{"id":1431,"date":"2013-12-17T09:16:17","date_gmt":"2013-12-17T09:16:17","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=1431"},"modified":"2019-02-01T09:21:03","modified_gmt":"2019-02-01T09:21:03","slug":"debt-in-ireland-2013","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/debt-in-ireland-2013\/","title":{"rendered":"Debt in Ireland 2013"},"content":{"rendered":"\n

It is interesting to look back to 2009 and what we then felt needed to be done then to address the problems of personal insolvency so as \u2018to alleviate the suffering of people with personal debt\u2019.<\/p>\n\n\n\n\n\n\n\n

We reported that the Irish Government \u2018was under enormous political and financial pressure due to the economic crisis, the bank crisis and soaring unemployment\u2019 and that little had been done to help ordinary people. At that time it seemed that \u2018the builders, the banks and the politicians were hogging the limelight each seeking solutions that would enable them to enable them to rise from the ashes of a crumbling uncompetitive economy<\/em>\u2019.<\/p>\n\n\n\n

\"Euro<\/figure><\/div>\n\n\n\n

We reported that \u2018some observers were then predicting a tsunami of personal debt<\/strong><\/em>\u2019\n and we remarked on the \u2018failure of successive governments to legislate \nto provide relief in that area\u2019. We contrasted the jurisdictions of the \nUK and Ireland and described the chasm of differences in terms of \npossible solutions. We recorded the fact that \u2018in the UK the Insolvency \nAct was enacted in 1986 and gave birth to Individual Voluntary \nArrangements, commonly called IVAs\u2019.<\/p>\n\n\n\n

An IVA deals with personal debt as distinct from \ncorporate or business debt and is a formal agreement between the debtor \nand his or her creditors to repay a portion of their debts over a \nlimited period, usually no more than five years, although it could be \nfor a shorter period, and is binding on all parties. At the end of the \nterm, provided the debtor has adhered to the agreed terms, all their \ndebts are discharged. For more information on IVAS see \u2018How does an IVA \nwork?\u2019 on our sister website or go to our IVA section on National Debt \nRelief.<\/em><\/p><\/blockquote>\n\n\n\n

The UK also enacted the Enterprise Act in 2002, further bolstering the insolvency legislation.<\/p>\n\n\n\n

We noted that \u2018no such solution for personal debt above \u00a315,000 had \nbeen enacted by the Irish government in the intervening twenty three \nyears\u2019. We also referred to the fact that \u2018the UK had also introduced \nDebt Relief Orders to cater for people with debts of less than \u00a315,000 \nand Administration Orders for people with debts of less than \u00a35,000\u2019. We\n reported that the \u2018bankruptcy legislation has also been reformed in the\n UK, making it a most attractive option for many people in financial \ndifficulty, with discharge within twelve months the norm nowadays\u2019<\/p>\n\n\n\n

We also quoted some telling statistics back then in 2009: \u2018in the UK \nin 2008, more than 67,000 people petitioned for bankruptcy. By contrast,\n only four people opted for bankruptcy in Ireland in 2008 although this \nis expected to rise sharply in 2009. The cost, delay, complexity and \nconsequences of bankruptcy in Ireland are so severe that it is a most \nunattractive solution for either debtors or creditors. Of these factors,\n cost is undoubtedly the greatest barrier.\u2019<\/p>\n\n\n\n

Finally in 2009, we strongly advocated that \u2018the Irish bankruptcy \nlegislation should be thoroughly overhauled and that alternative \nadditional solutions such as IVAs be enacted in legislation. With the \navailability of the UK blueprint of its 1986 Insolvency Act together \nwith its successful implementation over the last quarter of a century, \nit should not be a difficult challenge for Irish legislators to draft \nand enact proper personal insolvency laws. Apart from the obvious goal \nof enabling debtors to deal with their personal financial problems in a \nfinite time frame and to the satisfaction of their creditors, it would \nalso enable creditors to crystallize the extent of their personal bad \ndebt impairment, and report this more accurately in their balance \nsheets. This would enhance confidence in the Irish financial system and \nprovide a regulatory framework for dealing with personal insolvency\u2019.<\/p>\n\n\n\n

