A BODY that represents insolvency experts in legal firms and accountancy practices has called for a major overhaul of the Insolvency Service.
The service, heralded as a solution for the crisis of massive household indebtedness, has been mired in controversy since it was launched this time last year.
The high cost of using the new service has been contentious.
Now the Irish Society of Insolvency Practitioners has called for an appeals process when a bank rejects a deal from a consumer and lower fees for using the service.
The society's members represent both banks and consumers who are heavily in debt, and it has 300 individual members.
A submission made to the Insolvency Service points out that the Government has committed itself to a complete review of the service by the end of this year.
The society points out that a very small number of insolvency deals have been done.
The most recent figures show that just 27 personal insolvency arrangements (PIAs) were approved in the April to June period. PIAs are a process to write off debts, including mortgages, over a five to seven-year period.
"It is well accepted that the demand for PIAs and DSAs (debt settlement arrangement) since the establishment of the ISI has been well beneath expected levels," the submission says.
It noted that some banks are vetoing debt deals that involve mortgages on homes.
"Some banks are unreasonably refusing to participate in viable PIAs," the submission says.
But it points out that the creation of the Insolvency Service has prompted banks to do more informal deals with over-indebted householders.
It calls for the period of bankruptcy to come down from a maximum of five years to three.
The five-year bankruptcy process has meant lower numbers opting for this than expected, it said.
The official assignee in bankruptcy cases should be obliged to deal with his interest in a family home within three years, the submission says.
There should be no VAT charged on the services of a personal insolvency practitioner. VAT of 23pc is charged by Pips.
Fees for insolvency deals should be reduced from €500 to €50, the society said.
It also calls for the names of people benefiting from deals to be withheld by newspapers.
And the society wants Pips to be able to address a court directly, without having to retain a solicitor. All PIA and DSA deals have to be approved by the circuit or high court.
Pips should not be subject to strict Central Bank rules known as debt management adviser rules, the submission says.
And the limit of €3m in debts for people to qualify for a personal insolvency arrangement should be raised, according to the Irish Society of Insolvency Practitioners.
The society is chaired by Barry Cahir of William Fry Solicitors, with other officers drawn from the likes of Mason Hayes & Curran, BDO, KPMG, and Eugene F Collins.