Numbers seeking insolvency solutions falls

Hundreds of people in mortgage arrears have reached settlements with their creditors through the Insolvency Service of Ireland (ISI) this year but the numbers applying for help has fallen.

Up to the end of last month, 675 people had secured Personal Insolvency Arrangements (PIA) this year, enabling them to enter an agreement that combines debt write-downs, payments restructuring and spending restrictions with a 95% success rate in keeping them in their home.

A further 272 secured other forms of agreements — Debt Relief Notices or Debt Settlement Arrangements — around other forms of debt.

These numbers are likely to be similar to or slightly lower than last year by the time the picture for the full year becomes clear.

However, it is already clear that the number of new applications for the debt resolution options offered by the ISI is down. By this time last year, there were 3,507 new applicants and 4,626 by the end of 2017. To date this year there are 2,750.

That is despite Central Bank figures that show there are still more than 66,000 mortgages for family homes in arrears around the country, with more than half of them in arrears for more than a year.

ISI head Lorcan O’Connor said more could be helped.

“I encourage anyone with serious debt issues to consult a personal insolvency practitioner or an approved intermediary,” he said.

One of the criticisms of the PIA process is the banks have to agree to the arrangement and just half of all PIAs (51%) worked out are ultimately agreed.

Mr O’Connor said: “The ISI is working closely with personal insolvency practitioners and creditors in a bid to increase the rate of ‘Yes’ votes.

“Where a creditor votes no to a PIA, a debtor can still apply to court for the case to be reviewed and if the court deems it appropriate, have the arrangement confirmed.”

Meanwhile, wide regional variations have emerged in the numbers of debt solutions approved over the last four years. Waterford tops the list with 46.3 debt solutions per 10,000 adults, while Limerick has the lowest rate of just 10 per 10,000.

The rate in Cork is 23.5. The ISI had no explanation for the differences.