Wednesday, 28 February 2018

Ceisteanna (126)

Michael McGrath

Ceist:

126. Deputy Michael McGrath asked the Minister for Justice and Equality the number of personal insolvency arrangements made, including arrangements that were both accepted and rejected by the financial institution in relation to residential mortgage loans, by each financial institution in each of the years 2015 to 2017 and to date in 2018; the number refused in relation to residential mortgage loans by each financial institution in the same period; the number of refusals in relation to residential mortgage loans that have been referred to the courts by financial institution for the same years, in tabular form; and if he will make a statement on the matter. [10336/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Justice)

The Deputy will be aware that the Insolvency Service of Ireland, (ISI) is an independent statutory body under my remit. The ISI’s mission is, by operating the statutory framework for personal insolvency solutions, to return insolvent people to solvency and full participation in social and economic activity.

The Insolvency Service of Ireland (ISI) does not record information in relation to each individual financial institution. However, the ISI issues quarterly statistics setting out the number of personal insolvency arrangements and the acceptance level by creditors in aggregate. These statistics are published on the ISI website www.isi.gov.ie. The specific data requested by the Deputy is not available in tabular form

I can inform the Deputy that, to date, the ISI has returned over 6,000 debtors to solvency with over 2,000 of those cases being Personal Insolvency Arrangements (PIAs) which deal with mortgage debt. In over 90% of these PIA cases, debtors have been able to stay in their homes.

The solutions introduced in the Personal Insolvency Act 2012 have also had an indirect impact on the number and quality of over 120,000 informal agreements between debtors and creditors, as reported by the Central Bank of Ireland. Because arrangements agreed under the Act are public and court approved, they set precedents for the terms of agreements that will be acceptable to a court. Debtors now have realistic alternative options available to them through the ISI if negotiations break down.

The Section 115A court review process, introduced with effect from November 2015, permits a debtor to ask the court to review and assess the reasonableness of a Personal Insolvency Arrangement proposal which has been refused by creditors, and which includes mortgage arrears on the debtor's home.

Currently, there are over 500 such cases before the courts. I am advised that a significant High Court judgment in early February addressed two key issues that had become a logjam in the process. Namely, technical issues around the application for a court review and a fear from personal insolvency practitioners that creditors might pursue them for costs in a personal capacity. I understand that these issues have now been adequately addressed. The judgment has been positively received by both the Insolvency Service of Ireland and Personal Insolvency Practitioners. Subject to any possible appeal, it is expected the judgment will lead to increased activity in Personal Insolvency Arrangements.

I can also advise the Deputy that Abhaile, the Government's national Mortgage Arrears Resolution Service, ensures that people who are in danger of losing their home have access to free professional advice, including advice from a Personal Insolvency Practitioner. As of 23 February 2018, 8354 vouchers for professional financial advice and help on home mortgage arrears from a Personal Insolvency Practitioner have been issued through Abhaile. Additionally, a borrower may apply for legal aid to the Legal Aid Board to seek a court review under section 115A where their proposed Personal Insolvency Arrangement had been rejected by the creditors. Up to 23 February, legal aid had been approved under the Abhaile scheme for 607 such reviews brought under the personal insolvency legislation.