Insolvency regime tackles €3.75bn debt to protect homes

The Insolvency Service of Ireland (ISI), which oversees the country’s new debt resolution procedures for the thousands of households still facing debt, said its latest figures show that the new regime has so far helped people struggling with an aggregate of €3.75bn in debt.

Insolvency regime tackles €3.75bn debt to protect homes

The Insolvency Service of Ireland (ISI), which oversees the country’s new debt resolution procedures for the thousands of households still facing debt, said its latest figures show that the new regime has so far helped people struggling with an aggregate of €3.75bn in debt.

The latest report covers the three months to the end of September and shows that there is a “continuing take-up of the newly introduced alternative solutions to bankruptcy” which is helping keeping people in their family homes, the ISI said.

It said the report does not include the recently announced changes that will increase the threshold for low income debtors to strike debt deals with their lenders for debts of up to €35,000 to be completely written off.

There were almost 500 new applications in the quarter for a range of notices: Debt relief notices (DRN), debt settlement arrangements (DSA), and personal insolvency arrangements (PIA).

There were 62 new applications for DRNs, which are designed for people on little or no income owning very few assets and facing unsecured debt.

Eighty seven applications were received for DSAs, and 309 people applied for PIAs, which deal with both unsecured and secured debt such as mortgage home loans.

The service said that 295 protective notices involved PIAs and that creditors agreed to 80% of the arrangements.

That means that the ISI has, to date, received 2,975 applications, overseen the issue of 1,692 protective certificates, and dealt with 1,463 approved arrangements and 785 bankruptcies since the bankruptcy period was significantly lowered to three years from up to 12 years.

It also said that it has dealt with cases involving €3.75bn in debt, with a 77% success rate across the cases.

There was a mixed reaction to the statistics from debt advocate groups.

Ross Maguire of New Beginning said that the report showed that the insolvency regime is keeping people in their homes.

“We would encourage more and more people to avail of the system,” he said.

However, David Hall, chief executive at the Irish Mortgage Holders Organisation, said the regime is having little effect in solving the debt stress faced by many households.

“From an initial expectation of thousands of cases the output from the ISI is anaemic and the schemes of arrangement have failed,” he said.

“The Insolvency Service is not fit for purpose and is not serving the thousands of citizens who are at risk of losing their family home and face homelessness.”

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