Friday 17 November 2017

Fewer people getting official debt deals as numbers of people declared bankrupt rise

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Charlie Weston Personal Finance Editor

There has been a fall-off in the number of people getting officially-sanctioned debt deals agreed with their lenders.

New figures from the Insolvency Service show fewer people got a solution under the auspices of the State debt body.

This has been put down to heavily-indebted people challenging refusals in the courts by lenders to give them a deal.

However, there was a rise in the numbers of people being declared bankrupt in the last three months of last year.

Head of the Insolvency Service Lorcan O’Connor said there was a strong rise in the number of applications his office received in the last three months of last year, compared with the same period in 2015 and compared with the previous quarter.

But new statistics from the agency show that there was a drop in the numbers of debt write-off, and debt restructuring, deals done in the last three months of 2016.

A total of 310 formal debt arrangements were put in place in the final quarter of last year. This was down slightly on the numbers arranged in the previous quarter.

Mr O’Connor said: “This is part reflects the number of cases currently in the courts system seeking a court review of proposals rejected by creditors.”

Recent changes mean those with unsustainable debts can challenge a refusal by lenders to give them a deal in the courts. This was an attempt to stop what was seen as a bank veto on debt arrangements.

The figures show that 181 people were declared bankrupt in the final three months of last year.

This was three times higher than in the previous quarter.

Mr O’Connor said: “The number of people availing of the debt solutions available through the Insolvency Service of Ireland continues to grow.  The number of applications has increased significantly since the launch of Abhaile, the State-funded service for people in home mortgage arrears, under which borrowers can avail of a free consultation with a personal insolvency practitioner.”

Mr O’Connor encouraged anyone with serious debt issues to consult a personal insolvency practitioner or an approved intermediary, on www.backontrack.ie, or by calling 076 106 4200.   

People can also freetext to 50015 for a call back.

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