The Debt Relief Notice: Its Effectiveness in Improving the Financial Well-Being of Over-Indebted Individuals and Its Impact on Social Mobility

Abstract

Ireland’s policy approach to personal insolvency went through sudden changes in 2012 after a lengthy period of stability. This article presents the findings of a study examining one of the remedies introduced with the Personal Insolvency Act 2012 (as amended), the Debt Relief Notice (DRN). The study examined the DRN’s effectiveness in addressing the financial well-being of over-indebted individuals. The results revealed a reduction in participants’ financial distress after obtaining a DRN, which in turn enabled increased control over day-to-day finances. Improved health, increased resourcefulness, and lifestyle improvements were also identified when the participants’ financial distress was reduced. However, participants were incapable of attaining long-term financial resilience, and, therefore, were unable to achieve high financial well-being. A negative impact on social mobility was also identified as an outcome. The short-term impact identified is similar to findings of earlier research (Stamp, 2012) examining Ireland’s previous policy approach to personal insolvency.