligible to seek a
DRN and selects an Approved Intermediary (AI), which he contacts in order to discuss his current
financial situation.
A potential solution to Brian's insolvent position is set out in the DRN scenario publication. Set out
below is the step-by-step guide as to what the process involves. Debtors will be assisted by an
Approved Intermediary throughout the process.
BRIAN’S STEP-BY-STEP JOURNEY
REALISES SITUATION
1. Brian recognises that he cannot pay his debts in full as they fall due and realises that he is
insolvent.
SEEKS INFORMATION
2. Brian heard about the Personal Insolvency Act 2012 on the news. He visits the ISI website
www.isi.gov.ie and reads the ISI guide to a Debt Relief Notice (DRN), one of the new Personal
Insolvency measures introduced under the Act. Based on the information he read, Brian is
hopeful that he might be eligible to seek a DRN. He checks the list of Approved Intermediaries
(AI) on the ISI website and selects the AI situated nearest to him, Fiona Ryan.
3. Brian contacts the AI and they arrange to meet to discuss his options. He is advised to come to
the meeting equipped with detailed information covering his financial affairs.
MEETS WITH APPROVED INTERMEDIARY
4. Brian meets with the AI, and they go through his financial affairs. He gives the AI details of his
debts, his assets, income and his expenditure. He shows her his payslips, credit card
statements, utility bills and recent bank statements. He explains that despite his efforts to
renegotiate his repayments in recent months, he simply cannot afford them.
APPROVED INTERMEDIARY’S ADVICE
5. The AI takes notes throughout the meeting and considers the information Brian has provided.
Based on the information supplied, the AI advises Brian that she believes he meets the
eligibility criteria to apply for a DRN and that it is the best option for him to pursue at this
time.
6. The AI explains to him the general effect that receiving a DRN would have on Brian, were he to
successfully obtain one. She advises that if Brian is granted a DRN he will be discharged from
his €13,000 debt at the end of the three-year supervision period and his specified creditors will
not be able to pursue him for any more payments. She also advises that there are potential
consequences for Brian if he is granted a DRN such as that Brian’s details (such as his name,
address, year of birth, and the fact that he obtained a DRN) would be placed on an electronic
Public Register of DRNs which can be accessed by members of the public. She advises him that
it is an offence to be dishonest in a DRN application or during the three-year supervision
period that follows. Once a DRN is granted the obligation is on Brian to be open and honest
and to act in good faith throughout the process.
TIME TO REFLECT ON SITUATION
7. The AI advises Brian to think about whether or not he would like to proceed with an
application. She urges him to carefully consider the implications and to make a decision. The
AI tells Brian that if he decides to apply for a DRN he will be required to attend another
meeting with her and to complete a Prescribed Financial Statement (PFS) and application
form, a detailed electronic form designed to capture a complete picture of a person’s financial
circumstances. The AI assures Brian that she will assist him to complete the PFS. She tells him
that if he decides to go ahead with the application he should bring additional supporting
documentation to the next meeting.
8. Brian goes home and considers his situation. He talks it over with a family member and
decides to proceed with an application.
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DECISION TO PROCEED WITH APPLICATION
9. Brian makes an appointment to meet with the AI a second time. He confirms in writing that
he wishes to apply for a DRN and to proceed with his application and fully discloses his
financial affairs to the AI. Brian gives his written consent to the making of enquiries by the AI,
as appropriate, to verify the value of a debt or other liability disclosed by him and to the
disclosure by the AI of his personal data to the extent necessary for such an enquiry.
APPLICATION FORM
10. The AI fills out the PFS form and application form with Brian. When the forms are complete,
the AI reviews them.
11. The AI reviews all documentation and satisfies herself that Brian is eligible to apply for a DRN.
She signs a statement confirming that, in her view, the PFS is true and accurate and that Brian
satisfies the eligibility criteria.
12. Brian has to sign a statutory declaration in the presence of a person authorised by law to take
and receive statutory declarations such as a practicing solicitor affirming that the PFS is a
complete and accurate statement of Brian’s assets, liabilities, income and expenditure.
13. The AI scans various documents electronically to form part of the application.
14. Brian is asked to complete and sign a document to accompany his application confirming that
he meets the eligibility criteria for a DRN.
