The insolvency Service of Ireland (ISI) recently released some interesting statistics on debt solutions for 2015. They report almost 1700 permanent solutions for debtors:

• 479 bankruptcy
• 641 Personal Insolvency Arrangements,
• 221 Debt Settlement Arrangements,
• 346 Debt Relief Notices

This translates to 70% more debt solutions in 2015 when compared to 2014.

Commenting on the statistical report, Mr. Lorcan O’Connor, Director of the ISI, said that

“the number of people availing of the debt solutions available through the ISI continues to grow.  There were a number of important developments in 2015 including the increase in the Debt Relief Notice threshold to € 35,000; the extension of the waiver of all ISI fees; the introduction of a court review of rejected Personal Insolvency Arrangements involving the family home and the reduction of the normal duration of bankruptcy to one year.  This augurs well for 2016.”

Talk to our experts in personal insolvency for more information.

One of the most frequent questions we get asked is what is the difference between a Personal Insolvency Arrangement (PIA) and Bankruptcy? The core difference is that with a PIA you enter into an agreed payment arrangement over a period of time  with your creditors whereas when you go bankrupt your debts are entirely written off. However with a PIA you can walk away with your reputation intact whereas when you are put on the bankruptcy list you are on it for life.

Personal Insolvency Arrangement

A PIA is a debt solution for people with secured debt (e.g mortgage) and unsecured debt (e.g credit card debt, term loans, overdrafts, credit union loans).

A PIA is a formal agreement between you and your creditors that will write-off some of your unsecured debt and restructure the remaining debt. In the majority of cases you would be able to remain in your home

Advantages of PIA over Bankruptcy

The maximum period for a PIA is 6 years but there is no minimum period, so a PIA can be over and complete after 3 months or 6 months or a year. These quick PIA’s are extremely popular.

Protection from Creditors (during a PIA creditors cannot contact you whereas during a bankruptcy they can continue to call and write)

• Peace of mind,
• Affordable, predictable repayments
• Reasonable standard of living
• Gives you financial stability, allows you plan again for the future
• Creditors get paid
• In majority of cases you would be able to remain on in the family home

Disadvantages of a PIA

A PIA lasts a maximum of six years whereas with Bankruptcy all debts are written off immediately on the day of the Court sitting. This means the stress and misery can be over after 8 weeks. People are allowed stay in a modest family home, but not a trophy home

To obtain a PIA you must have an income, bankruptcy does not require an income.

There is always the possibility that your application for a PIA will be unsuccessful and that your creditors may move for you to go bankrupt.

Download the Personal Insolvency Arrangement_guide from the ISI for more information about PIAs.

To fully understand what the best option for you is talk to a Personal Insolvency Practitioner. Contact PIP Ltd to arrange a free review today.

President Michael D Higgins signed the one year Bankruptcy into Law on Christmas Day. He felt it was too important to wait. In so doing he gave many an unexpected Christmas gift, easing their woes and stress coming into the new year.

He signed the Bankruptcy Amendment Bill reducing the duration of bankruptcy from three years to one year.

Get more information on Bankruptcy here.

Talk to a PIP about Bankruptcy today.

The cogs are in motion for reducing the term of bankruptcy from three years to one year. Minister Justice Frances Fitzgerald is bringing legislation to cabinet in the next few weeks and it will hopefully be enacted into law by the end of 2015.

A court review process for those seeking a Personal Insolvency Arrangement was brought into law on November 20th 2015. This essentially means that if you cannot come to an agreement with your bank regarding unsustainable debts then the courts can intervene and can impose an agreement on the bank.

The Minister for Justice and Equality, Frances Fitzgerald TD, has signed an order bringing into force on Friday 20 November the remaining provisions of the Personal Insolvency (Amendment) Act 2015, including the new Court review where a mortgage lender rejects the borrower’s personal insolvency proposal.

Under the new provisions, a borrower can apply for review by the Courts, if creditors such as the mortgage lender refuse the borrower’s proposal for a Personal Insolvency Arrangement to deal with unsustainable debts which include the mortgage on their home. The Court can examine the proposal refused by the creditors, subject to certain conditions, and if it considers the proposal fair and sustainable, using the tests set down in the legislation, will have power to impose the proposal on the creditors who voted against it.