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Debt settlement arrangement (DSA)

A debt settlement arrangement (or DSA) is a legally binding form of insolvency, giving you total protection from your lenders. Lenders included in a DSA are not allowed to contact you or take any action to collect the debt.

A DSA is available if you meet these conditions:

What happens in a DSA?

The DSA will normally last for five years, but in some cases it may be six years. Any unsecured debt left at the end of this will be written off.

The payments you make during the DSA will be set at a level you can afford. You’ll always be left with enough money to keep a reasonable standard of living.

A DSA only includes your unsecured debts, so you can keep paying your mortgage. Your house and car won’t be taken from you.

Setting up a DSA

You can’t set up a DSA on your own. You need the help of a personal insolvency practitioner (PIP). The Insolvency Service has a list of PIPs on their website.

First, the PIP will take the details of your debts, income and assets. They’ll then apply to the court for a certificate which stops your lenders taking any further action. From this point, your lenders are not allowed to contact you.

The PIP will then draw up a DSA proposal explaining your situation and what you can realistically afford to pay. They’ll send a copy of the proposal to your lenders, and if the majority of them agree to it, the DSA will go ahead. Your details will then be added to a public register.

The PIP may charge a consultation fee for their services. Once the DSA has been set up, any further fees will be taken from the payments you’re making and there are no extra charges.

After your DSA has been approved

Once the DSA is set up, you must stop paying anything directly to your lenders. You should only make payments to the DSA.

If your income or living costs change during the DSA, you must let your PIP know. If this affects the amount you can pay, they may change your DSA payments. Your PIP will contact you at least once a year to check if anything has changed.

If you apply for any credit of more than €650 during your DSA, you must tell the lender you’re borrowing from about your DSA.

Your credit rating will be affected during a DSA, and you’ll probably find it difficult to borrow more money. Your credit rating will improve over time if you don’t run up more debts.

If you don’t make the agreed payments to your DSA, it may be cancelled. Your lenders can then start to contact you directly again, and you’ll have to deal with them yourself.

At the end of your DSA, any remaining debt is written off and your name is removed from the public register of DSAs.

Find out more

If you want to know more, the Insolvency Service publishes a useful DSA guide (PDF).

If you need debt advice, call the MABS helpline now on 0761 07 2000. They’re open Monday to Friday from 9am to 8pm.

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