The Government's proposals to tackle consumer debt will involve three distinct voluntary debt settlement arrangements and a three-year bankruptcy regime, RTÉ News has learned.
The three non-judicial proposals are part of a broader range of reforms to aid struggling borrowers.
The first measure will be a one-year Debt Relief Certificate, which will cover unsecured borrowings of up to €20,000. This would have to be approved by an insolvency service and an independent intermediary.
The second measure will be a Debt Settlement Arrangement lasting for five - and in some cases six - years. It would cover unsecured borrowing of over €20,000. Secured debts would be excluded.
The third measure would be a Personal Insolvency Arrangement which would cover secured and unsecured debts of over €20,000. This would last for six and sometimes seven years. This option would include mortgages.
The three options would all require agreement from banks and borrowers. They would require consumers to volunteer for the measures, and would not involve the courts.
The final option is bankruptcy, which would involve a three-year discharge period. People would be able to avail of it under certain conditions. Unlike the other options, it would involve a legal process.
It is understood the heads of a bill will be discussed at Cabinet tomorrow, and progress is expected, but ministers are unlikely to make a final decision this week.
