Insolvency service needs to step in where banks refuse to tread
The debt resolution process needs to be speeded up and the balance swung in favour of distressed borrowers
When I heard, last week, about the massive upsurge in business at the ISI, it seemed as if the insolvency service was working. I couldn't have been more wrong. The ISI reported a take-off in the number of cases applying for insolvency protection. On investigation, it turned out that there were only 850 applications, resulting in 180 insolvency agreements, since the ISI opened its doors last September. That's about two agreements for each member of staff at the ISI. There are nearly as many PIPs (Personal Insolvency Practitioners) as there are agreements.
Last year, Alan Shatter, the Minister for Justice at the time, estimated there would be about 15,000 Debt Settlement Arrangements and Personal Insolvency Arrangements annually and 3,000- 4,000 Debt Relief Notices. There's a long way to go. The ISI is making a song and dance about a paltry few who have used the service. There have been 164 bankruptcy adjudications in 2014, not surprising given the amount of negative equity.
The price of justice for people who can't pay the bills can run up to €10,000 plus VAT to pay a PIP. Insolvency solutions are like a prison sentence for whole families who are forced to live on the breadline for far too long. It's early days yet and we need the ISI. If it wasn't there, the banks would be even slower.