Let us fast forward then to December 2013<\/strong>. All of \nour 2009 recommendations have been accepted culminating in the enactment\n of the Personal Insolvency Act 2012 which was signed into law in \nDecember 2012. The saddest part of all of this is that it took over \nthree years to introduce the new laws and it has taken almost a further \nyear to \u2018commence\u2019 implementation of the new personal insolvency \nmeasures. Unfortunately, the new measures have failed to \u2018mirror image\u2019 \nthe successful UK legislation and have imposed very stringent conditions\n and barriers on the long suffering insolvent Irish debtor, including \nthe imposition of additional costs making the Irish solutions more \nexpensive than their UK equivalents.<\/p>\n\n\n\n

The 4 new Irish solutions<\/h2>\n\n\n\n

Debt Relief Notice<\/h3>\n\n\n\n

The Debt Relief Notice<\/strong> or DRN is very similar to the UK\u2019s Debt Relief Order or DRO. It applies to insolvent persons with unsecured debts of under \u20ac20,000, disposable income of less than \u20ac60 per month and assets of no more than \u20ac400, with some exceptions. Unfortunately the Irish DRN lasts for three years whereas the UK DRO lasts for just one year.<\/p>\n\n\n\n

Debt Settlement Arrangement<\/h3>\n\n\n\n

The Debt Settlement Arrangement<\/strong> or DSA is very similar to the UK\u2019s Individual Voluntary Arrangement or IVA. It applies to insolvent persons with unsecured debts only but with no upper limit to such debts. It does not deal with secured debts and the normal term of a DSA will be five or six years. Applicants for a DSA must in all cases seek a Protective Certificate or PC from Court prior to proposing a DSA to creditors. (The UK abolished the requirement for an Interim Order \u2013 similar to a PC a number of years ago, except in extreme cases where legal action or other enforcement action was already in progress against the debtor).<\/p>\n\n\n\n

Personal Insolvency Arrangement<\/h3>\n\n\n\n

The Personal Insolvency Arrangement<\/strong> or PIA is a new innovative insolvency solution with no equivalent or similar solution in the UK jurisdiction. It applies to insolvent persons with both secured debts (subject to a cap of \u20ac3million, unless creditors consent to higher limits), and unlimited levels of unsecured debts. The normal term of a PIA will be six or seven years. Applicants for a PIA must in all cases seek a Protective Certificate or PC from Court prior to proposing a PIA to creditors. (The UK abolished the requirement for an Interim Order \u2013 similar to a PC a number of years ago, except in extreme cases where legal action or other enforcement action was already in progress against the debtor).<\/p>\n\n\n\n

Bankruptcy<\/h3>\n\n\n\n

Reform to the bankruptcy<\/strong> laws is the fourth strand \nof the changes to personal insolvency legislation in Ireland and \n\u2018commencement\u2019 of these reforms has just recently been announced by the \nMinister for Justice, Equality and Defence, Alan Shatter. The key \nreforms are: automatic discharge from bankruptcy after three years (down\n from twelve years but still significantly longer than the UK\u2019s one \nyear); the court may order a bankrupt debtor to continue to make \npayments to creditors for a further five years after the three years \ndischarge period); bankrupt persons may retain certain personal \nbelongings up to a value of \u20ac6,000 (double what they could previously \nretain);  pre-bankruptcy transactions may be reversed for up to three \nyears, an increase on previous law relating to the look-back period; \ncreditor\u2019s petition for bankruptcy must be based on a minimum debt level\n of \u20ac20,000 (up from \u20ac1,900).<\/p>\n","protected":false},"excerpt":{"rendered":"

It is interesting to look back to 2009 and what we then felt needed to be done then to address the problems of personal insolvency so as \u2018to alleviate the suffering of people with personal debt\u2019.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-1431","post","type-post","status-publish","format-standard","hentry","category-general-debt-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=1431"}],"version-history":[{"count":3,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1431\/revisions"}],"predecessor-version":[{"id":1476,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1431\/revisions\/1476"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=1431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=1431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=1431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}