F-words may just hold the key to new insolvency guidelines

Debt may be the f-word in many households, but for those fearing being put through the wringer by the new Insolvency Service, the f-paragraph might provide reassurance.

Paragraph f, sub-section 3 of section 23 of the Personal Insolvency Act 2012, states that when deciding what income an individual should be left to live on while their debts are being processed, there should be regard to “the need to facilitate the social inclusion of debtors and their dependants, and their active participation in economic activity in the State”.

And while exactly what that means won’t be clear until guidelines as to what constitutes reasonable living expenses are published next week, it does suggest the service aims to be pragmatic rather than punitive.