Insolvency bill will not see big number of bankruptcies

The Personal Insolvency Bill will not lead to a large number of bankruptcies, according to international ratings agency Fitch.

Fitch has talked to Irish banks on the impact the legislation will have on their mortgage portfolios and the agency believes the insolvency bill will not be a short cut allowing people in negative equity and arrears to walk away from their debts.

“Personal insolvency arrangements would not be an appropriate solution until existing forbearance measures which banks currently employ are exhausted. For this reason and also due to the ability for banks to vote against proposed personal insolvency arrangements if they view them to be an inappropriate solution, Fitch does not expect a wide-scale take-up of personal insolvency arrangements for delinquent borrowers,” the rating agency said.