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IRELAND’S INSOLVENCY SERVICE opened its doors today, five months after it was first established.
If you’re not sure what the Insolvency Service of Ireland (ISI) involves, or if you are suitable for it, we’ve put together an explainer for you.
What is insolvency? Is it the same as bankruptcy?
Insolvency is the inability of a person (debtor) to pay their debt. It is not the same thing as bankruptcy, and describes someone who can’t pay their debts or who has more liabilities than assets. Insolvency can lead to bankruptcy.
A court determines that a person is bankrupt, and legal orders are put in place to resolve bankruptcy. Bankruptcy is generally seen as a last option and highly affects your credit rating.
Why did the ISI begin today?
The service was put in place in March of this year, and was set up under the Personal Insolvency Act 2012.
It is in a position to accept applications from today. There are 80 staff members who are expecting to be very busy.
Have people already contacted the ISI?
Yes, the latest reports say that 4,500 people have already contacted them, so a flood of applications is expected.
How does it work?
The ISI provides for three new debt settlement procedures, and reduces the term of bankruptcy to three years, down from 12 years.
As the Citizens Information site puts it, the ISI “is responsible for all matters concerning personal insolvency”, and administers new debt settlement procedures, authorises approved intermediaries, and monitors the operation of the new procedures.
The service begins with people getting in contact with either a Personal Insolvency Practitioner (PIP) or Approved Intermediary (see the next question for what they are) to bring about an insolvency arrangement.
So, what does the ISI actually do – and what does a Personal Insolvency Practitioner or an Approved Intermediary have to do with it?
The ISI is broken down into three options, depending on the person’s level of debt and type of debt (eg secured debt and unsecured debt)
Let’s go through the first option, for people with the least amount of debt: Debt Relief Notice (DRN)
You would undertake a DRN, which enables you to write off your debts where you can prove you are not in a position to repay them and it is unlikely your financial situation will improve in the next three years.
Here is more in-depth information on a DRN.
Secured debt would mean a mortgage, for example, whereas unsecured debt would be credit card debt or term deposits.
Then you have two options, depending on your type of debt:
A Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement (PIA).
A DSA must be agreed by the debtor, and approved at a creditor’s meeting by 65 per cent of creditors in value.
It must be processed by the ISI and approved by the court.
The unsecured debts subject to the DSA will be settled over a period of up to five years. This can be extended to six years in certain circumstances.
More in-depth information on DSAs is available here.
On to the third option:
However, certain debts cannot be included in a PIA and the creditor must give consent for certain other debts.
There is a limit of €3million to the secured debt that can be included in a PIA – unless all secured creditors give their consent to a higher amount.
The PIA and DSA differ in that the PIA includes secured debt.
Under a PIA, debts will be settled for up to six years, with a possibility of it being extended to seven years.
Secured debts can be restructured under a PIA.
More in-depth information about a PIA can be found here.
What are reasonable living expenses?
The ISI has set out specific guidelines for how it calculates ‘Reasonable Living Expenses’.
If you visit this part of their website, you can find out how they apply to things such as childcare and housing.
How broke do you have to be before you use the service?
As you can see from above, if you have a debt level of under €20,000, an income of under €60 per month after reasonable living expenses are deducted, and a maximum of €400 assets, then you can undertake a Debt Relief Notice (DRN).
What will be done about people who try to hide assets (like a secret bank account or house abroad) from the ISI?
According to Lorcan O’Connor from the ISI when he spoke on Morning Ireland today, there are four ‘safety nets’ to prevent this.
O’Connor said that if the creditor tells the ISI even after this that somebody hasn’t disclosed information, they will take consequences, meaning legal action.
What training and qualifications will the personal insolvency practitioners have?
The practitioners are generally accountants working in the insolvency area.
They have to do an ISI-recommended course, which is usually about 2 – 3 days long, and then apply for registration.
The ISI needs to ensure the person is qualified, has undergone the relevant training, and also has the proper insurance and back-up staff.
Is there anything like this in any other country?
Yes, there are insolvency services in place in the UK, for example.
The Irish system has some similarities to the UK system but also has some unique aspects – such as how it deals with mortgages – that the UK system does not.
How much does it cost?
