Personal Insolvency Arrangements to address mortgage debt rise 28%, report shows

Number of accounts in mortgage arrears 'remains stubbornly high', new report by the Insolvency Service of Ireland finds

There were 1,189 approved insolvency arrangements during 2024, of which 861 were Personal Insolvency Arrangements, which addresses mortgage-related debt. 

There was a 28% increase in the number of court approved Personal Insolvency Arrangements (PIAs) — the insolvency mechanism that address mortgage-related debt — during 2024, as the number of accounts in mortgage arrears “remains stubbornly high”, a new report by the Insolvency Service of Ireland has found.

The latest annual report from the ISI said there were 1,189 approved insolvency arrangements during 2024, of which 861 were PIAs — an increase from the 929 recorded in 2023, of which 671 were PIAs.

In the report, ISI director Michael McNaughton said the combination of increased living costs and higher interest rates “continues to put pressure on many households and individuals in meeting their mortgage payments as well as rental and utility bills”.

In managing these situations, and through no fault of their own, many people may find themselves burdened with an unsustainable level of debt.

Mr McNaughton said although the number of people in long-term arrears has fallen in recent years, “it remains stubbornly high at around 19,000 accounts”, adding that the Abhaile scheme “continues to serve as a crucial entry point into the insolvency framework”.

The Abhaile scheme provides a range of services to help people in mortgage arrears and offers free access to financial and legal advice by way of a voucher. The scheme issued 1,958 vouchers for a free Personal Insolvency Practitioner (PIP) consultation during the year.

The report said a representative sample from Abhaile data shows of those borrowers who have availed of a PIA, 100% had terms which saw them remain in their family home, while 28% of borrowers had a reduction in their mortgage debt through a write-down of the principal.

The report also showed court-approved Debt Relief Notices, a solution aimed at resolving unsecured debt, increased by 48% to 240 last year compared to the 162 recorded during 2023. A DRN is a solution for people with low income, no mortgage and very few assets that allows for the write-off of debts up to €35,000.

During 2024, there were 1,544 new insolvency applications made to the ISI, of which 1,165 were PIAs.

The ISI had 1,600 active estates under management in bankruptcy last year. Assets with a value of close to €6.4m were realised across 227 bankruptcy estates last year.

The number of people adjudicated bankrupt during 2024 stood at 71 — compared to 72 in 2023. The report also noted 75 people exited bankruptcy during the year.

There were 1,344 protective certificates (PC) issued during 2024. A PC is a certificate issued by the court that offers a period of protection to a debtor from creditors when applying for relief.

The report noted there has been a 17% increase in approval of PCs since 2022, which it said could be attributed to increasing cost of living and rising interest rates.

“This combination created considerable uncertainty in individuals’ personal circumstances and it is expected this will remain a further challenge in 2025,” the report said.