Personal Insolvency Act 2012
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Eligibility criteria for a Debt Relief Notice. |
26.— (1) Subject to the provisions of this Chapter, a debtor shall not be eligible for the issue of a Debt Relief Notice unless an application for such a Notice is made on his or her behalf in accordance with section 29 , and he or she satisfies the eligibility criteria specified in subsection (2). | |
(2) Subject to this section, the eligibility criteria referred to in subsection (1) are that the debtor, on the application date: | ||
(a) has qualifying debts that amount to €20,000 or less; | ||
(b) has net disposable income, calculated in accordance with subsection (5), of €60 or less a month; | ||
(c) has assets, calculated in accordance with subsection (6), worth €400 or less; | ||
(d) is domiciled in the State or, within one year before the application date, has ordinarily— | ||
(i) resided in the State, or | ||
(ii) had a place of business in the State; | ||
(e) is, taking into account the factors referred to in subsection (7), insolvent and has no likelihood of becoming solvent within the period of 3 years commencing on the application date, while also maintaining a reasonable standard of living for himself or herself and his or her dependants; | ||
(f) has not, during the period of 2 years ending on the application date— | ||
(i) entered into a transaction with a person at an undervalue that has materially contributed to the debtor’s inability to pay his or her debts (other than any debts due to the person with whom the debtor entered the transaction at an undervalue), or | ||
(ii) given a preference to a person that has had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference); | ||
(g) is not ineligible under subsection (4) or (8) for the issue of a Debt Relief Notice. | ||
(3) Where section 135 has been applied— | ||
(a) references in paragraphs (a) and (c) of subsection (2) to a debtor’s debts and assets, and | ||
(b) references in subsection (6)(b)(i) to the debtor’s savings, | ||
shall be construed as referring to the amounts concerned after such set-off. | ||
(4) A debtor shall not be eligible for a Debt Relief Notice where 25 per cent or more of his or her qualifying debts were incurred during the period of 6 months ending on the application date. | ||
(5) For the purposes of subsection (2)(b)— | ||
(a) “net disposable income” means the income available to a debtor, calculated in accordance with paragraph (b), less the deductions referred to in paragraph (c), | ||
(b) the following, in relation to a debtor, shall be taken into account in calculating his or her income— | ||
(i) his or her salary or wages, | ||
(ii) the welfare benefits (other than child benefit) of which he or she is in receipt, | ||
(iii) his or her income from a pension, | ||
(iv) contributions from other household members, and | ||
(v) any other income available to him or her, | ||
and | ||
(c) the following (where applicable), in relation to a debtor, shall be deducted from the sum calculated under paragraph (b): | ||
(i) his or her reasonable living expenses; | ||
(ii) income tax payable by him or her; | ||
(iii) social insurance contributions payable by him or her; | ||
(iv) payments made by him or her in respect of excluded debts; | ||
(v) payments made by him or her in respect of excludable debts that are not permitted debts; | ||
(vi) such other levies and charges on the specified debtor’s income as may be prescribed. | ||
(6) In calculating a debtor’s assets for the purposes of subsection (2)(c)— | ||
(a) the value of an asset shall be taken to be its market value, irrespective of any mortgage, charge or other security to which it is subject, | ||
(b) the items which shall be taken into account include— | ||
(i) savings; | ||
(ii) subject to paragraph (c)(iii), vehicles; | ||
(iii) shares; | ||
(iv) property (real and personal), | ||
(c) the following shall not be taken into account: | ||
(i) the following items, to a total value that does not exceed €6,000— | ||
(I) household equipment and appliances that are reasonably necessary to maintain a reasonable standard of living for the debtor and his or her dependants, and | ||
(II) books, tools and other items of equipment used by him or her that are reasonably necessary in his or her employment, business or vocation; | ||
(ii) one item of personal jewellery to a value not exceeding €750 or such other value as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a); | ||
(iii) one motor vehicle, where that motor vehicle is reasonably necessary in order for him or her to carry out his or her everyday activities and— | ||
(I) is worth €2,000 or less, or is worth such other amount as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a), or | ||