The ISI fees are:
According to Lorcan O’Connor, the cost of a PIP is from around €2000, and this money is paid out of what is available to creditors.
However, some more complex cases may require a bigger fee – there are examples on the ISI website that show that costs can vary, such as this DSA scenario where the cost is €4,000.
Some PIPs are charging fees up front, while some are not. The fees are supposed to be taken as part of the overall arrangement.
AIs cannot charge a fee.
Do the banks have a veto? How likely are they to use it?
The process is an ongoing one, as Ross Maguire from New Beginnings explained.
He said that after you apply to the ISI and meet your PIP you are given 70 days for the PIP to put together your application to your creditors.
Often, the bank will be the biggest creditor, and could reject the proposal. But the PIP is constantly working to put together the best proposal so that it will be accepted, and can keep returning to the creditors for negotiation.
Also, the PIP gives the creditors two proposals – one with the details of how much they would be paid under the ISI, and one with what they would be paid in the case of bankruptcy.
Usually, said Maguire, banks would get a lot less money in the case of bankruptcy, perhaps nothing, meaning that the ISI would be preferable.
Who out of my creditors gets paid what?
The creditors are paid back the money proportionate to what they are owed.
How will it affect my credit rating in the future?
While you go through the procedure you will be insolvent, but when you come through the process you become solvent, so you will actually have a better credit rating then.
So it will affect your credit rating, but you should come out of the procedure with a better credit rating.
What can I do if I enter into the service, but feel I’m being treated unfairly?
If a PIP advised a bad deal, you could sue them – but they have to be very careful that they offer a deal that is sustainable, said Maguire.
He said that the last thing a PIP would want is to go through a process and the person remain insolvent.
PIPs have to have large insurance in case things go wrong.
Where’s the official ISI website, and the contact details?
Well, it’s right here.
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Desperation on both sides for the pension vote by deciding what scraps to give to the public.
Perhaps paying back their undeserved 6grand rises might demonstrate that they
actually gave a fcuk about ordinary people. Ireland is a joke, people laugh at the US
because Of Trump.He is only one person, our Dail is packed with people of the same mentality.
Nothing will change unless voters turn their backs on civil war parties.
TDs are getting a 6k rise? More nonsense repeated on the journal unchallanged. Link?
The difference between FF and FG is just one of style. Since the foundation of the state, Ireland has been run in the interests of domestic and international capital and at the expense of the majority working class. And we’ve had a century of mass poverty, unemployment and education as a result while the pampered elite in business, politics, law, the media etc viciously protect the status quo which serves them so well. Any ordinary person who votes for FF, FG or Labour is complicit in their own exploitation.
Emigration not education. We have indoctrination rather than education.
I know this is going to get red thumbed but here goes!! Firstly I have always objected to and always will object to the notion of universal payments such as old age pension. There are many in receipt of the pension who simply do not need it and leave large cash estates to their children when they die. The pension should be paid on a needs basis. This would raise the basic level for those in greatest need and allow them live their retired years in comfort and dignity. I also oppose the increase of a fiver a week….carers and others like them should be given an increase first
But people pay into their pensions Gary in the form of PRSI. Now I agree that most will never contribute anything close to the value of a state pension. Maybe we should move to a universal contributory pension for all workers with a social wefare to up for the least well off. Won’t happen anytime soon though.
@Reg: Here’s the link at your request:
Reg get back to your brown nosing blue shirt buddies,what rock have you just climbed out under
An independent link please! Pay rises are being capped over 60k under Lansdowne Road.
@Reg:. Here you are reg.
Yesterday the Government introduced a bill to lift the pay freeze off public servants including those of TDs and as a TD I feel it’s ludicrous to give the scope for TDs to get a pay increase while the vast majority of this country has felt little or no recovery. The bill, disguised as a Public Sector pay increase, was passed last night by 106 TDs but the people who will benefit from this bill most are the high income public sector workers who earn in excess of 70k per annum, they will see the biggest increase including the Labour TDs who drafted this legislation.
https://www.google.ie/url?sa=t&source=web&rct=j&url=http://maureenosullivan.ie/latest-news/government-give-themselves-a-payrise/&ved=0ahUKEwi12uXM4M3PAhWLCMAKHRsFBuEQFgghMAE&usg=AFQjCNEzPa8TgvuunXBT_n1cwmnghcAAPw&sig2=QZkd3bk_HkRlIKr2x4puyA
TD Criticises €6K Pay Rises For Dáil Deputies.
