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"Dealing with Debt"

Launch of Public Information Campaign
 Insolvency Service of Ireland (ISI)

"Dealing with Debt"

  • Three new debt solutions available - ISI will help restore people who are insolvent to solvency in a fair, transparent and equitable way
  • Light at the end of the tunnel - hope for people and families who are in genuine distress and cannot pay their debts
  • Within three to six years people who are insolvent can become solvent again, without having to resort to bankruptcy
  • Information on the solutions, the Guide to a Reasonable Standard of Living and Reasonable Living Expenses, and Regulations for Practitioners available on the ISI website (www.isi.gov.ie)
  • A telephone information line is available for queries: 076 106 4200
  • Regulatory framework to be published shortly for the countrywide network of independent practitioners who will work with people in debt
  • People in debt and their creditors encouraged to reach agreement on deals where possible, before entering into an insolvency agreement

The Minister for Justice, Equality and Defence, Alan Shatter TD, today joined Mr. Lorcan O’Connor, Director of the Insolvency Service of Ireland to announce details of debt solutions available to those struggling with personal debt, as well as details of the Guide to a Reasonable Standard of Living and Reasonable Living Expenses, and information on Regulations for Practitioners.  The Insolvency Service will be in a position to begin accepting applications at the end of June this year.  The announcement was made at the launch of the Insolvency Service of Ireland (ISI) Public Information Campaign at Government Buildings.

Speaking today the Minister for Justice Equality and Defence, Alan Shatter TD, said "Behind all of the insolvency statistics, there are real people and real families in genuine distress.  They deserve to get a second chance and the opportunity to participate fully in society as they work their way to agreed solutions with their creditors.  The three new debt solutions available provide certainty for those crippled with unsustainable debt and will help restore people who are insolvent to solvency in a fair, transparent and equitable way."

The different debt solutions will depend on the amount of debt involved, individual circumstances, whether there is a mortgage, and whether the debt is secured or unsecured.  The Debt Relief Notice (DRN) is for debts up to €20,000; the Debt Settlement Arrangement (DSA) is for unsecured debts of no limit; and the Personal Insolvency Arrangement (PIA) is for unsecured and secured debt. An easy reference guide and scenarios are available on ISI website and will assist people in determining whether they qualify and which solution is most appropriate for their needs.

Director of the Insolvency Service of Ireland, Mr. Lorcan O’Connor added "Our objective is to help restore people who are insolvent to solvency in a fair, transparent and equitable way. We know that people are living in distress. We know the anxiety and the distress that money challenges like this can cause and how they impact on people’s lives.  For that reason, we have been focussed on making the new debt solutions available as quickly as possible.  The Service will accept application by the end of June."

Speaking about the Guide to a Reasonable Standard of Living and Reasonable Living Expenses, Mr. O’Connor explained that the guidelines are a modified version of the model developed in Ireland by the Vincentian Partnership for Social Justice, and were not designed for the micro-management of people’s expenditure or lifestyle by either the Insolvency Service or by creditors.

"A reasonable standard of living does not mean that a person should live at a luxury level" Mr. O’Connor said.  "But nor does it mean that people should be punished and live only at a subsistence level.  These guidelines are meant to be flexible.  They are a baseline for negotiations and discussions.  Our objective is to help people in genuine distress, and to allow them their dignity as they work their way out from under their financial burdens."

Mr Lorcan O’Connor also spoke about regulations for practitioners.  The ISI will put in place a countrywide network of Approved Intermediaries (AIs) and Personal Insolvency Practitioners (PIPs) who will work directly with people in debt.  It is likely that that these AIs and PIPs will be solicitors, barristers, accountants and qualified financial advisers.  Qualifying criteria will be rigorous and regulations will be published shortly on the authorization and supervision of these practitioners.

Mr. O’Connor urged insolvent debtors intending to apply for insolvency arrangements to continue to work with their creditors. He also urged creditors to address any operational challenges they may face in implementing the new solutions.  He finished by saying that it is in all of our interests – in the best interests of society and the economy – for the ISI to achieve its main objective, to restore people who are insolvent to solvency in a fair, transparent and equitable way.

18 April 2013

ENDS

 

For media queries please contact:
Judith Kieran, Ph:086-3687881
John Warren, Ph: 076 106 4248
Email: press@isi.gov.ie 

Notes for Editor
At today’s launch, the ISI outlined the key next steps over the coming months:

  • ISI will begin to authorise practitioners in May 2013.  Potential practitioners need to familiarise themselves with the legislation, begin the necessary work to ensure that they are in a position to apply for authorisation to practice, and liaise with creditors to understand their expectations around proposals.
  • ISI will continue to develop its IT system to process applications.
  • Six new specialist judges will be appointed.
  • ISI will  begin accepting applications for the new debt solutions at the end of June 2013.

