Publicity aspect of new insolvency service may dissuade some - Noonan
37 personal insolvency practitioners available to help people restructure their debts
The Invsolvency Service of Ireland has begun taking applications today from people who want to restructure their debts.
The Minister for Finance has said that the publicity aspect of the new personal insolvency service may dissuade some applicants, but is still confident of its success.
Michael Noonan was responding to questions about the Insolvency Service of Ireland which has begun taking applications today from people who want to restructure their debts.
The development means that in some cases people will be able to get some of their borrowings written off if creditors agree to deals. However, people who avail of the service will have their names published on a register.
When asked about the publicity aspect associated with the registration of names, Mr Noonan agreed it may put some people off. “It might, but obviously it is not for everybody. Some people will try to make direct arrangements with people they owe money to. Some people will go for full bankruptcy but this is a way of keeping oneself going.
“If somebody is indebted and has a lot of creditors around the city for example, it’s no big secret so there isn’t a huge breach of confidentiality but it is in the interest of protecting the interests of everybody else in business — I hope it works and I think it will,” he said.
Asked about the number of personal insolvency practitioners in Limerick today, Mr Noonan said: “This is the start and it will take time until it gears up to be fully operational and while it is 37 practitioners today, I understand they are training more and there will be several hundred to deal with what is involved in the legislation.
“It’s like an start-up, it starts with enough of people to do a start up and then as it proceeds more people are trained. I understand the numbers are going to climb very quickly on the practitioners’ side.
The new insolvency regime is designed to help address this and offers three debt solutions. Personal debt is a big problem in Ireland, with more than 100,000 people in some form of arrears with their loans.
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 writing 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