The Debt Crisis
The bursting of the property bubble in 2007-08 in Ireland precipitated a debt crisis more severe than experienced anywhere else in the western world since the great depression of 1930-32 in the US. National output (GNP) declined by 25%, unemployment soared to 15% and emigration returned with approximately 250000 of our brightest and best people leaving the country since 2008. The Government policy of bailing out the bankrupt banks and maintaining Celtic Tiger levels of current spending, while the economy continues to stagnate has resulted in Government Debt rising to €200 Billion today and this, combined with the household and non-financial corporate debt built up during the boom, has left us the most indebted nation in the western world with a total public and private debt level amounting to 470% of GNP as compared with 270% in Greece.
At a personal level the consequences of the mismanagement of the Irish economy both prior to and subsequent to the bust, has been a severe reduction in earning capacity, a destruction in the value of share and property investments and private pension funds and an understanding of the word insolvency, which has come to be the lot of so many Irish people who had hoped to better themselves through borrowing for their homes, businesses and investment properties. These people were left in a terrifying limbo, where the value of their properties and investments declined while the outstanding loan balance continued to rise and became unsustainable. They could not walk away from their properties, businesses and loans because loans in Ireland are with recourse and any unpaid balance remains a personal liability of the debtor. Some chose to leave Ireland in the knowledge that they could never return and in the hope that their liabilities would not be pursued abroad. Most remained, hoping that they would get some lifeline somewhere to enable them to put their lives back together again.
The Personal Insolvency Act 2012 is the lifeline that will enable Irish people in financial difficulty get their lives back together again. There is a viable solution for everyone whose income is not sufficient to meet their reasonable living expenses and their contracted financial commitments. The solution may be a negotiated solution, a debt settlement arrangement (DSA) over 5-6 years, a personal insolvency arrangement (PIA) over 6-7 years or personal bankruptcy over 3 years. With a DSA or a PIA it should be possible for the insolvent person to hold onto their residence and their business.
PIPSolutions combines all of the disciplines and skills necessary to provide a comprehensive solution to debt and insolvency. We offer highly qualified accountancy, legal and mediation and insolvency personnel who can devise the best one stop solution which will allow persons in financial difficulty to put their lives back together again and to face the future with renewed hope and confidence.