Exploding myths around the Personal Insolvency Act 2012
There has been an avalanche of publicity around the Personal Insolvency Act 2012 and the opportunity it affords insolvent individuals to get back to a solvent state through the use of the various arrangements contained in it. The mission behind the legislation is to restore people who are insolvent to solvency in a fair, transparent and equitable way.
The Insolvency Service of Ireland (ISI) is now accepting applications for the new debt arrangements since the 9th September, 2013.
There is no doubt that both individuals and practitioners in this area are slowly making their way through this process and there is still a lot to learn from everybody’s perspective.
However, the statistics from the Insolvency Service of Ireland tell their own story. These statistics as and of last Friday the 25th October last are as follows:
- The number of Personal Insolvency Practitioners in Ireland – 65
- The number of approved intermediaries – 14
- The number of telephone calls to the ISI up to the end of September – 4,788
- The number of emails to the ISI to the end of September 2013 – 1,630
- The number of visits to the ISI website – 85,497.
Most interestingly, the top downloads cover the guide to reasonable living expenses, the guide to the personal insolvency arrangement and personal insolvency practitioner information.
For the uninitiated, personal insolvency practitioners of whom there are now three in the offices of Pierse Fitzgibbon solicitors are people who will advise and take the debtor through the process of finally reaching an arrangement with their creditors.
The approved intermediaries are the various MABS offices throughout Ireland who will deal only with debt relief notices and these notices will cover unsecured debt to the value of €20,000.
It is not surprising that the top download is the guide to reasonable living expenses as the reality is that if somebody is considering availing of the processes under the Personal Insolvency Act, 2012 that person’s level of expenditure will be carefully scrutinised for the purpose of eliminating any unnecessary expense in order to reach an arrangement with that person’s creditors. You will have read articles about trophy homes and boarding school fees and whether these are reasonable expenses where the person is insolvent.
Another top download is the guide to the personal insolvency arrangement and as this covers both secured and unsecured debt, it is clear that many of the individuals availing of the procedures under the Act will be people with primary mortgages as they have on their family home together with other mortgages over perhaps second and third investment properties.
It is very important to understand that it is not possible to avail of the personal insolvency arrangement without initially having engaged with the banks in terms of dealing with mortgage arrears. Therefore, the advice at this point in time is that it is essential that where engagement with the bank has not already taken place to engage immediately so as to subsequently avail of the provisions under the Personal Insolvency Act 2012.
The attraction in terms of finally reaching agreement with creditors is that at the end of each of these processes, there is 100% discharge from unsecured debts in the Debt Settlement Arrangement (DSA) and there is also 100% discharge from unsecured debts in the Personal Insolvency Arrangement (PIA) and discharge from secured debts to the extent specified in the PIA.
The advice is to be organised and come with the necessary information to your personal insolvency practitioner before you can even consider application for the necessary arrangements.
Solutions are there but have to be worked towards.