Dáil Éireann Debate, Thursday - 18 July 2013
492. Deputy Ciara Conway asked the Minister for Justice and Equality in relation to the personal insolvency practitioners process, if he will clarify who will bring those citizens who have insufficient disposable income or saleable assets to pay fees, through debt settlement arrangement or personal insolvency arrangements options; and if he will make a statement on the matter. [36263/13]
View answer493. Deputy Ciara Conway asked the Minister for Justice and Equality if he will clarify if those persons who have insufficient means are to be denied the benefits of the insolvency legislation; if he will specify the avenues that are open to persons in this predicament; and if he will make a statement on the matter. [36264/13]
View answer494. Deputy Ciara Conway asked the Minister for Justice and Equality if will commit to ensuring that Money Advice and Budgeting Service will be sufficiently resourced to provide DSA & PIAs to low and or middle income households who are not commercially viable for PIPs to take on; and if he will make a statement on the matter. [36265/13]
View answer495. Deputy Ciara Conway asked the Minister for Justice and Equality if he will clarify an issue in relation to Debt Settlement Arrangement or Personal Insolvency Arrangements options (details supplied); if persons who have insufficient means are to be denied the benefits of the Insolvency Legislation; and if Money Advice and Budgeting Service is sufficiently resourced to provide DSA and PIAs to low and or middle income households who are not commercially viable for PIPs to take on. [36266/13]
View answerI propose to take Questions Nos. 492 to 495, inclusive, together.
The Money Advice and Budgeting Service (MABS), under the aegis of the Citizens Information Board (which comes under the aegis of my colleague, the Minister for Social Protection), provides a high quality service which assists people who are over-indebted or in danger of over-indebtedness, in particular those on low incomes. I am advised that in 2013, some €19 million has been allocated to fund MABS and that sanction has been given for 16 temporary staff to be assigned to MABS for up to two years, to establish an Approved Intermediary service. In addition to this dedicated services there will also be additional Approved Intermediaries, when authorised, located in MABS offices throughout the country. These Approved Intermediaries will not charge any fee for arranging a Debt Relief Notice. In accordance with the provisions of the Personal Insolvency Act 2012, Approved Intermediaries can only process Debt Relief Notices and do not have any role in relation to Debt Settlement Arrangements or Personal Insolvency Arrangements.
With regard to Debt Settlement Arrangements (DSA) and Personal Insolvency Arrangements (PIA) there are two separate sets of fees. The ISI fee for applying for a Protective Certificate for a DSA or a PIA and the Personal Insolvency Practitioner (PIP) fee. The fee payable to the ISI in relation to the issue of a Protective Certificate for a DSA will be €250 and €500 for a PIA. Insofar as Practitioner fees associated with the development of DSAs and PIAs are concerned, these fees will be negotiated with an individual debtor by the PIP in advance of a case proceeding and will be deducted from the amount of money an individual debtor is calculated as having available to pay their creditors during the term of the arrangement. These arrangements could last for up to 7 years. As such this fee should have a relatively minor impact on the debtor themselves. In fact some prospective Personal Insolvency Practitioners (PIPs) have indicated that, if and when authorised by the Insolvency Service of Ireland (ISI) to practice, they will not charge upfront fees for initial consultations with insolvent debtors. Furthermore, the Regulations relating to PIPs require them to clearly specify their level of charges and associated costs before being appointed by the debtor to develop an arrangement for a PIA or DSA. Based on experience in other jurisdictions, I am advised by the ISI that there have been indications that the issue of fees rarely arises. It is anticipated that debtors will be able to afford the application fees. It should also be noted that the reasonable living expenses guidelines published under Section 23 of the Personal Insolvency Act 2012 make allowances for savings and contingencies in addition to social inclusion money. It will therefore be possible for debtors to build up the money required for the ISI fee over a relatively short period of time. In cases where an insolvency arrangement is not possible, it will be open to the individual debtor to petition for bankruptcy, the term of which is being reduced from 12 years to 3 years under the provisions of the Personal Insolvency Act 2012.
