PIAs are considered one of the most serious debt management processes a person can undertake besides bankruptcy, and it has one of the most stringent application procedure as well. Because of its serious nature, PIAs must contain what it called mandatory terms – that is binding terms and conditions that cannot be deviated from.
While there are many aspects of the PIA application and legal terms that only your PIP will fully understand, there are some important terms and conditions that you must understand to go forward with the PIA.
A PIA lasts for six years, but can be extended to seven under specific conditions that are written into the agreement
The difference between secured and unsecured must be clear cut
There must be separate consideration given to how the asset the loan is secured against (house or other possession) will be treated if it is sold
Do they get the full value of the amount they have loaned if the asset is sold? Will there be a clawback clause if you sell later and for a greater amount than is in the agreement?
If you stick to the agreement your remaining unsecured debt balances at the end of the PIA will be written off
You will still be responsible for the payment of excluded and excludable debts, including any State decreed fines
You will not have to sell anything that helps you earn money from being self-employed
You and your dependents (if any) will be entitled to a reasonable standard of living for the duration of the PIA.
You can stay in your home and will not be forced to sell it
There must be a plan in place in case you die or experience mental incapacity
Your financial circumstances will be reviewed at least once a year during the PIA, where you will complete a new Prescribed Financial Statement
The costs of the PIP must be clearly laid out and transparent
These mandatory terms and conditions are because the law understands for the PIA to work you must be able to trust that the agreement will help you in the long-term and not spring any nasty surprises on you. However, in order for the PIA to be successful there are a few duties and obligations that are expected of you in return and which you must agree with to go forward with the PIA:
You must act in good faith in all of your dealings relating to PIA
You must be honest about you assets, income and liabilities. You must not cover up anything that could have an impact on your PIA application
You must comply with any reasonable request from your PIP for more information, particularly when undergoing a regular financial review
If your circumstances charge you must tell your PIP, as it could have a bearing on whether you can make your repayments
You should not attempt to obtain credit for more than €650 without telling the lender you are under a PIA
Only your PIP can transfer, gift, lease, dispose of or grant security against your property or assets. You cannot do so for the duration of the PIA
You must tell your Pip if you know of anything incorrect or missing from your PIA application
You must not pay any of your creditors separately of the PIA when the debts are included in it – it could break your PIA and cause it fail, making you liable to action from them and other creditors. Only debts that are not included in your PIA can be paid.
At first glance all these terms and conditions may seem like overkill, but it is important that you understand what they mean and what is involved in sticking to them. They are there to support and protect you, and help you on the path to a secure, debt-free future.
For more information about your duties and obligations under a PIA, call and speak to one of our PIA advisers now on 0800 193 1024.
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Once in a PIA arrangement you make one affordable monthly repayment towards your debt. After the 72 month period any remaining debt is written off!