A TD is criticising the fact that Dáil deputies are to get pay rises.
TDs are currently paid €87,252; that will rise to €92,672 by 2018, two increments
Its part of a deal struck between unions and Government on pay rates for all public servants.
Lower grade staff are getting pay increases of around €1,000, but those in more senior roles are to be accorded pay rises of over €3,000
Speaking to Kildare Today, Independent TD, Michael Fitzmaurice, says there should be a freeze on pay increases for higher earning public servants.
pension-related deduction which formed part of the Lansdowne Road deal.
However, the Irish Sun on Sunday has now learned no such arrangement has been organised for 2017 or any future years.
This was confirmed to us by the Department of Public Expenditure. A spokesman added: “The decision applied to Ministers and Ministers of State in office under the previous administration.”
This means that the Taoiseach, along with Fine Gael Senior and Junior Ministers, will have an extra grand to spend compared to those in power before the last election.
The Department of Public Expenditure also told us no other TD decided to waive the pension benefit
exclusively revealed that Dail politicians will see their salaries shoot up under a new public sector pay deal. The Lansdowne Road Agreement struck with unions is reversing pay cuts imposed in 2013 on senior “principal officer” public servants — the grade that deputies’ earnings are pegged to.
It means TDs, who currently earn €87,258 a year, will on top of the €1,000 rise, have their salary hiked to €89,965 on April 1, 2017 — and raised again to €92,672 at the start of 2018
Micheal Martin said ” that while Budget negotiations were continuing….”
‘ talks have been taking place among the two parties (FG,FF), along with independents and members of the Independent Alliance in Government ‘
‘Fianna Fail has had a prominent role in negotiating this years budget as a result of the confidence and supply deal…..’
Is there any more proof needed that FF and FG have entered a coalition while usurping the demcratic right of having a true opposition in the Dail.
This budget will be as much FFs baby as FGs.
Gary there are some who worked hard all their lives and invested their savings in bank shares and Morgage only to have been ripped off. They are now relying on the state pension to keep them going. I think anyone who works hard and pays taxes deserves to be paid a pension. I think we have too many people who never worked and never intend to eork as the taxpayer is already contributing to their lifestyle who don’t deserve a pension
Don’t worry lol – your sister party (FF for those who don’t know), will be back in power soon because they’re peddling the AAA nonsense.
Fiddling while Rome burns…
Meanwhile, TD’s are getting a €6k rise from January
https://trickstersworld.com/2016/10/07/philosophical-gossip/
Ff fg are to big to fail supporters they are the same we should be demanding real change.the establishment has destroyed this country monkey nuts is all there offering.time to vote the parasitic civil war partys out once and for all
Agreed Bobby!
There you see FF’s priorities for all to see, feck the carers or those on disability as long as they are seen to take care of the pensioners before everyone else. After all the pensioners were the ones least effected by the destruction that FF brought on this country and vote en masse for FF, even after the ruination they brought on these pensioners children and grandchildren.
FF priority is power. Nothing else. Keep voting independent and keep the twins to under 50% of seats. Eventually a new politics will emerge. My kids will benefit.
Yep paul f failed always got the pensioners on side only clever thing they ever done
Wasn’t that long ago Bertie was promising pensioners €300 a week.
The same generation were responsible in Scotland for a No vote stopping their grandchildren’s country having full control of their destiny
Both parties are equally despicable. I remember sometime ago commenting that I felt Leo was positioning to go after pensions, using carers and the disabled as an excuse. He still is. I don’t believe for a New York minute he has any intention of giving us a raise – what he does intend is not to raise pensions, or raise them by less than 5 quid, and blame us for it. Similarly, Micheal and his cronies are blatantly prepared to leave carers and the disabled twisting in the wind (even worse, living on the streets) as we’re not of electoral use to them, while bribing pensioners to vote for the party which has time and again sold this country out (literally and figuratively) in the interests of lining their own pockets. Scunners, the lot of them
Fianna fail should change its name to me fein
Micheal Martin getting the product placement in!!!
