Insolvency service sees sharp rise in debt arrangements

Monday 14 July 2014 23.55
The ISI saw debt arrangements approved treble during the past three months
The ISI saw debt arrangements approved treble during the past three months

The Insolvency Service of Ireland has recorded a sharp increase in debt arrangements and bankruptcies over the past three months of the year.

Between April and June, 98 people were adjudged bankrupt, bringing the total for the year to 164.

There were 58 bankruptcies in the whole of last year.

The total debt involved in bankruptcy adjudications in Ireland since the beginning of the year is €278m, compared to €55m in 2013.

The ISI said there was also a threefold increase in the number of debt arrangements approved during the past three months compared to the first quarter of this year.

Almost three quarters of the debt restructuring arrangements reached a successful conclusion, involving at least some of the debt being written off by creditors. 

Since the ISI began taking applications last year, it has dealt with 850 cases involving €330m in debt, of which 45%, or €148m, was mortgage debt related to a debtor's principal private residence.

The ISI's statistics show that in cases involving secured debt, primarily home loans, the range of debt being written off in debt arrangements varies from zero to 61%.

The median writedown on secured debt (the average when both the largest and smallest writedowns are excluded) was 17%.

The median amount of unsecured debt being written off was over 80%.

The Irish Mortgage Holders Organisation said the ISI figures showed it is not working and not fit for purpose.