Category Archives: Personal Insolvency

Insolvency Service – Some Statistics

How Many People are Using the Insolvency service of Ireland?

The ISI began accepting applications from the public back in Sept 2013 – but the numbers of debt solutions approved so far seem very small.

Figures as at  31 March 2014

Only 55 Debt Solution Arrangements have been approved – made up of 44 Debt Relief Notices, 7 Debt Settlement Arrangements and 4 Personal Insolvency Arrangements.

There were  523 cases in progress – (320 PIAs, 121 DSAs and 82 DRNs).
The total debt involved in these cases  is approximately €193 million.

Just  70 Protective Certificates were  issued by the Courts. (Protective Certificates give protection to debtors against legal action by creditors for a period and allows a Personal Insolvency Practitioner 70 days in which to develop an arrangement).

There were  66 bankruptcies in the first Quarter of 2014. (Total of 76 since the rules were changed_

The ISI say they have received almost 11,000 telephone calls to its information line and 2,500 email enquiries.

 

Authorised Personal Insolvency Practitioners

The first batch of Personal Insolvency Practitioners (PIPs) have been approved by the Insolvency Service of Ireland (ISI).
Anyone who intends to apply for  a Debt Settlement Arrangement or  a Personal InsolvencyArrangement will have to apply through one of these authorised PIPs .

There are currently just nine on the list of approved PIPs – with 4 of them in Tipperary. Apparently about  100 individuals have applied for approval to become PIPs.

The ISI is preparing for thousands of applications for debt relief, with estimated government figures suggesting that there will be 15,000 applications for debt settlement arrangements (DSAs) and personal insolvency arrangements (PIAs) in the first year of the new insolvency regime. About 3,000 to 4,000 applications for debt relief notices (DRNs) are also expected.

Approved PIPs Aug 12th 2013


County
Name Address Telephone
Co
Clare
Mr.
John Hogan
4 Abbey Street
, Ennis
065
682 4894
Dublin 2 Mr Jim Stafford 44 Fitzwilliam
Place
01 661 4066
Dublin 2 Mr Michael
McAteer
24-26 City
Quay
01 6805 805
Dublin
2
Mr.
Alan Geraghty
44
Fitzwilliam Place

01
661 4066
Dublin 2 Mr Tom Murray 44 Fitzwilliam
Place
01 661 4066
Co Limerick Mr Robert
Gloster
2 Cecil Street
, Limerick
086 804 5655
Co
Louth
Mr.
John Donnan
Mill
House Mill Street

Dundalk

042
932 6400
Co Meath Ms Tara Cheevers The Steeple
Buildings

High Street , Trim

046 943 8461
Co
Meath
Mr.
Barry Forrest
3C
Dunshaughlin Business Centre

Dunshaughlin

01
802 4217
Co
Tipperary
Ms
Marie Lane
Unit
6 Crann Ard

Fethard Road , Clonmel

052
618 4496
Co Tipperary Ms Frances
O’Hanlon
Unit 6 Crann
Ard

Fethard Road , Clonmel

052 618 4496
Co Tipperary Mr John Lynch Jervis House

Parnell Street , Clonmel

052 612 4344
Co Tipperary Mr John O’Connor Unit 6 Crann
Ard

Fethard Road, Clonmel

052 618 4496
Co Waterford Mr Mitchell
O’Brien
Garraunfadda

Dungarvan

Co Waterford

058 23511

Irish Insolvency Service Soon Open for Business

This week the the director of The  Insolvency Service of Ireland (ISI) ,  Lorcan O’Connor , updated the Oireachtas Joint Committee on Finance, Public Expenditure and Reform on the latest ISI progress and  targets.

He told them that he expects the ISI to be in a position to accept applications from the public in mid-August, ( five months after the establishment of the service).

Applications to become   Personal Insolvency Practitioners (PIPs) and Approved Intermediaries (AIs)  are already being processed and they will be authorising some  by the end of July. People will then be able to meet authorised practitioners straight away.

The Insolvency Service’s  IT system is still not  fully operational.  By the  19th July  complete end-to-end testing of  IT systems is due to start  and will involve involving MABS, potential PIPs and the Courts Service.

There are still some provisions of the Personal Insolvency Act that have not being signed into Law .

The ISI  expect that the first Debt Relief Notices (DRN) will  not be issued until early September 2013 . It will be Septyember too before the first Protective Certificates will be issued ( These will cover people applying for a Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement (PIA).

Who Can become a Personal Insolvency Practitioner ?

With the new Irish Personal Insolvency regulations  – there will probably be plenty of people thinking of  making money out of sorting out other people’s debt problems.

