This week, Colm Arthur of Arthur Insolvency Services Limited talks to Topic about Unsecured debt and the effect it can have on your ability to borrow.
Personal Insolvency and unsecured debt
Unsecured debt in arrears can affect your ability to borrow, Revenue debt will prevent access to your state pension.
Personal Insolvency Arrangements (PIAs) have been a vital tool in helping people restructure their mortgages and, in most cases, stay in their family home. However, your Personal Insolvency Practitioner can also help with unsecured debt, such as residual debt from the sale of a property, credit card or overdraft debt, Revenue debt or trade debt for sole traders.
The Central Credit Register (CCR) operated by the central Bank of Ireland maintains an up-to-date record of all liabilities to financial institutions. Indeed, when you apply for a loan, your financial institution will most likely consult this CCR as part of your loan application evaluation. It is important therefore to ensure loan repayments are up to date or an alternative repayment arrangement is agreed with your lender.
Revenue debt will prevent you from drawing your state pension, it is therefore advisable to seek advice on Revenue debt well in advance of the state pension age. It is possible to put a repayment plan in place using the Revenue online system, or with your accountant.
In circumstances where your income is not sufficient to pay the debt in full, a debt settlement arrangement (DSA) can restructure unsecured debt to an affordable level. Your Personal Insolvency Practitioner (PIP) will assess your situation, establish your repayment capacity and show you what your DSA would look like both in terms of amount to be paid per month and duration.
The standard DSA lasts for five years, however DSAs have been completed in as little as one month. The duration depends on the borrower’s individual circumstances.
Once a DSA is in place, your debt is now restructured and payments going forward are kept up to date, the financial institution will cease reporting arrears to this CCR. Any unpaid unsecured debts can lead to your creditor applying to the court for judgment against you, such judgments can be registered on your family home our other assets.
You can access your credit report by logging onto the Central Bank website here this link. At Arthur Insolvency Services we obtain a CCR report as part of our assessment of your case.
For more information, contact Arthur Insolvency Services Limited on 044-9341860 or see capip.ie
