Free Legal Advice Centre expresses 'concerns' about Insolvency Service

The Free Legal Advice Centre has said that while it welcomes the opening of Ireland's new Insolvency service it does have some concerns.

The service, which is being presented as a alternative to bankruptcy, begins accepting applications today from people who hope to have some of their debts written off.

Anyone applying to the Insolvency Service of Ireland will have to be approved by a third party or a registered Insolvency Practitioner.

The Director of FLAC, Noeline Blackwell explains her worries: "In those two arrangements, debt settlement arrangements, personal insovlency arrangements, people are going to pay off debt from income for assets they have over a period of five or six or seven years.

"What's not payable over that time will be written off. It's crucial to both arrangements that you have excess income in which to make some stab at paying off your debt.

"We are very concerned that there is a large group of people out there who don't have that excess income."

The head of the new service, Lorcan O'Connor, said the system should help to alleviate the country's mortgage crisis.

Mr O'Connor said the service offers those struggling with debt a second chance:

Mr O'Connor said: "Most importantly of all, people will have some hope and light at the end of the tunnel in that there will be now a suite of solutions available to people who have difficulties paying their debts.

"So that they know they do have an option to return to solvency and have that second chance, I think, everyone would agree people deserve."