First insolvency service practitioners authorised
Those in financial trouble can start insolvency process now
Indebted individuals can now contact a personal insolvency practitioner to start resolving their debt situations. Photograph: Frank Miller/THE IRISH TIMES
The Insolvency Service of Ireland (ISI) has authorised its first batch of personal insolvency practitioners (PIP), who will be responsible for leading people through the insolvency process.
“As of today, people who want to discuss their situation with a practitioner can go to the ones on the register,” a spokesman for the ISI said, adding that it expects to receive applications from those looking for one of the debt resolutoin options now available as early as next week.
According to the ISI, 14 individuals, representing ten firms, have been authorised to act as personal insolvency practitioners. These include Jim Stafford of corporate recovery specialist Friel Stafford, and Michael McAteer of Grant Thornton, who was involved in some of the larger corporate restructurings in recent years including Treasury Holdings and more recently The Sunday Business Post.
According to a spokesman for the ISI, about 100 applications were made, with further authorisations likely to be granted in the coming weeks.
Indebted individuals looking for the services of a PIP to develop either a debt settlement arrangement, or a personal insolvency arrangement, put it to their creditors and have it approved, can do so from today. However, those looking for a debt relief notice, which applies on debts up to €20,000, must wait for the first approved intermediaries (AI) to be authorised to begin the process. It is expected that the ISI will announce these later this week.
Stringent requirements apply to putative practitioners, who will typically have a formal qualification such as a financial advisor, accountant, barrister, or solicitor. Practitioners must also be tax compliant with adequate personal indemnity insurance.
An application fee of €1,500 applies, and authorisations must be renewed after 12 months for an additional fee of €1,000.
A number of courses, run by institutions such as The Law Society, Chartered Accountants of Ireland and the National College of Ireland, have been established to help train those looking to become practitioners.
For a full list of authorised practitioners see: www.isi.gov.ie
What debt solutions are on offer?
Those looking to avail of the new insolvency service have three options available to them:
1) A debt relief notice (DRN)
A DRN aims to give relief from debt to people who are in debt and have little or no disposable income or assets which they could use to repay what they owe. The qualifying debts they owe cannot exceed €20,000, and the process enables insolvent debtors to write off their debts provided that they are unable to pay for them. A DRN requires the services of an approved intermediary but these professionals have not yet been authorised by the ISI. It is expected that authorisations will be granted later this week.
2) A debt settlement arrangement (DSA)
A DSA only includes unsecured debts without a limit on the amount of debt. However, certain unsecured debts cannot be included and certain other unsecured debts require the consent of the creditor prior to being included. A DSA must be agreed by the debtor and approved at a creditor’s meeting by 65 per cent of creditors (in value).
3) A personal insolvency arrangement (PIA)
A limit of €3 million applies to a PIA, which allows someone to come to an arrangement for their unsecured debt - such as credit cards - over a period of up to six years (and seven in certain circumstances) . Secured debt, such as a mortgage is also eligible for inclusion in a PIA and can be restructured - potentially allowing for a write-down of a portion of negative equity for example .