Efforts to establish new protocol for insolvency casesFriday 10 January 2014 17.12
The Insolvency Service of Ireland is to hold a conference for insolvency practitioners and banks next month in an effort to establish a new protocol to streamline the operation of debt deals.
The initiative follows the experience in Britain which showed that when a protocol was in place it resulted in 90% of restructuring offers being accepted by creditors.
The development does not change the insolvency law.
It comes as the Insolvency Service of Ireland has authorised its 100th personal insolvency practitioner, or PIP. These individuals broker deals between heavily borrowed individuals and creditors such as banks.
There had been concerns initially that there were not sufficient numbers of PIPs to deal with the number of insolvency cases.
It has also emerged that a decision will be reached on the first insolvency case involving mortgage debt within the next two weeks.
Lorcan O'Connor, director of the ISI, said that "huge progress" had been made in the area of personal insolvencies in recent months.
He said that due to the nature of the arrangements, his office expected to see "the number of cases to increase significantly
over the coming weeks and months", particularly in the second quarter of the year.
Meanwhile the Director of the Free Legal Advice Centres (FLAC) has called on the Department of Justice to keep a close eye on the numbers of people currently unable to avail of the personal insolvency arrangements because they are too poor.
Speaking on RTÉ's Today With Seán O'Rourke, Noeleen Blackwell said there should be monitoring of what is happening in cases where creditors are not agreeing to insolvency deals.
Ms Blackwell criticised the fact that people were not able to avail of the insolvency legislation unless they had a substantial income over a number of years, and that creditors could veto insolvency proposals that were put forward.
"This is something that the Department of Justice and Equality are going to have to keep a close eye on, how many people are not even able to approach an insolvency arrangement becuase they are too poor, and what is happening in cases where creditors are saying no deal is available.”
She also reiterated FLAC's proposal for a system of public insolvency practitioners, like state-funded legal aid, for those who are too poor to pay fees to private insolvency practitioners.
Ms Blackwell said she hoped the Department of Justice would recognise this when it was making adjustments to the personal insolvency legislation in 2014.
Ms Blackwell said there was a need for a streamlining of systems so that people would know what they are expected to produce to prove the debt they have, and so that creditors will have a common way of assessing that information.
She said at the moment both creditors and personal insolvency practitioners could be quite frustrated because everybody had a different way of approaching and dealing with debt.