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THE TROIKA HAS raised concerns that the new personal insolvency legislation may not be sufficient to address the problems of the average Irish mortgage holder in distress.
The long-awaited changes to the personal insolvency regime are expected to come into operation from the beginning of next month and have been billed as fundamentally reforming how personal debts are handled in Ireland.
Among the key changes are that it reduces the period of bankruptcy from 12 to three years and allows for a person with debts of between €20,000 and €3 million to a enter a personal insolvency arrangement if they become insolvent.
However a leaked European Commission document obtained by TheJournal.ie raises concerns about how this will help average mortgage holders who are struggling with debt.
The document says that the €3 million cap may be “unduly high” and could encourage banks, lawyers and insolvency practitioners to focus on “big-ticket cases” rather than deal with “smaller but much more numerous cases of average debtors, who are likely to be facing greater distress”.
The document notes that the average mortgage debt in Ireland is around €300,000 currently.
The Troika raises fears that the new insolvency service, due to be established within the first quarter of this year, could be overloaded with big cases at the expense of smaller but more numerous cases, many involving struggling homeowners.
The document warns: ”The efficiency of the system could also be jeopardised if the Insolvency service is overloaded with large complex cases, which could involve a multitude of interconnected debts concerning not only a debtor’s principal private residence, but also those associated with investment properties or sole-trader businesses.”
The new personal insolvency regime has been criticised in some quarters because any debt resolution process requires the agreement of the majority of a person’s creditors, meaning the bank retains an effective veto over whether to relieve someone from their mortgage debt.
Despite the concerns raised, the Troika does acknowledge that the new regime “should help facilitate a step-change in the resolution of unsustainable debts”.
- additional reporting from Gavan Reilly
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All that over €50.. Seriously… Was it worth it.. A mans life .. Then being locked up for yrs.. Sometimes I wish people would take a deep breath and step back.. You step forward and it could be your last..
unnecessary bravado, insecurity, stupidity and a loss of a life, 50euro, live with that for the rest of your life.
Yet again the demon drink was involved ….
Can anyone explain the term “straightener” to me please?
Fist fight
Yeah, not a knife Vs fist fight. Just a fist fight. The kinda thing you did as a kid. I haven’t heard anyone say that word in about 15 years.
It originated in Liverpool and means a face to face meeting between individuals or groups with an issue between them. It might be “straightened out” with a civilised chat or it might escalate to a punch up or weapons or a shooting match.
Eight years for intentionally bringing a knife out to do serious harm. That is an absolute joke.
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