He is more Up S**t Creek than in Deep River Rock.
FF making noise but we all know budget will pass as seagulls do what they are told
The Titans of Irish politics squabble over a 5 euro raise in the OAP as both reject 13,000,000,000 in owed taxes by the worlds biggest most profitable corporation. All this in the #Centenary year. You cant think you cant add you look awful ,,, You’l go along way.
They need to lower the payment for long term unemployed and put the difference into the short term (6 months) unemployed payment. It encourages people who find themselves out of a job to find another. Someone who hasn’t worked ever and made no contribution gets the same as someone who has worked all their lives paying taxes and lost their jobs. It’s shocking and contributes to our social welfare state
@David Byrne: wrong, long term unemployment is down 16.6% year on year. Unemployment is less than 8% and more people are at work than pre 2008 crash.
https://trickstersworld.com/2016/10/06/unthinking-tanks/
Get real. Cutting social welfare payments for the long-term unemployed will not encourage people to find another job, it will only encourage desperation and criminality. And what exactly is wrong with the welfare state? Have you any idea how appalling conditions were for people before it?
People might be working but most who are working in construction are on zero hours contracts so can be back on dole tomorrow. And more people aren’t working. Our total population dropped so percentages don’t do justice. I’m not sure of the numbers but I would say since 2008 more people emigrated or went back home then got jobs.
Social welfare should be there to support people who cannot work, the sick/elderly and people who cannot find work. People who don’t want to work should not be entitled to the same benefits. And them using the threat of I will commit crime if you lower my payments. You think that’s acceptable? There are jobs out there, zero hour contracts on minimum wage maybe, but a lot of those people who aren’t working now will never work and I just think it’s unfair that they get the same as someone who worked all their lives and finds themselves unemployed.
Whether you think it’s fair or not is irrelevant. It’s common sense. Before the welfare state, if you were out of work you didn’t eat, unless you resorted to beggary, thievery or prostitution. Do you want to go back to those days?
@David Byrne: Honestly David? You are not sure of the numbers?
I provided stats from the CSO that disproves your poor bashing generalisations and you come back with more unsubstantiated claims.
I suppose it’s easier to punch down rather than up.
@ David Byrne; another case of sitting on a very precarious mid level ledge while being pi**ed on from above, looking down and blaming those swimming in that cesspool and looking to take their life jackets.
Lets hope that ledge doesnt crumble soon !!!
A sure the poor TD,s have to live as well
All the mapped out theatre from FF to distance themselves from their budget with FG. Tuesday would be a laugh only for how serious it is for the most vulnerable in the State.
No story on the United States, Britain and Saudi Arabia dropping bombs on a funeral in Yemen yesterday that killed or injured over 700 people or are war crimes only reported on when committed by our enemies that you bang on about all the time??
Unbelievable isn’t it, the images of dozens of charred bodies mangled is something that reminds you of Vietnam. The British and Americans are in the command rooms directing the Saudi bombers yet what are the chances of western countries labelling this a war crime? Could you imagine if the Russians had killed hundreds in this way made worse by a return strike on emergency staff, there would be a UN Security Council meeting right now, war crimes accusations would be plastered all over the media. Look at the Guardians response as an example, they are pathetic propaganda tools and nothing more!
Sure it’s all Russia’s fault. Has to be.
Both parties know that an extra 5 euros a week to pensioners won’t be much help to them, a loaf of bread and a litre of milk perhaps. If they really cared about pensioners they would set an annual cost of living increase of 2% and give a winter fuel allowance, the same as the do in the UK.
In the UK, pensioners receive (Stg.119.30) €132.45 per week. Irish pensioners receive €230 per week. That’s €100 per week more received by Irish Pensioners, with a further €5 promised in the budget.
Please explain exactly how you would like Ireland to follow the British model?
Plus medical card. Plus medication costs capped at 25 a week.
@George Hogan: It’s very easy to explain whereas most Irish pensioners shop locally. Take yourself to Asda, Tesco’s or Sainsbury’s in the north and you will know what I am talking about.
Yep, you’re right ROI is stupid! UK rocks!
