More than 1,000 people assisted with mortgage debt in 2022 

Of the 1,151 Protective Certificates that were issued, 90% were for Personal Insolvency Arrangements (PIA), the solution that deals with mortgage debt. Picture: Denis Minihane

More than 1,000 people had to be helped with debt in 2022, the majority them with mortgage arrears, according to the Insolvency Service of Ireland (ISI).

It also confirmed 105 people were adjudicated bankrupt during the year.

Of the 1,151 Protective Certificates that were issued, 90% were for Personal Insolvency Arrangements (PIA), the solution that deals with mortgage debt.

Some 95% of borrowers who availed of a PIA had terms that saw them remain in their family home while 44.3% of borrowers had a reduction in their mortgage debt through an average write-down of €158,174.

Some 1,226 people in debt availed of free access to financial and legal advice by way of Abhaile vouchers.

Since the beginning of the Abhaile scheme in 2016, 13,639 vouchers have been redeemed, with the total value of the debt amounting to €6.49bn, €3.99bn of which relates to mortgage debt.

Of those who availed in 2022, 87% were in mortgage arrears for more than two years while 82% were recommended a statutory solution.

Some 1,076 approved insolvency arrangements were secured in 2022, down from 1,193 in 2021, a slower decline when compared with 2020.

The ISI said the slowing decrease may be due to factors related to the aftermath of the covid-19 pandemic and its effects on the uncertainty of personal circumstances.

“The challenges of the current cost-of-living increases coupled with upward interest rates are likely to impact significant numbers of borrowers, which may suggest that there could be an increase in the number of applications going forward but this is by no means certain,” the report reads.

Meanwhile, 105 people were adjudicated bankrupt in 2022, down from 199 in 2021, while 189 people exited bankruptcy, up from 135 in 2021.

Undisclosed assets

Elsewhere, investigations uncovered more than €6m in undisclosed assets compared to €3m in 2021.

During 2022, the Official Assignee (OA) carried out 185 investigations which resulted in the discovery of undisclosed assets such as bank accounts, cars, properties, rental income, and transfers of assets before bankruptcy.

“The integrity of the system depends on bankrupts making full disclosure and cooperating with the OA. This OA will continue his policy to vigorously pursue the recovery of assets not declared,” the report reads.

During 2022, there was a noticeable trend of debtors who established their centre of main interest in Ireland being adjudicated bankrupt in Ireland. That saw an increased number of investigations into assets that may be located outside of Ireland.

ISI director Michael McNaughton said despite a turbulent year, engagement between personal insolvency practitioners and creditors continues to improve “as evidenced by increasing rates of protective certificates converting into agreed insolvency arrangements". 

“Last year was an extremely turbulent one for the economy with significant financial pressures falling on individuals and families as a result of large and sustained inflation and interest rate increases throughout the period.

“The insolvency framework provides a range of solutions both for people who may find themselves falling deeper into an existing unsustainable debt situation and for people who may be experiencing this very stressful situation for the first time."