The Central Bank has announced a pilot scheme for the restructuring of secured and unsecured distressed consumer debt across multiple lenders. The scheme aims to prevent borrowers entering the insolvency process by agreeing debt solutions with various lenders.

The scheme will not apply to business debt, debt involving buy-to-let properties or debts where the borrower is deemed to be “non-co-operating” under the Code of Conduct on Mortgage Arrears.

Neither a launch date for the scheme nor a formal list of participating lenders has been announced. However, the Irish League of Credit Unions has rejected the scheme citing that it does not offer real relief for borrowers. It is difficult to see how the scheme will sucessfully operate in practice without broad support from all lenders.