Big write downs expected under new debt rulesMonday 26 August 2013 07.17
The head of the Insolvency Service Lorcan O’Connor has indicated that the average write down on unsecured debts for those entering personal insolvency arrangements is expected to be two thirds of what is owed.
The agency is due start accepting applications on 9 September.
From this date, people unable to pay debts will have a number of options open to them, short of having to avail of formal bankruptcy.
Mr O’Connor said in the UK average write down of unsecured debt in these kinds of arrangements is two thirds, adding that he had no reason to believe it would be materially different in Ireland.
He said there are what he described as “other solutions” for those in mortgage difficulties, adding that he believed banks will engage in the process.
The four main banks are due back before the Finance Committee next month.
Committee Chairman Ciaran Lynch says they will be seeing how banks are operating when it comes to individual lenders.