(II) where the debtor, or his or her dependant, has a disability, has been specially designed or adapted for use by the debtor or that dependant, as the case may be; | ||
(iv) where the debtor or his or her dependant is attending a course of primary or second-level education, books, materials and other items of equipment that are reasonably necessary to enable the debtor or that dependant, as the case may be, to participate in and complete that course, | ||
(v) any interest in or entitlement under a relevant pension arrangement unless subsection (12) applies. | ||
(7) The factors to be taken into account for the purposes of subsection (2)(e) are— | ||
(a) the current liabilities of the debtor, | ||
(b) the contingent and prospective liabilities of the debtor and (insofar as is ascertainable) the times at which such liabilities will become due for payment, | ||
(c) the current and prospective assets and income of the debtor, and | ||
(d) guidelines issued under section 23 . | ||
(8) A debtor is ineligible for the issue of a Debt Relief Notice where— | ||
(a) he or she has ever been a specified debtor, | ||
(b) he or she has applied for a protective certificate under Chapter 3 or 4 within the period of 12 months ending on the application date, | ||
(c) he or she, as a debtor, is, as of the application date, a party to a Debt Settlement Arrangement or a Personal Insolvency Arrangement which is in effect, | ||
(d) he or she, as a debtor, has successfully completed a Debt Settlement Arrangement or a Personal Insolvency Arrangement within the period of 5 years ending on the application date, | ||
(e) subject to subsection (9), he or she has applied for bankruptcy and the petition concerned has not been adjudicated before the application date, | ||
(f) subject to subsection (10), a creditor has, before the application date, petitioned to make the debtor bankrupt but the hearing concerned has not yet taken place, | ||
(g) he or she has, before the application date, been adjudicated bankrupt and the adjudication has not been annulled or discharged, | ||
(h) he or she is, as of the application date, a discharged bankrupt subject to a bankruptcy payment order, | ||
(i) he or she is, as a debtor, subject, as of the application date, to an arrangement under the control of the court under Part IV of the Bankruptcy Act 1988 , or | ||
(j) he or she has been discharged from bankruptcy within the period of 5 years ending on the application date. | ||
(9) Subsection (8)(e) shall not apply where the petition concerned— | ||
(a) has not been presented before the date on which the application for the Debt Relief Notice is determined under section 31 , | ||
(b) has been so presented, but proceedings on the petition have been finally disposed of before that date, or | ||
(c) has been so presented and proceedings in relation to the petition remain before the High Court at that date, but the Court has referred the person for the purposes of making an application for a Debt Settlement Arrangement or Personal Insolvency Arrangement. | ||
(10) Subsection (8)(f) shall not apply where the petition concerned— | ||
(a) has not been presented against the person before the application date, | ||
(b) has been so presented, but proceedings on the petition have been finally disposed of before that date, or | ||
(c) has been so presented and proceedings in relation to the petition remain before the Court at that date, but the making of an application for a Debt Relief Notice has been consented to by the creditor or the person who presented the petition on the creditor’s behalf. | ||
(11) In determining what constitutes reasonable living expenses or a reasonable standard of living for the purposes of this section, regard shall be had to guidelines issued under section 23 . | ||
(12) Where this subsection applies and a debtor has an interest in or entitlement under a relevant pension arrangement which would, if the debtor performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement— | ||
(a) an income, or | ||
(b) an amount of money other than income, | ||
in accordance with the relevant provisions of the Taxes Consolidation Act 1997 , that debtor shall be considered as being in receipt of such income or amount of money. | ||
(13) Subsection (12) applies where the debtor— | ||
(a) is entitled at the date of the making of the application for a Debt Relief Notice, | ||
(b) was entitled at any time before the date of the making of the application for a Debt Relief Notice, or | ||
(c) will become entitled within 6 months of the date of the making of the application for a Debt Relief Notice, | ||
to perform the act or exercise the option referred to in subsection (12). |