A look at corporate, personal and, where relevant, partnership insolvency proceedings in Ireland, with a brief description to explain key features, as part of our Dictionary of Insolvency Terms in EU Member States. In particular, we highlight who controls the procedure and whether it is likely to be accompanied by a moratorium to prevent enforcement.

Scheme of arrangement

  • A Scheme of Arrangement is a flexible procedure which companies may use for restructuring debt or reorganising shareholdings. It can also be used outside of an insolvency context.
  • A Scheme of Arrangement allows a company and its creditors and/or members to enter into an agreement to financially restructure the business.
  • An arrangement is proposed and must be approved by a special majority (ie a majority in number representing at least 75% in value of the creditors or members present and voting). A notice that the resolution has been passed and an application is being made to the High Court must be advertised. The Scheme of Arrangement will not be binding unless it is sanctioned by the Court.
  • Once a scheme is approved, the company’s debts are treated in the manner provided by the scheme proposals.
  • The company continues to trade throughout the process and its directors remain in control.

Creditors’ Voluntary Liquidation (CVL)

  • Also called a Creditors’ Voluntary Winding Up, this is a terminal process usually commenced by the directors.
  • The company must hold a shareholders’ meeting followed by a creditors’ meeting. The shareholders resolve to place the company into CVL as it cannot continue to trade as a result of its liabilities. At the creditors’ meeting the directors present a statement of the company’s affairs together with a list of creditors and the amounts owed.
  • The shareholders’ meeting and creditors’ meeting may both nominate a liquidator. If the nominations differ, the creditors’ nominee prevails.
  • The liquidator proceeds to realise the assets of the company and distribute the proceeds to the creditors. After distribution, the company is dissolved.
  • Once a resolution for voluntary winding up has been passed, a party wishing to issue or continue proceedings must obtain leave of the court.

Compulsory liquidation

  • This is a terminal process commenced by a petition to the court, usually by a creditor following non-payment of a debt. A petition can also be presented by the company itself, or by a contingent/prospective creditor.
  • A liquidator is appointed to realise the assets of the company and distribute proceeds to creditors. After distribution, the company is dissolved.
  • In cases of sufficient urgency, the court can appoint a provisional liquidator.
  • The presentation of a petition does not operate as an automatic stay on proceedings and does not prevent secured creditors from enforcing their security. However once the winding up order is made or a liquidator appointed, leave of the court is required to bring any action or proceeding. While the petition is pending, the company or a creditor can apply to court for a stay on proceedings or for an order restraining further proceedings.


  • This is the main rescue procedure for companies in Ireland. It is commenced when the company, its directors, creditors, or members (holding at least 10% of the paid-up share capital carrying voting rights) petition the court to appoint an Examiner.
  • Examinership is only available where a company is (or is likely to be) unable to pay its debts, and there is no resolution or order for winding up. The court must be satisfied that there is a reasonable prospect of the company’s survival as a going concern.
  • The Examiner examines the state of the company’s affairs and formulates proposals for a compromise or scheme of arrangement for the company’s survival (if the Examiner thinks the company has a viable future).
  • The company’s directors remain in control of the day-to-day running of the business (subject to the Examiner’s right to apply to the court to vest all or any of the directors’ powers exclusively in the Examiner).
  • Court protection is given for 70 days (which can be extended to 100 days in certain circumstances) to prevent the company from being wound up or its assets being seized by the creditors. In response to the COVID-19 pandemic, the Government has introduced a temporary measure to allow for a further extension of 50 days (making the process 150 days in total) if there are exceptional circumstances. No proceedings may be commenced in relation to the company without leave of the court and secured creditors cannot take any action to enforce their security.
  • The Examiner’s scheme is put to the company’s creditors and will be deemed approved by the members/creditors if a simple majority (in number and value) of one class of creditors/members votes in favour of it. (Interim measures have also been introduced on the convening, conduct and notices of these meetings in light of the pandemic.)
  • The scheme must then be confirmed by the court. It then becomes binding on all creditors. If the court rejects the Examiner’s proposals, it may order the company to be placed into liquidation.

Personal Insolvency Arrangement (PIA)

  • This is a formal agreement between a debtor (acting through a personal insolvency practitioner) and their creditors to settle and/or restructure secured debt up to a total value of EUR3 million (unless all secured creditors agree to raise the limit) and unlimited unsecured debt. A PIA is usually put in place for a period of six years.
  • It is a voluntary arrangement and requires the support of at least 65% in value of creditors (which must be made up of creditors representing more than 50% of the secured debt and creditors representing more than 50% of the unsecured debt participating and voting at the meeting).
  • A debtor is not eligible where 25% or more of the debt was accrued within the six months prior to the application.
  • If a secured creditor rejects the PIA, the court is authorised to review the arrangement.
  • After an agreed period, the debtor will be discharged from unsecured debts covered by the PIA, but secured debt will only be discharged to the extent agreed in the PIA.
  • A debtor can only avail of a PIA once in their lifetime.

Debt Relief Notice (DRN)

  • This is an insolvency resolution mechanism for low income debtors with few assets and little capacity to repay. It is an agreement which allows for unsecured (and in some cases secured) debts up to EUR35,000 to be written off in full after a three-year supervision period.
  • A debtor can only avail of a DRN once in their lifetime.
  • Subject to an improvement in personal circumstances, creditors cannot pursue the debtor for payment during the three year supervision period. An application for a DRN is made by the debtor via an Approved Intermediary under the Insolvency Service of Ireland.
  • There are conditions on what debts can be included in a DRN.
  • A debtor can exit the process at any time by paying 50% of the total amount owed (and the remainder of the debt is then written off).