Anyone who wants to apply for a Debt Settlement Arrangement or a Personal Insolvency Arrangement will have to apply through a PIP – Personal Insolvency Practitioner. These PIPS will be able to charge fees . The fees will be taken out of the payments made to creditors.

The Insolvency Service started  accepting applications to become a  PIP during June 2013. There will be an application fee of €1500 and a renewal fee of €1000 annually. You can make your  application  here

According to the Insolvency Service of Ireland – only the following types of people can make an application to carry on practice as a personal insolvency practitioner

A solicitor in respect of whom a practising certificate (within the meaning of the Solicitors Acts 1954 to 2011) is in force; or

A barrister at law called to the Bar of Ireland;

A qualified accountant and a member of a prescribed accountancy body (within the meaning of section 4 of the Companies (Auditing and Accounting) Act 2003; or

A qualified financial advisor who holds a current qualification from the Life Insurance Association of Ireland (LIA), the Insurance Institute or the Institute of Bankers School of Professional Finance; or

Anyone who holds a qualification in law, business, finance or other appropriate similar qualification to the satisfaction of the Insolvency Service recognised to at least level 7 of the National Qualifications Framework by Quality and Qualifications Ireland (or equivalent)

ALSO – the person must be able to  demonstrate to the satisfaction of the Insolvency Service that he or she has relevant knowledge and experience of and has completed a course of study and passed an examination on the law and practice generally as it applies in the State relating to the insolvency of individuals; and the Act

PLUS – Before someone  can become  a Personal Insolvency Practitioner, they must aslo satisfy the Insolvency Service that he or she:

a) has adequate organisational capability and resources to carry on the practise of a Personal Insolvency Practitioner

b) holds a policy of professional indemnity insurance.

c) is tax compliant.

 

Insolvency Service Guidelines For Reasonable Living Expenses

When working out the monthly amount of debt repayments that someone can afford  – there will be  guidelines on how to calculate disposable income after housing costs and expenses needed to maintain a reasonable standard of living .

The Insolvency Service of Ireland say that having these guidelines will “help safeguard a minimum standard of living so as to protect debtors while facilitating creditors in recovering all, or at least a portion, of the debts due to them.”

The ISI guidelines for a single adult allow for a monthly expenditure of  €900.08 (where no car is needed ) Or  €1029.83  if they need a car (eg in rural areas)
This does not include housing costs (Rent or Mortgage) . There is also allowance in the guidelines for a debtor to specify other reasonable costs which arise as a consequence of ill-health or disability.

These guidelines are saying that after tax,prsi etc – this is the amount a person should be left with to live on. If they can’t make debt repayments from the remaining income – then they are insolvent.

These are the breakdowns of the guideline expenses€1029.83 for a single Adult  – Monthly

Food  € 247.04
Clothing  € 35.73
Personal Care  € 33.40
Health € 31.09
Household Goods € 31.47
Household Services € 28.61
Communications €43.45
Social Inclusion & Participation € 125.97
Education € 24.50
Transport (Private) € 240.13
Household Electricity € 48.87
Home Heating € 57.31
Personal Costs € 0.79
Home Insurance € 12.22
Car Insurance € 25.91
Savings & Contingencies € 43.33

The figure for a 2 adult household with no children  and needing a car – is  €1431.58 a month
So the guidelines only only allow an extra €401.75 a month for a couple compared to a single person .

There are additional expenditure amounts for children – they are different depending on the age of the child . The figures range from € 372.49 a month for an infant , € 163.67 a month for pre-school , € 294.71 for primary school age and €497.32 a month for a child of secondary school age .

These guidelines will be used when applying for a Debt Settlement Arrangement  or a Personal Insolvency Arrangement. The legislation states that   the DSA or PIA   “shall not contain any terms which would require the debtor to make payments of such an amount that the debtor would not have sufficient income to maintain a reasonable standard of living for himself or herself and his or her dependants. ”   .
The Personal Insolvency Bill also states that   ” in determining whether a debtor would have a sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants, regard shall be had to these guidelines.”

For a Debt Relief Notice – to be eligible –  the debtor must have net disposable income, , of €60 or less a month. Disposable income is  income after tax/prsi/usc and deductions for reasonable living expenses and payments to cover debts that are excluded from this process)

For example – Take Home Pay €1500 a month
Single person’s reasonable  living expenses = 1029.83
Rent = €450 a month
Disposable Income =  1500 – 1029.83 – 450  =  20.87 a month
This is less than €60 – so they could apply for a Debt Relief Notice and possibly get up to €20k of debts written off

Target Dates for Insolvency Service Launch

Establishment of the Insolvency Service of Ireland (ISI)

The new Insolvency Service is urgently needed in Ireland to help sort out some of the people in mortgage arrears.

