Personal Insolvency Bill to be enacted by the end of the year

The Insolvency Bill has finally passed all stages the Oireachtas and will be enacted before the end of the year.  It is due to come into force by the end of March next year.

The main purpose is to provide a mechanism is to deal with the resolution of loans in difficulty ranging from €20,000.00 up to €3,000,000.00. 

It is hoped that the Act will in the appropriate circumstances, bring about a level of debt write off.  The Act provides for the fall back situation that if agreement cannot be reached between the debtor and the financial institution concerned that bankruptcy may be an unavoidable consequence.  The bankruptcy period has been reduced from 12 years to a more manageable 3 year period although there are circumstances where this can be extended to 8 years if there has been evidence of non-disclosure on the part of the debtor. 

Much of the debate in relation to the legislation has centred around the veto which Banks will have on any debt forgiveness proposal.  However the reality is that the Banks will have to exercise a certain amount of commercial sense to any such proposals.  If it simply refuses to agree to reasonable proposals it is possible that debtors will opt for bankruptcy and the Banks will lose out significantly on the security of its assets.

There are three personal insolvency arrangements created by the Banks;

1. Debt Relief Notice which deals with debts of less than €20,000.00 where people have a very low disposable income and where they have no secured assets.  It is envisaged that such debt relief notices will be negotiated directly between the debtor and the Banks.
2. The second arrangement is a Debt Settlement Arrangement which deals with unsecured debt of greater than €20,000.00.
3. The third element which is likely to be the most used of the three options is the Personal Insolvency Arrangement (PIA) which is aimed at those with secured assets including mortgage debt in excess of €20,000.00 but no greater than €3,000,000.00.  This will only apply where there is no possibility of full repayment. 

This will involve negotiations with a Personal Insolvency Practitioner who will try to negotiate an agreement between the debtor and the institution.  Any such arrangements must be approved by the Circuit Court.  The Minister has indicated that eight specialist Judges will be assigned to the applications.

In order for such a proposal to be approved no less than 65% of the secured lenders must agree to the PIA which will involve payments by the debtor for a period of six years.

Time will tell as to how successful this Act is going to be but it is likely to be of significant assistance to people with severe mortgage debt.  We at Dillons have been advising many clients on Personal Insolvency related issues for a number of years.

For further information on the provisions of the Act or how we can assist you please contact Brendan Dillon on 01-296 0666 or info@dillon.ie

Merry Christmas from Dillon Solicitors

Merry Christmas from Dillon Solicitors As we come to the end of our 20th year in practice it has been another year where the economic recession continues to bite and impact on everybody's day to day lives.  At Dillon Solicitors it has been no different but there are signs of light at the end of the tunnel.  While the domestic economy continues to drag there are signs of a stabilisation in unemployment and that the housing market has begun to bottom out.  Prospects for growth in my view are dependent on a number of crucial issues being addressed namely the significant concession on the bailout terms for the Government as well as the enactment and implementation of the Personal Insolvency Bill.  The overhang of domestic borrowing continues to be a huge impediment to economic recovery. While 2012 has been another very challenging year for the Firm we have managed to grow the practice in some very significant areas.  Some examples of this are; Acting for Property Receivers. Assisting clients in difficulty with Banks in handling negotiations and advising generally in relation to these issues. Family law - we continue to offer options of mediation, collaborative law and all other family law options. SME advisory work - we act for a large number of small and medium sized enterprises in relation to general advisory work as well as dispute resolution and employment advice. Property - we have seen a significant increase in property related work.  In June 2011 we launched our "Auction Title Reports" service which has proved to be a huge success in the various distressed property auctions. Elderly Issues - we have advised on a whole range of issues in this area including Wills, Enduring Powers of Attorney, Wards of Court applications, appointment of Care Representative, as well as assisting clients in extracting Probate and other related matters. We are looking forward to 2013 and one hopes that the property market will continue to recover, the huge issue of personal debt will be dealt with and the domestic economy will begin to show some signs of recovery. In recent years the Firm has invested significant time and effort in improving its practice management systems.  This is good for our clients as well as the Firm.  Putting in place good practice management systems means that we can carry out our work while delivering a more efficient and consistent service to our clients.  We continue to monitor client feedback and we wish to thank all of our clients who have completed client service questionnaires and for your very positive feedback.  In 2011 we became the first Law Firm practising solely in the Republic of Ireland to achieve the Lexcel standard which is the Practice Management standard for Firms operating in the UK.  There are approximately 1200 Firms in the UK who are Lexcel accredited.  One of the largest Firms in Ireland have recently followed suit and other medium sized firms are also applying for Lexcel. We underwent our annual Lexel audit in August of this year and we are pleased to confirm that our accreditation was renewed for a further year. We were also delighted during the year to be short listed for the Leinster Firm of the Year in the Inaugural Irish Law Awards. During 2013 we plan to provide an e-zine service to our clients which we hope will be a useful addition to the service you already receive from us.  We hope in the e-zine to focus on practical topics which will be of benefit to you our clients. I want, on behalf of everybody at Dillon Solicitors, to thank you once again for your business in 2012 and to wish you and your families a very Happy Christmas and a prosperous 2013. Kind Regards Brendan Dillon  Dillon Solicitors