CONSENT FORMS
15. Brian must also give his written consent to enable:
a. the AI to disclose Brian’s personal data to the ISI;
b. the ISI to process Brian’s application;
c. the ISI to disclose Brian’s personal information to the creditors to the extent necessary
to process his application;
d. the ISI to make any enquiry related to Brian to the extent necessary to process the
application.
He must also sign a document stating whether, to the best of his knowledge, there is any
judgment or court order in force against him which relates to a debt which is to be included in
the DRN.
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AI SUBMITS APPLICATION TO THE ISI
16. The AI will then submit Brian’s application for a DRN to the ISI (electronically) on his behalf.
She also sends a hard copy of Brian’s statutory declaration (referred to in point 12 above) to
the ISI by post.
17. At this point the ISI checks the application. The ISI could request more information regarding
the application; however, in Brian’s case the ISI is satisfied with the application provided.
18. The ISI forwards to the Court (i) a certificate stating that the ISI is satisfied with Brian’s
application (ii) the application and, where relevant, (iii) supporting documents. The ISI will
also notify the AI that Brian’s application has been forwarded to the Court for consideration.
COURT GRANTS DRN
19. On the basis that the Court is satisfied that Brian meets the qualifying criteria, Brian is granted
a DRN in respect of his €13,000 debt and issues the DRN.
DRN RECORDED ON PUBLIC REGISTER OF DRNS
20. The ISI records Brian’s DRN on the Public Register of Debt Relief Notices. Brian’s name;
address; year of birth; the date the DRN issued and possibly other details will be listed on the
Register. The Register is available for public inspection.
DRN TAKES EFFECT
21. The DRN takes effect from the date it is entered on the Register. The three-year supervision
period applies from that date.
22. The ISI notifies the AI and Brian that the DRN application was successful. Brian is advised that
he has been granted a DRN and that he is now subject to a three-year supervision period. A
copy of the DRN and a Statement of his obligations during the lifetime of the DRN are issued
to Brian. His main obligation is to act in good faith and inform the ISI if his circumstances
change materially during the supervision period.
23. The ISI will also notify Brian’s specified creditors (that are included in the DRN) that Brian has
been granted a DRN and that they cannot pursue him for debts owed while the DRN is in
effect. The specified creditors will each be sent (i) a copy of the DRN; a statement of the debt
it covers; a copy of Brian’s PFS and a notice of the creditor’s right to appeal being included in
the DRN.
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SUPERVISION PERIOD
24. Should Brian’s financial circumstances change materially during the supervision period Brian
must tell the ISI
25. If Brian’s net monthly income increases by more than €400 he must inform the ISI and
surrender half of that money to the ISI for onward distribution to his creditors. If Brian
receives a gift or sum of money of €500 or more, he must tell the ISI and surrender half of that
sum to the ISI for onward distribution to his creditors
26. If he is in a position to do so, Brian can make payments off the €13,000 debt during the
lifetime of his DRN, but only through the ISI. He must not make any payments to his creditors
directly. If at any stage during the supervision period Brian is in a position to pay a total of 50%
or more of the €13,000 he owes the DRN would end immediately and he would be discharged
from the remaining debt.
27. Assuming that Brian’s financial circumstances remain the same during the three-year
supervision period, (i.e. that step 25 above does not apply in his case) Brian will be discharged
from the €13,000 debt owed after that period; he will receive a Debt Relief Certificate from
the ISI confirming that fact and his details will be removed from the public Register for Debt
Relief Notices within 3 months of completion. The ISI will also notify Brian’s creditors that the
Certificate was issued. There are special circumstances where the ISI may apply to the Court to
have a DRN amended or terminated.
28. Brian is now released from the €13,000 debt that he was unable to repay and the 3 creditors
specified in the DRN cannot pursue him for payment.
DRNS ARE ONLY INTENDED FOR DEBTORS WHO
ARE GENUINELY UNABLE TO REPAY THEIR DEBTS.
THE ONUS IS ON THE DEBTOR TO BE OPEN AND
HONEST AT ALL TIMES DURING THE PROCESS.
UNDER THE PERSONAL INSOLVENCY ACT 2012 IT
IS A CRIMINAL OFFENCE TO KNOWINGLY OR
RECKLESSLY GIVE INFORMATION WHICH IS FALSE
OR MISLEADING IN AN APPLICATION FOR A DRN.
PENALTIES OF IMPRISONMENT, A FINE OR BOTH,
MAY APPLY FOR SUCH AN OFFENCE.
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