The Insolvency Service of Ireland (ISI), the independent government body set up to help tackle personal debt problems, has published its statistics for 2015, which showed a 70% increase in cases.
Since the introduction of the ISI’s debt solutions and the reform of bankruptcy, more informal agreements between borrowers and their creditors have been reached.
Of the 1,548 debt solutions people in the Leinster area have availed of to date through the ISI, just 65 of those were in Kilkenny. In surrounding counties, 42 were in Carlow, 106 in Wexford and 54 were in Laois.
We know that the effects of problem debt on a person’s wellbeing and mental health can be severe and can prevent them coming forward for help. People have become so used to making personal sacrifices and struggling to make do with what they have, that they do not realise they are insolvent.
The word insolvency is not one that people associate with their situation, but the reality is that not being able to pay the bills in full as they are due; paying a little off each bill to keep creditors at bay and receiving letters and calls about missed payments are all signs of personal insolvency.
The ISI offers 4 debt solutions: Debt Relief Notice - a solution for people with low income, no mortgage and very few assets. This solution allows for complete write off of debts up to €35,000 and can be applied for, at no cost, through an Approved Intermediary, many of whom are based in MABS.
Debt Settlement Arrangement – a solution to problem debts that have built up outside of a mortgage, such as credit cards, personal loans, overdrafts. This solution features write-down and write-off of debts that cannot be repaid. It can be applied for through a Personal Insolvency Practitioner, professionals based around the country that are regulated by the ISI.
Personal Insolvency Arrangement – is a similar solution to the Debt Settlement Arrangement but it also includes mortgage debt and, where possible, allows a person to keep their home. Again, this solution is available through a Personal Insolvency Practitioner.
Bankruptcy – the solution for people for which the alternatives above are not suitable. The bankruptcy term is now reduced to 1 year.
All of the debt solutions overseen by the ISI, including bankruptcy, are designed to get a person back on track financially and at the end of the process the person will be solvent again and can start planning their future.
The reality is that thousands of people in Ireland are insolvent and in deep mortgage arrears. It is important for people who may be in fear of losing their homes to be aware that even if they have received letters threatening repossession, or a Court appearance date it is still not too late to sort out their finances and, hopefully, keep their home.
The statistics show that 3 out of 4 personal insolvency proposals put to creditors are being accepted and recent amendments to legislation mean that where creditors have rejected a proposed Personal Insolvency Arrangement, the borrower can seek a review by the Court.
The ISI would encourage people with unmanageable debt to visit www.backontrack.ie today to find their solution or call the ISI’s information line at 076 106 4200.