On March 13th the Department of Finance  announced some target dates for the Insolvency Service

They said that extensive work is taking place to get the new Insolvency Service of Ireland operational as early as possible in 2013 under its Director who was appointed in October 2012.

Applications from the public will not be accepted until June 2013

These are the milestones

Launch the Insolvency Service of Ireland website :  End-March 2013

Publish Guides to the three new arrangements :  End-March 2013

Put in place an information line for the public. :  End-March 2013

Publish Regulations for the authorisation and licensing of Personal Insolvency Practitioners :  End-March 2013

Publish Guidelines on a Reasonable Standard of Living and Reasonable Living Expenses for Debtors :  End-March 2013

Authorise and regulate approved intermediaries and personal insolvency practitioners :   Q2 2013

Commence taking applications from public :  June 2013

Note –  The targets have already been missed. The Insolvency Service of Ireland are now saying that they will not be launching the site until mid April

Debt Settlement Arrangements

Debt Settlement Arrangement (DSA)  is something we might  be hearing a lot more about in Ireland soon.  New Irish  Insolvency laws are being introduced in 2013 to try and  help people sort out debt problems without resorting to legal action.
Debt Settlement Arrangements will allow  an agreement between you and your creditors (people you owe money to) to pay all or part of your debts off over a set period.

A DSA only applies to unsecured debts such as credit card, personal loans, overdrafts, retail, store catalogues, etc which amount to more than €20,000.
For debts below €20000 you need to look into a Debt Relief Notice .

The first stage is to find  a personal insolvency practitioner  (PIP) , who will examine your ircumstances, complete a financial statement of affairs and apply to the Insolvency Service for a Protective Certificate in respect of preparation of a DSA.
If granted –  the Protective Certificate would allow you a 30 days during which creditors may not take action against you.

The next step is for the personal insolvency practitioner to forward a DSA to your creditors for their agreement. The proposal would set out the amounts to be repaid by you  over a five year period and any special conditions.

If the repayment proposal is accepted by your creditors (by a vote of 65% in value of qualifying creditors), the Insolvency Service would provide formal registration of the Debt Settlement Arrangement

At the satisfactory conclusion of the DSA after 5 years, all of your  debts covered by it would be discharged in full.  You will not be able to apply for another DSA within a ten-year period.

A DSA will likely be subject to annual review by the PIP to reflect any changes in your fiinancial circumstances. It may be varied or terminated and you  could still be subject to an application for adjudication in bankruptcy on the ending, termination or failure of the DSA.

There are grounds for challenge by creditors to a  DSA proposal and there is a role for the courts on application to have a DSA annulled.

 

Personal Insolvency Jobs in Ireland

The upcoming implementation of the Personal Insolvency laws in Ireland is going to create new work for insolvency practitioners. Many financial firms will be trying to get in on the act (pardon the pun) and make some money out of other people’s debt problems.

Deloitte intends to act as a Personal Insolvency Practitioner and is  setting up a new team to provide this service. They recently advertised  a vacancy  for a Personal Insolvency Manage

They said that it was ”  a once-off opportunity to become involved, at a senior level, in a dynamic start up, entering a newly created market with huge growth potential.”

The  Principal Duties & Responsibilities would be :

·Playing a key role in the setting up of all aspects of Deloitte’s Personal Insolvency Department.

·Managing a team focused on negotiating, implementing & monitoring of Debt Settlement Arrangements and Personal Insolvency Arrangements.

·Playing a key role in the business development & marketing of the Personal Insolvency Department.

They are looking for people with significant skills & experience managing and implementing UK-based Individual Voluntary Arrangements (IVAs) .

There will probably be several other job openings for experienced insolvency practitioners in Ireland in the coming weeks and months.

 

Debt Relief Notice – How Will it Work ?

Under legislation due to come into force in Ireland in 2013 – A Debt Relief Notice  or DRN will  provide an alternative to bankruptcy  and will help you deal with certain types of debt if you :

  • do not own your home
  • have very  little spare income
  • have little chance of your financial situation improving

These notices  will be issued by a new body called the Insolvency Service and once you have one it means that :

  • your creditors (people you owe money to ) can’t take any action to recover their money.
  • you are not allowed to make any payments towards your debts
  • you will be discharged (freed) from your debts when the DRN ends –  after 3 years.

A DRN can be amended or cancelled if your financial situation improves.

To get a Debt Relief Notice  you must:
* owe less than €20,000
* have less than €60 a month spare income – after paying essential bills like rent or food
* have less than €400 worth of assets – (not including motor vehicles worth less than €1200)
* not have applied for a DRN in the last six years

An application for a Debt Relief Notice by a  debtor must be done through an  an approved intermediary . Details of approved intermediaries will be made public. MABS will be providing this service .

More information to follow when these DRNs are available on how to apply.