Minister for Finance Michael Noonan has defended the new Insolvency Service of Ireland (ISI)'s public register which will identify everyone who uses it and insisted a proper infrastructure was in place to handle more than 1,000 anticipated applications every month.
The ISI started accepting debt applications yesterday and the Minister accepted that publicity around the register may deter some indebted people from using it.
“It might, but obviously it is not for everybody. Some people will try to make direct arrangements with people they owe money to,” Mr Noonan said.
“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.
More than 15,000 people are likely to use the service in the first year but take-up on day one was slow.
The ISI said it had received just over 100 calls yesterday while 3,000 people had accessed its website and about 30 emails had been submitted to the agency. A spokeswoman had no information on actual applications and said the volume would depend on the readiness of debtors to submit their details to the new service
The Money Advice and Budgeting Service (Mabs) said it had seen an increase in the numbers making enquiries about insolvency arrangements yesterday but said few, if any, people were ready to make actual applications.
"I think a lot of people will hold back unless there is huge pressure on them," Mabs spokesman Michael Culloty said . "The process is in its infancy and people are going to be wary and won't want to be guinea pigs.
“What I do anticipate is that people will start looking seriously at the ISI and start applying it to their own circumstances.”
There are fewer than 40 people qualified to act as a Personal Insolvency Practitioner (PIP) but Mr Noonan denied the deficit would be a problem.
He claimed it would “take time” for the ISI to be fully operational. “It’s like any start-up, it starts with enough 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 Free Legal Advice Centre (Flac) welcomed the commencement of potential debt-rescheduling arrangements but expressed concern about how the new system would work. It said the potential for up-front fees to be charged by Pips and the lack of access to a system of publicly funded practitioners for those who cannot afford such fees were among its concerns. It also said the lack of any appeals mechanism for debtors whose proposals are rejected and the length of repayment arrangements were also worrying.
"Flac has consistently stressed that all insolvent debtors need independent support in dealing with their debts right through the process and it is still unclear that this will be available" said Flac's director general Noeline Blackwell.