Debt Problems and Solutions to Debt Problems in Ireland.

As fears of a recession in Ireland loom larger many people are worried about their finances and those with larger credit commitments are concerned that an economic recession may equate to real personal debt problems. This article explains exactly what to do if you are experiencing debt problems.

Firstly, Understand The Nature of Your Debt Problem.

Debt problems occur for a number of reasons but essentially debt problems come about as a result of two overall scenarios - a significant change in an individuals personal circumstances or the gradual snowball effect of being over committed to credit facilities resulting in a debt problem. The second scenario is often referred to as having 'lifestyle debts'. Plainly speaking this translates to 'living beyond your means' for many people in reality. In 2008, those people with lifestyle debts are increasingly representing a higher proportion of Ireland's population with debt problems that are turning to debt help professionals such as the Debt Advice Team

It is important to understand the root causes of your debt problems as then you will be in a position to honestly evaluate your circumstances with a view to putting in places measures to fix the problem. In the majority of cases this does mean putting together an honest budget plan and making some changes to your spending habits in order to prioritise and pay bills and to deal with unsecured debts in a sensible fashion.

How To Know if You Have Problem Debt

If you are using credit to buy everyday household goods such as food and sundries or if you are turning to credit facilities to pay your mortgage or rent then this may indicate that you are having debt problems. When people start paying for household items using unsecured credit cards it usually indicates that there is a wider debt issue behind the scenes. This typically reflects the fact that funds in the bank account have run out or the bank overdraft has been reached hence turning to credit cards to buy regular household items.
Most people will understand early on that they are having financial problems and will be aware of the implications of using credit cards further as this usually just serves to move the individual deeper into debt. However, even though many people will acknowledge to themselves that they have a debt problem this does not necessarily mean that they will seek help early on in order to address the financial issue they have.

Unfortunately many people choose to almost deny that the debt problem is real and continue down a path that ultimately makes their situation worse. It is always the sensible thing to do to obtain debt advice and help from experts who will be able to advise you of your options and work with you to help you get out of debt and reduce the stress levels that debt problems bring about.

Solutions to Debt Problems in Ireland

Debt Repayment Plans
Debt solutions in Ireland are somewhat limited when compared with other countries in Europe and the USA. In Ireland a professionally managed Debt Repayment Plan can be used to prioritize spending towards more important bills such as food, mortgage or rent and energy supply and to make reduced offers of repayment to unsecured creditors for debts owed on things such as credit cards, bank or credit union loans and overdraft facilities. Debt repayment plans are an informal way of dealing with debt problems and can be put in place by debt management solicitors very quickly.

Full & Final Settlement Negotiations
Full and final settlement negotiations is a strategy that can be used to offer creditors a lump sum payment as a full and final settlement of a debt in one transaction. Full and final settlement negotiations are usually undertaken by debt management experts on behalf of the person experiencing financial problems. Full and final debt settlement offers usually allow the creditor to obtain a significant percentage of their debt repaid in one go allowing them to close the matter off and saving them time and expense for chasing he debt or instructing solicitors to pursue debt recovery litigation. There are many circumstances when a person may be able to take advantage of the full and final settlement service offers however typical circumstances are as follows:

* Money Raised From Remortgaging A Property
* Money Raised From The Sale Of A Property
* Cash Inheritance Awards
* Cash Donation By Family Members
* Redundancy Payment Award
* Legal Compensation Award
* Money Raised Via Sale of Share Ownership

Bankruptcy in Ireland

Unlike in many other countries such as the UK and USA where bankruptcy legislation has been modernised to enable people with overwhelming debts to obtain access to the protection of the courts relatively easily, Ireland's bankruptcy legislation is arguably out of date and in much need of modernisation.

A debtor does have the right to instigate a petition for bankruptcy at the court and likewise creditors can also start bankruptcy proceedings. If a debtor is unable to meet their repayment obligations to their creditors then the debtor may ask the court for a bankrupcty judgment provided that the individual has a realisable estate worth at least €1900.00.

Getting Discharged From Bankruptcy in Ireland

Because of the complexities of the current bankruptcy legislation in Ireland many people feel that obtaining a discharge from bankruptcy may realisticaly be complicated and as such prefer to deal with their debt problems without entering into the Irish bankruptcy process. Discharge form bankruptcy in Ireland can be achieved in a number of ways and these are set out below. It is worth noting however that enough funds must have been realised in the via the bankruptcy in order to cover the costs, fees, expenses and preferential debts arising in the bankruptcy.

Discharge After Twelve Years

Where the bankruptcy has lasted for twelve years, the debtor's property has been fully realised, and the court is satisfied that the debtor has disclosed any property acquired since bankruptcy and that it would be reasonable and proper to discharge the debtor from bankruptcy.

Discharge From Bankruptcy After Payment Of Debts In Full

Where the debtor's creditors have been paid in full, together with such interest as the court allows. Where the bankrupt's property is sufficient to permit payment of interest at the rate payable on judgements, that rate will apply .

Discharge From Bankruptcy With Full Creditor Consent

A bankrupt can be discharged from their bankruptcy statues where all of the debtor's unsecured creditors have consented to the discharge.

Discharge After Making Composition With Creditors

Where the debtor has provided the Official Assignee with the funds needed to meet a settlement (referred to as a Composition After Bankruptcy ) with their unsecured creditors - for a settlement to be effective, it must receive the support of at least sixty per cent in number and value of the unsecured creditors voting on it.

Discharge After Paying Fifty 'Pence In The Pound'

Where the debtor's property has been fully realised and his/her creditors have received fifty pence in the pound on their debts.

Further Advice

To discuss your debt options please feel free to chat with the Debt Advice Team by calling us free of charge on 1-800-550-330 and we will be happy to examine all of the debt solutions and options available to you. Alternatively, you are welcome to start a secure online chat with one of our advisors by clicking on the 'Live Help' button at the top right of this page.

You can of course simply complete our quick contact form by clicking here and an advisor wil contact you at the time and method that you specify.