Bankruptcy numbers down but other debt options increase
THERE has been a surprise fall in the number of people being adjudicated bankrupt.
This is despite the bankruptcy term falling from three years to one year from January 29 last.
The Insolvency Service said there was a rise in other debt options, which people may have opted for instead of seeking to be declared bankrupt.
In the first three months of this year a total of 111 people were declared bankrupt.
This was down from 162 in the same three-month period last year, and a decease on the 142 who were adjudicated bankrupt in the final three months of last year.
The fall in bankruptcy numbers comes as there was a 26pc surge in new applications for personal insolvency applications (PIAs), the solution designed to keep people in their family home.
Changes in the law mean that homeowners that have had a PIA voted down by their bank can now appeal this to the courts.
Director of the Insolvency Service Lorcan O'Connor said: "The 26pc growth in PIA applications is likely due to the newly introduced court review process, sometimes referred to as the removal of the 'bank veto'."
He said the fall in the number of bankruptcies may reflect the fact that indebted people are instead opting for other insolvency deals, such as PIAs.
Some 169 PIAs were approved in the first three of this year. This is up 31pc on the same period last year.
And there was a rise of 40pc in the number of debt settlement arrangements (DSAs) to 60 in the January to March period. A DSA is a settlement with lenders to repay a portion of unsecured debt over a five-year period.
However, there was a fall in the number of debt relief notices (DRNs) to 71 in the first three months of this year. A DRN provides for the write-off of up to €35,000 of unsecured debt over a three-year period.
Meanwhile, personal insolvency practitioners (PIP) have been successful in a number of appeals of personal insolvency arrangements that were vetoed by lenders.
Pip Kerry O'Neill of R Hendy and Co got the high court to overturn a insolvency arrangement rejected by Pepper, as agent for Pentire Property Finance.