Updated 08.30

Debt relief campaigners are hailing a "new day" for Irish borrowers, after the first deal under the personal insolvency act was announced last night.

The deal was given to a Donegal HSE worker who was a partner in a failed business.

It will see 70% of his debt written off, and it is understood that three of Ireland's main banks were among the six creditors involved.

Founder of the New Beginning lobby group Vincent P Martin says it is a huge moment for ordinary borrowers:

Co-founder Ross Maguire, told Newstalk's Breakfast personal insolvency is not the panacea that people might thing, but it will help people get back to solvency: 

New Beginning says they are encountering difference attitudes at different banks, adding that it is the Irish institutions that are proving most difficult.

However, the group points to the introduction of new rules on bankruptcy next week, predicting those changes will transform the situation for endebted people.

Meanwhile, it has emerged that in order to access Personal Insolvency, families are voluntarily surrendering their homes.

The first 20 insolvency cases processed by accountants Grant Thornton show that one in four distressed borrowers agreed to give up their homes as part of their personal insolvency agreement.

The cases handled by Grant Thornton show that most of those struggling with debt are still in employment.