The Government has launched the new personal insolvency service, which will see new arrangements for overburdened borrowers to reach agreement with their creditors.

Details of reasonable expenditure guidelines have also been published by the Insolvency Service of Ireland.

The guidelines include indicators of the amount families will be allowed to live on once they enter into State-approved personal insolvency deals.

For a single adult, who is of working age and living alone, the guidelines suggest a monthly food allowance of €247.04.

It suggests that €48.87 per month should be allocated for electricity and €57.31 per month for home heating.

Individuals are advised to allow €136.26 per month for public transport, or €240.13 if a car is required, while €43.33 could be saved each month for future or emergency needs.

The guidelines also suggests €125.97 per month for ‘social inclusion and participation’.

This amount covers sports events or entertainment, while €43.45 is allocated to communications, including a €5 weekly phone credit allowance.

The director of the new service Lorcan O'Connor said the guidelines would "safeguard a minimum standard of living".

He added: "These guidelines are not to force people out of their jobs. It is to give them a second chance."

There had been recent concerns that the guidelines would force individuals to give up childcare.

However, the examples of people in insolvency arrangements given by the service show borrowers are allowed to continue to keep children in childcare.

Personal insolvency practitioners will be licensed in the coming weeks, who will negotiate deals between lenders and borrowers.

New applications for insolvency will be accepted by the end of June this year.

A website and phone number, 076-1064200, for debtors has also become operational.

Minister for Justice Alan Shatter and Mr O'Connor announced details of three different debt solutions available to those struggling with personal debt.

The different debt solutions will depend on the amount of debt involved, individual circumstances, whether there is a mortgage, and whether the debt is secured or unsecured.

The Debt Relief Notice (DRN) is for debts up to €20,000; the Debt Settlement Arrangement (DSA) is for unsecured debts of no limit; and the Personal Insolvency Arrangement (PIA) is for unsecured and secured debt.

Mr Shatter said: ''The three new debt solutions available provide certainty for those crippled with unsustainable debt."

He said that this: "will help restore people who are insolvent to solvency in a fair, transparent and equitable way.''

Mr O'Connor said the reasonable expenditure guidelines were not designed for the micro-management of people's expenditure or lifestyle by either the Insolvency Service or by creditors.

"A reasonable standard of living does not mean that a person should live at a luxury level", Mr O'Connor said.

"But nor does it mean that people should be punished and live only at a subsistence level."

He said the guidelines are meant to be flexible and that they are a baseline for negotiations and discussions.

He added: "Our objective is to help people in genuine distress, and to allow them their dignity as they work their way out from under their financial burdens."

Mr O'Connor urged insolvent debtors intending to apply for insolvency arrangements to continue to work with their creditors.

He also urged creditors to address any operational challenges they may face in implementing the new solutions.