What are FF up to? I actually agree with Leo!
What FF always do. Naked populism.
Just consider this these politicians of every party and none have agreed on a €6000 a year increase that works out @ €115.38 per week. And now pensioners have to listen to these same individuals postponing that paltry of €5 a week until next year. I suppose really we have only ourselves to blame.
One says it’s pensioners or carers and they choose carers and the other says that’s nonsense pensioners should be priority. All I see is both groups trying to pit pensioners and carers against each other for scraps while they live on champagne and steak.
While the left hand is flying a kite I wonder what the left hand is at…
Fianna Fáil are two faced chancers.
They are manipulating this for their own gain. They are on a power grab.
Let them not forget, the economy is fuxxed because of them.
If Fianna Fail don’t protect the pensioners their on a looser then.
Pensioners should get a 7 or 8 euro increase in their weekly payment from January. A similar increase should apply to other SW recipients, with that being applied in the 2nd half of 2017.
So why should pensioners get priority over those with disabilities or the carers?
Any increase in state pension should be means tested. Same goes for SW recipients. A blanket increase is just a kick in the shins for those working but struggling pay check to pay check.
PaulJ because the Werther’s Original munchers are loyal to the party that crashed the economy.
What if TD’s rise was put back 6 months and State Pension increase btought forward to January -would Mickey (mouse) Martin agree to that – its a bit loke foghting over deck chairs on Titanic – acting like kids with State’s Finances – either way we have to borrow!
Just read an article by economist Colm McCarthy stating that this budget won’t do anyone any real good and will also store up problems with the deficit and government borrowing especially that we’re getting away with because of low ECB rates (due to end in March 2017) and Brexit only just starting. Meanwhile both FF and FG will claim they are the only ones with the competence to manage the economy and also the only ones who can take care of society, even though you’ll feel like smashing your head against a wall because you just can’t listen to anymore shameless evasions and self-promotion for votes at any costs. Drinking games based on holes and contradictions in politicians statements are usually fatal.
Our budget spending set out in the German parliament but carved up by local politicians. ” I will not have coalation relations with that party ” or words to that effect where said by both party leaders only last February. Kenny even admitted that cronyism is behind his choices for senators, board members of quangos and European appointments. Still people voted for them because we have nothing better or any other future than as a hidden tax haven for multinationals. Leo is not fighting with FF instead the next leader of FG is spooning up against his coalation partners for the next generation. This time it’s FG on top with FF the hard but firm silent partner. After the next election Martin could be Taoiseach supported by a few independants with Leo leading the opposition but voting with the FF goverment. It gets to the heart of what is rotten in Irish politics that we have no real choice. Even after committing treason against our country, FF will be back in goverment less than ten years after the crash supported by the party that kept FF policy’s going and took a pay rise every years while people suffered. FF and FG are the same party, the same short term planners who hope to be receiving a large pension when the country’s debt become too large. Or people start demanding a health service and public services for paying taxes. We were handed on a plate to Europe because we failed as a sovereign state now we are a second class citizen of Europe paying for the privilage of having Phil hogan as agri commissioner.
So Fianna Fáil have been working away in the background and burning the midnight oil on the budget. A fiver is all Fianna Fáil and Fine Gael think a pensioner deserves? If I was a pensioner I know were I’d tell them to stick their fiver.
I wonder if the DIRT tax will be lowered this budget?. Personally I think it should be lowered to 33% that’s plenty, and that bit of extra money in interest will find its way back into the economy, not muck I know but it all helps.
There is a rumour it will be lowered. No sure what to.
@Paul – Because on the law of averages, pensioners will live for a shorter period than the other groups.
F Fail got rid of the christmas bonus and the tv allowance for pensioners ,when FF BANKRUPTED THE COUNTRY
Yes by giving out stupid pay rises which pushed up the cost of living. Something had to give. Christmas bonus was one. Tax increases a USC another. Wr are inly realising the impact of Bertie. The impact of Enda will be alot worse.
Orchestrated dissent?
If Dara wants to hug Leo. Ask him l. You just never know.
If you take out the ‘:’ after the first word in the article title………………….
I can’t wait to see an Indian shortlisted leading FG
have your say