Dáil Éireann Debate, Tuesday - 17 April 2018
495. Deputy Éamon Ó Cuív asked the Minister for Justice and Equality the number of applications under the personal insolvency arrangements that have been completed each year since inception; the details of plans he has to make this option more attractive to those in arrears; and if he will make a statement on the matter. [15952/18]
Amharc ar fhreagraThe Personal Insolvency Act 2012 comprehensively reformed and updated Irish Personal Insolvency Law and brought Ireland in line with international best practice, by providing for a range of debt resolution options within a statutory framework which balances the rights of creditors and debtors.
The Personal Insolvency Arrangement (PIA) is a solution which enables agreed settlement of secured debt up to 3 million euro, (more if all secured creditors consent) and unsecured debt with no limit, with a duration of up to six years. A PIA is the insolvency solution most suited to a borrower in Mortgage Arrears on their family home. Under section 104 of the Personal Insolvency Acts, the personal insolvency practitioner (PIP) preparing a personal insolvency proposal has a duty, as far as reasonably practicable, to design it on terms which will not require the debtor to dispose of an interest in their principal private residence or to cease to occupy it. There are exceptions to this obligation only where the costs of remaining in the home are disproportionately large, taking account of all relevant matters, or where the debtor instructs the PIP in writing that he or she does not want to remain in the home.
To facilitate access to the PIA as an option for borrowers where repossession proceedings have been initiated, legislation was enacted in 2013, namely, the Land and Conveyancing Amendment Act, to specifically provide for an adjournment of a repossession court case in order to allow for a homeowner to apply for a PIA which would keep them in their home.
The section 115A court review process was introduced with effect from November 2015. Under this provision, where a creditor or creditors refuse a proposed personal insolvency arrangement which includes mortgage arrears on the debtor’s home, the Court can be asked to review the creditors’ refusal. Where the Court is satisfied that the proposal is overall fair and reasonable, it has power to impose it on the creditors. This effectively removes the so-called “Bank Veto”.
As the Deputy will be aware, the Insolvency Service of Ireland (ISI) publishes statistics relating to all available statutory personal insolvency solutions (including PIAs) on its website on a quarterly basis: therefore, the statistics sought by the Deputy are already published.
The following are the statistics requested.
Personal Insolvency Arrangements Approved by Year
|
Year |
PIA |
|
2013 |
0 |
|
2014 |
126 |
|
2015 |
619 |
|
2016 |
697 |
|
2017 |
733 |
|
Total |
2175 |
This total of 2175 personal insolvency arrangements approved includes PIAs that have been imposed by the Courts under the section 115A court review process.
A significant number of section 115A cases have been pending before the Courts, awaiting the High Court judgment in the Meeley, Taafe and Foye cases which was delivered on 5 February 2018. Effectively, many s. 115A cases were being adjourned before the Courts pending the outcome of two technical and procedural challenges brought by creditors, which were addressed by this judgment.
The Meeley judgment confirmed and developed earlier High Court decisions on the parties entitled to bring section 115A applications. It also confirmed and developed earlier High Court decisions which held that creditors are not entitled to seek their legal costs against a Personal Insolvency Practitioner (PIP) personally in a s. 115A application, save in 'highly exceptional' situations such as bad faith by the PIP concerned.
Subject to any possible appeal of the Meeley judgment, it is expected that these outstanding court review cases can now be resolved. The Insolvency Service of Ireland, which is a notice party to all s. 115A applications, indicates that some 560 such cases are currently pending before the courts. The ISI has stated that it expects the number of section 115A cases brought and decided to rise sharply during 2018.
In addition, my Department is currently finalising a review of Part 3 of the Personal Insolvency Acts, which includes reviewing the operation of personal insolvency arrangements. My officials have completed extensive work on the review, which included a public consultation launched last year. I expect to receive their report towards the end of May. In consultation with the Minister for Finance, I expect shortly afterwards to finalise a report to be laid before the Oireachtas, and to bring proposals to Government to address the review’s recommendations – including, subject to Government agreement, proposals for legislative change.
