Business Personal Finance

Saturday 30 August 2014

Changes to insolvency service 'inevitable'

Charlie Weston Personal Finance Editor

Published 13/02/2014 | 02:30

  • Share
Starting a debate: Alan Shatter wants to open up adoption to gay couples
Starting a debate: Alan Shatter wants to open up adoption to gay couples

JUSTICE Minister Alan Shatter has admitted that changes are needed to the new Personal Insolvency System while he also defended how it is operating.

  • Share
  • Go To

He was speaking at a conference for Personal Insolvency Practitioners (Pips) on introducing new ways to make the debt deals work more smoothly.

Mr Shatter said that some changes to the insolvency regime introduced last year were "inevitable", when he addressed the first conference of the new Insolvency Service of Ireland (ISI).

The conference is seeking views on putting a new protocol together for practitioners and creditors.

This would essentially be the rules of engagements for banks and Pips trying to do debt settlement arrangements (DSAs) and personal insolvency arrangements (PIAs).

A number of debt experts have complained that the new insolvency process is too expensive and too restrictive. They see the new protocol of an admission that the ISI system is not working for bust borrowers.

Pips charge between €5,000 and €10,000 for an insolvency deal, a sum many distressed borrowers cannot afford.

The protocol would provide a template for putting together an insolvency deal.

Mr Shatter said that this would ensure "to the greatest extent possible, a streamlined process surrounding debt solutions under the PIA".

He said having a protocol was in keeping with best practice in other jurisdictions and does not require amendments to existing legislation.

"A similar protocol was developed in the UK for their Individual Voluntary Arrangement which is comparable to the DSA here.

"The UK protocol, once it was agreed and adopted, resulted in faster decisions and significantly improved acceptance rates. Creditors there accept in excess of 90pc of protocol-compliant agreements put to them," he said.

David Hall of the Irish Mortgage Holders Organisation said changes were needed to the insolvency system.

"The bottom line is that it is not working. It is based on an aspiration but the reality is it needs big changes and the ISI conference was the start of a public acknowledgement that is it not working."

Mr Shatter defended the move to change the new insolvency system.

"I have never suggested that our personal insolvency legislation is set in stone. Rather, I have repeatedly and consistently said that if the new measures need improvement, then I will introduce whatever changes are necessary to ensure their success."

Indo Business

Read More

Editors Choice

Also in Business