What is a Debt Settlement Arrangement?
A Debt Settlement Arrangement (DSA) is an insolvency solution for people who have unsecured debts – credit cards, loans, overdrafts etc. For mortgage-related debt please see Personal Insolvency Arrangement.
A Debt Settlement Arrangement is a formal agreement with creditors that allows for some write off of debt. With this solution a person agrees to pay a percentage of their overall debt over a specified period of time. At the end of that period of time they will be solvent.
A DSA can last for 5 years – but can be shorter e.g. if a lump sum is available. Any outstanding debts you owe after this time will be written-off.
A DSA allows you to pay off as much unsecured debt as possible.
You are protected while your DSA is in place – creditors such as banks cannot take any legal actions against you.
You can only have one DSA in your lifetime.
Applying for a Debt Settlement Arrangement
In order to apply for a Debt Settlement Arrangement, a person should contact a Personal Insolvency Practitioner (PIP) – these are a network of qualified professional advisors regulated by the ISI to deal with Debt Settlement Arrangements and are experts in the area of debt advice.