Under the Personal Insolvency Act, 2012, Philip has unsustainable debt of €250,000 secured against his private home. He is entitled to apply for which arrangement(s)?

• A. (i) Debt Relief Notice.
• B. (ii) Debt Settlement Arrangement.
• C. (iii) Personal Insolvency Arrangement.
• D. None of the above.

Answer: (B)

The key idea here is choosing the option that best fits a borrower with substantial debt while the home remains secured. A Debt Settlement Arrangement is designed to deal with unsecured debts by obtaining a binding agreement from creditors to repay a reduced portion of what is owed over a fixed period, while the debtor continues to meet essential living costs and maintains payment on secured obligations like a mortgage separately. It provides a structured, legally binding plan that can relieve the burden of large unsecured liabilities without forcing sale of the home. The arrangement is typically set up by a Personal Insolvency Practitioner, and it must be approved by a majority of unsecured creditors; once approved, it binds those creditors to the agreed terms.

Debt Relief Notices are for much smaller, mostly unsecured debts and do not address secured housing loans, so they’re not appropriate when a home is at stake. Personal Insolvency Arrangements are more comprehensive and can involve restructuring secured debt, which is a broader remedy than needed here if the focus is on stabilizing the unsecured portion via a settlement. Therefore, a Debt Settlement Arrangement is the most suitable route given the scenario.