The Insolvency Service of Ireland has begun taking applications today from people who want to restructure their debts.
Personal debt is a big problem in Ireland, with more than 100,000 people in some form of arrears with their loans.
The new insolvency regime is designed to help address this and offers three debt solutions.
Those with arrears up to €20,000 and with little or no disposable income can seek a debt relief notice, which will involve dealing with an intermediary such as the Money Advice and Budgeting Service.
Those with unsecured debts need to go to a personal insolvency practitioner (Pip) via a debt settlement arrangement.
Those with secured and unsecured debts up to €3 million can avail of a personal insolvency arrangement, again with the help of a Pip.
While creditors can veto agreements, Lorcan O’Connor director of the ISI writting in The Irish Times today said if a bank, for example, opts to vote down a reasonable proposal, the likely next step for the debtor is to declare bankruptcy
As of this morning there are 37 Pips covering 16 counties for the service. To find one, visit the ISI web site on www.isi.gov.ie
Speaking on RTÉ radio this morning, barrister Brian Walker who has trained Pips said the process would work for some people but warned that there are “a lot of boxes to tick.”
“ It will work for certain people, for people who qualify, but there’s quite a lot you need to do, you need to be up to date with your taxes to Revenue for example”
He said his main worry was that the banks would not engage with the process.
“There’s no great hope that they [the bank]will have open arms for the Pips… That’s my main worry. It will be challenging for Pips but that’s their job.”
Mr Walker said most people who have trained to become Pips are accountants. He said Pips will require €2,000 - €3,000 up front for the work involved.
Source: The Irish Times
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