Information for practitioners

Section 47 of the Personal Insolvency Act 2012 provides for the authorisation of approved intermediaries by the Insolvency Service of Ireland.

Section 161 of the Act provides that the Insolvency Service may make regulations for the purposes of the control and supervision of personal insolvency practitioners. 

Section 173 of the Act provides for the making of regulations in relation to such matters as bank accounts, accounting records and other financial matters of personal insolvency practitioners. 

The Insolvency Service is currently in the process of finalising Regulations governing the above matters.

In order to assist – while we are waiting to publish the Regulations – the following information explains the proposed regulatory requirements and will be available at www.isi.gov.ie for those considering making an application.

What is a personal insolvency practitioner?
A personal insolvency practitioner (practitioner) is a person authorised by the Insolvency Service of Ireland (Insolvency Service), under Part 5 of the Personal Insolvency Act 2012, to act as a personal insolvency practitioner.

What is an approved intermediary?
An approved intermediary is a person or class of persons authorised by the Insolvency Service of Ireland (Insolvency Service) to support a debtor to make an application for a Debt Relief Notice.

What qualifications are required to become a personal insolvency practitioner?
Applicants should note that the qualifying criteria for becoming a PIP will be based on a number of considerations including;

  • educational and professional qualifications;
  • the ability to demonstrate to the satisfaction of the Insolvency Service that the individual has relevant knowledge and experience and has completed a course of study - by passing an exam, in relation to the insolvency of individuals and knowledge of the Personal Insolvency Act, 2012.

It is envisaged that applicants who make an application to become a Personal Insolvency Practitioner will be solicitors, barristers, accountants, qualified financial advisors, and holders of relevant qualifications in law, business, finance or other appropriate qualifications. 

Prospective practitioners will also have to meet certain fitness and probity requirements, be in a position to demonstrate to the satisfaction of the Insolvency Service that they have adequate organisational capability and resources to carry on the practice as a practitioner, that they will hold professional indemnity insurance as well as being tax compliant.

Registers
Once authorised, all practitioners will appear on the Register of Personal Insolvency Practitioners or the Register of Approved Intermediaries, as applicable.  These registers are available publicly on our website at www.isi.gov.ie

How to apply to become a personal insolvency practitioner?
When an individual applies to become a practitioner they will be asked to complete an application form electronically. The application form must be supported by declarations in relation to professional indemnity insurance and taxation issues, amongst others.

Applicants must also show that they have satisfactorily completed a course and exam - from a relevant professional educational body – on personal insolvency and practice in the State.

Applicants must also meet certain fitness and probity standards, which will be laid out in the regulations.

How to apply to become an Approved Intermediary?

When an individual applies to become an approved intermediary they will be asked to complete an application form electronically, and provide certain information, including a statutory declaration.

Applicants must also show that they have satisfactorily completed a course and exam - from a relevant professional educational body – on personal insolvency and practice in the State.

Applicants must also meet certain fitness and probity standards, which will be laid out in the regulations.

Supervision

The aim of the supervision process is to protect the integrity of the role of the practitioner and to ensure that the service delivered is to a high standard, and in compliance with the legislation.

The Insolvency Service will monitor and supervise practitioners by way of review, on-site visits, ongoing regulation or such other means as may be specified.

The Insolvency Service may also carry out enquiries or appoint investigators under the Personal Insolvency Act 2012.  They may seek suspension, revocation of the authorisation of the practitioner or such other measures which may be necessary.

Summary of New Debt Arrangements in Ireland:

Arrangement Type of debt covered Value Duration  Can Only Apply through

Arrangement

Type of debt covered

Value

Duration

Can Only Apply through

 

Debt Relief Notice

Unsecured (and some secured in certain cases)

Up to €20,000

3 years

Approved Intermediary

Debt Settlement Arrangement

Unsecured

No limit 

5 years (+1)

Personal Insolvency Practitioner

Personal Insolvency Arrangement

Unsecured and secured

No limit on unsecured

Up to €3m secured (though cap can increase if agreed)

6 years (+1)

Personal Insolvency Practitioner


About Insolvency Service of Ireland (ISI):

The Personal Insolvency Act 2012 was signed into law on 26 December 2012. The Insolvency Service of Ireland (ISI) is an independent statutory body established under the aegis of the Department of Justice and Equality. The Insolvency Service of Ireland helps restore people who are insolvent to solvency in a fair, transparent and equitable way. The ISI was commenced by Ministerial Order on 1st of March, 2013.