Debt Settlement Arrangement (DSA)

  • This is an agreed settlement that allows for the write-off of unsecured debt only, usually over a period of five years. There is no limit on the total amount of debt that can be covered.
  • It is not available to debtors who have completed a PIA or bankruptcy in the previous five years, or a DRN in the previous three years. A DSA proposal must be made through a Personal Insolvency Practitioner.
  • A debtor is not eligible where 25% or more of the debt was accrued within the six months prior to the application.
  • Support from creditors comprising at least 65% of the total debt is required.
  • After the period of the agreement, the debtor will be discharged from their debts.


  • This is a formal High Court process where a debtor can petition the court for a Bankruptcy Order if the debtor is insolvent and their liabilities exceed the value of their assets by EUR10,000 for a single creditor or EUR20,000 or more in aggregate (although as an interim measure during COVID-19 this has been raised to EUR50,000). It can apply to both secured and unsecured debt. A creditor can petition the court where the debtor has committed an act of bankruptcy in the previous three months.
  • The debtor’s property and possessions transfer to the Official Assignee in Bankruptcy and are then distributed to creditors in accordance with the order of priorities. The debtor’s name is entered into the Bankruptcy Register.
  • The debtor is automatically discharged from bankruptcy within one year. However, they can be liable to make payments to the Official Assignee for three years after the making of the bankruptcy order.
  • On application from the Official Assignee, the presentation of a petition for bankruptcy will result in a stay on all outstanding enforcement proceedings. A Bankruptcy Order, once made, means that no creditor can take action against the bankrupt person without the leave of the court.
  • Secured creditors can realise their security separately from the bankruptcy, and if there is a shortfall (or an unsecured portion), they can apply to have this dealt with in the bankruptcy process.


  • A Receiver is appointed either by a debenture holder (if the ability to appoint is contained in the debenture) or by the court (on the application of the debenture holder).
  • The Receiver will take control and seek to realise the assets of the company on behalf of the debenture holder to pay off the principal and interest due to the debenture holder.
  • A Receiver can be appointed over the entire undertaking of a company to manage its affairs and carry on its business for as long as is necessary. The Receiver can dispose of any asset (or the entire undertaking) if they consider that the interests of the debenture holder requires it. The Receiver must exercise all reasonable care to obtain the best price reasonably obtainable at the time of sale.
  • Once a Receiver is appointed, any floating charges crystallise and become fixed charges and the powers of the company and its directors are suspended in relation to the assets covered by the receivership.

EU Directive Implementation

The EU Directive on Restructuring and Insolvency1 requires Member States to incorporate minimum common standards into their national restructuring and insolvency laws by 17 July 2021, with an option to extend that deadline by one year. The intention of the Directive is to reduce barriers to the free flow of capital stemming from differences in Member States’ restructuring and insolvency frameworks, and to enhance the rescue culture in the EU.

Notable features required to be included in Member States’ national laws include:

  • An effective preventive restructuring framework to enable debtors experiencing financial difficulties to restructure at an early stage, with a view to preventing insolvency and ensuring their viability.
  • A stay of up to four months extendable to up to 12 months to support negotiations of a restructuring proposal, which should prevent individual enforcement action and include rules preventing the withholding of performance, termination, acceleration or modification of essential contracts.
  • An ability to cram down dissenting classes of creditors.
  • Adequate protection for financing needed to allow the business to survive or to preserve the value of the business pending a restructuring, and for new financing necessary to implement a restructuring plan.
  • Provision for honest, insolvent entrepreneurs to have access to a procedure that can lead to a full discharge of their debts (subject to limited exceptions) within three years.

Implementation in Ireland

In Ireland a public consultation was held between January and March 2021 on the use of Member State options, with views being sought on the current provisions of examinership and any amendments that may be required under the Directive. The responses to the Consultation have not yet been published. The next step will be for a General Scheme to be published, followed by a Bill, which will need to be reviewed and passed by the Oireachtas (the Irish Parliament).

Implementation date

The implementation date is currently unknown.

Recognition of foreign insolvency processes

EU Regulation on Insolvency Proceedings

The EU Regulation on Insolvency Proceedings2 applies to all EU Member States except Denmark and requires that certain collective insolvency proceedings, which are listed in Annex A to the Regulation, occurring in one EU Member State are automatically recognised in all other EU Member States and that each EU Member State automatically recognises the powers and authority of an insolvency practitioner appointed in another EU Member State.

Recognition of third country insolvency processes

For third country insolvencies, there is no automatic recognition of foreign proceedings. Ireland has not adopted the United Nations Commission on International Trade Law (UNCITRAL) model law on cross border insolvency. An application can be made under common law to the High Court to recognise foreign insolvency proceedings and provide orders.

Insolvency changes in response to COVID-19

For more information on changes to insolvency law in Ireland as a result of the COVID-19 pandemic please see our Guide to changes in insolvency law in response to COVID-19.

Contact: Caoimhe Clarkin and Louise McErlean.

1 Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132.
2 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast).