THOUSANDS of debtors who are waiting to avail of debt relief under the Government's new personal insolvency regime will face "consequences", including being placed on public registers, according to Ireland's new debt tsar.
In one of his first public appearances, Lorcan O'Connor – Director Designate of the Insolvency Service of Ireland (ISI) – said the Personal Insolvency Act is a "very important step" for Irish society.
But the restructuring and insolvency expert warned that there would be consequences for the large number of debtors lining up to avail of the various debt relief schemes under the new legal regime designed to take debt settlement away from the courts.
"There are consequences to availing of one of these schemes, including information being made available to the public and creditors," said Mr O'Connor at a seminar on the new personal insolvency regime hosted by Grant Thornton, the accountancy and financial management firm.
"It is important that debtors realise there are data protection issues at play here," said Mr O'Connor.
Mr O'Connor told more than 350 money advisers and professionals who attended the seminar that it was incumbent on banks, creditors and those wishing to act as debt mediators or personal insolvency practitioners (PIPs) to learn as much as possible about the new legislation in the coming weeks.
More than 21,000 are expected to access the ISI within its first year of operation and new laws have been passed to recruit a specialist cadre of judges – serving county registrars – to deal with the anticipated influx of people seeking debt relief.
The seminar heard that half of all debtors experience mental health problems, such as depression and anxiety.
The comments came as Central Bank Governor Patrick Honohan warned that too lenient an approach to the mortgage crisis could lead to an "intolerably heavy bill for the exchequer".