The Insolvency Service of Ireland (ISI) has published statistics for the second quarter of 2015 showing a continuing rise in alternative solutions to bankruptcy.
Over 400 solutions were arranged for clients by Personal Insolvency Practitioners between April and June of this year.
This includes 117 Debt Relief Notices (DRN), 75 Debt Settlement Arrangements (DSA), 150 Personal Insolvency Arrangements (PIA), and 92 bankruptcies.
In addition, 251 of 344 (73%) of the Protective Certificates issued are now for PIAs.
The ISI attributes much of this continued growth to the launch of its ‘Back on Track’ information campaign last October, which coincided with the waiving of application fees.
In total since the campaign launch, 1,340 Protective Certificates have been issued.
There have been over 1,000 approved arrangements between clients and creditors, and over 2,500 applications for debt relief have been processed.
The ISI said there has been a successful outcome in 77% of debt solution proposals.
The statistics also show the number of new bankruptcies fell between April and June, when compared with the first three months of the year.
The Association of Personal Insolvency Practitioners (APIP) has attributed the drop in bankruptcy applications primarily to the removal of the banks' veto that was announced in May.
Chairman of APIP Eric Hendy said: “An increasing number of debtors now see an insolvency arrangement as a more viable alternative to bankruptcy. They have more faith in the insolvency system as if creditors reject a deal, it can be appealed.
"From the ISI report, we can also see that 1,163 of the 2,521 applications received, to date, have been approved. This shows consistency in the number of arrangements getting approval and, ultimately, debtors who are getting closer to solvency", he added.
Explainer: Insolvency Service of Ireland
What is the Insolvency Service of Ireland?
The Insolvency Service of Ireland (ISI) is an independent statutory body set up to help sort out personal debt problems.
What is a Personal Insolvency Practitioner (PIP) and what do they do?
A Personal Insolvency Practitioner (PIP) is a professional advisor who will deal with your creditors on your behalf, aiming to put an end to any demands for unpaid debt.
What kind of solutions do PIPs aim to achieve?
Debt Relief Notice (DRN): This provides for the write-off of qualifying debt up to €20,000, subject to a supervision period, which can last up to three years.
Debt Settlement Arrangement (DSA): This provides for the agreed settlement of unsecured debt with no limits involved over a period, normally expected to be five years. Generally under such an arrangement there is a partial debt write-off, with an annual review of the agreement taking place.
Personal Insolvency Arrangement (PIA): This provides for the restructuring or settlement of secured debt up to €3m and the settlement of unsecured debt over a period, normally expected to be six years.
Protective Certificate: This is a notice issued by a judge that gives a debtor 70 days’ protection from their creditors.
In the case of a DSA or PIA, after a protective certificate issues, PIPs will have 70 days in which to develop an arrangement.
