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IRELAND MAY NOW have its own insolvency system, but many people are still seeking insolvency solutions in the UK rather than Ireland.
A total of 59 Debt Settlement Arrangements (DSA) have been agreed through the Irish system since September 2013.
The Personal Insolvency Act, which was signed into law at the end of 2012, introduced three new debt resolution processes – Debt Relief Notice (DRN), Debt Settlement Arrangement (DSA) and Personal Insolvency Arrangement (PSA) – which are intended to offer an alternative to bankruptcy.
UK
An Irish insolvency firm with expertise in the UK process, AJ debt solutions, said they have processed over 100 Individual Voluntary Agreement (IVA) agreements in the UK in the last 18 months.
IVAs are applicable to all types of unsecured debt over £10,000, including bank loans, credit cards, store cards, and overdrafts. The process provides for protection of personal assets, such as the family home, and requires that interest and late charges on all debts included in the IVA must be frozen by the creditors.
The process requires that the applicant establishes a centre of main interest in Northern Ireland, England or Wales, and a lump sum offer must be made towards the debt.
The company stated that about €1.4 million of Irish debt is being resolved through the UK IVA system every week as it is far less complex and drawn out in comparison to the Irish system.
Insolvency
Damian Heslin from AJ debt solutions told TheJournal.ie that for their clients who have the means to relocate to the UK for a period of four to six months, their system can be be very attractive.
In relations to DSAs, which are most similar to the UK’s IVAs, only 220 applications have been received and just 59 have been approved.
Stephen Curtis of the Irish Mortgage Holders Organisation said that there is very little difference between a DSA and an IVA in terms of the length and operation of the arrangements, meaning it would be surprising if a significant cohort of people would be willing to relocate to the UK for something that is available and operational in Ireland.
Figures from the Insolvency Service of Ireland show that since the options became available in early 2013, 1,152 applications have been received, but only 311 have been approved to date.
In comparison, 301 bankruptcy adjudications have been passed since the beginning of 2013.
Heslin said that there are definitely improvements that can be made to the insolvency laws in Ireland. He said that discharging someone from bankruptcy earlier than the three years, bringing it more in line with the UK’s one year policy, should be reviewed again, stating that entrepreneurs are being penalised by the system.
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We still look to the UK when we face difficulties.
And why not, they’re a soft touch
Spot on Tap.
Another foreign government’s solution for an Irish government’s problem.
Unwanted distressed debtors, unwanted highly qualified graduates, unwanted pregnant women.
The UK is great at fixing money problems, they recently threw us £2billion. Brits Out though!
Long expensive bankruptcy process in Ireland is now a little shorter but still as punitive because the legislation was written by the banks.
Keeping people in financial limbo for years
Instead of working and paying tax,
good luck to anybody going to the UK to get a fresh start and get on with their lives.
It’s 3 years now for bankruptcy and costs €200. You could hardly call that expensive. It costs a lot more in the UK.
Are you sure about b that ?
Totally agree, there was no consultation done with anyone outside the banking sector….all in favour of the banks. A lot of good people who want to restart business etc are just buried with this stupid set up here.
Yes. Check it out yourself if you are unsure. €200.
@ Johnny?
“It’s 3 years now for bankruptcy and costs €200. You could hardly call that expensive. It costs a lot more in the UK”
Who told you that Johnny?
Maybe you should talk to someone who has exited Irish bankruptcy and ask them what it has really cost them?
That’s of course if you can find anyone who has exited Irish bankruptcy.
They cut the price of becoming bankrupt – not the term or the conditions of it .
The conditions are just the same in the UK. Bankruptcy is not a soft option. It is cheaper now to go bankrupt here, but the term of bankruptcy is shorter in the UK. It’s not as straightforward as one year versus three years though when you consider having to move your life over there and the time spent establishing your COMI. If you have a home here, you have a reasonable chance of keeping it in bankruptcy in Ireland but not so much once you move abroad. If your COMI is in Bristol, it’s hard to argue that a house in Dublin is anything other than an asset to be disposed of.
Irish Times 20/10/2014
“However, the figures for the year to date in which the service has been operational for 12 months are stark: 311 arrangements in total, with (taking the 2013 budget) an average cost to the state of €23,794 each. To put that figure in context, the debt resolved in the 172 debt relief notices has as its upper limit €20,000. The State would have been better off paying all the debt owed and given the debtors some money for a holiday, rather than set up the ISI to deal with it”
http://www.irishtimes.com/business/financial-services/insolvency-service-statistics-suggest-it-is-unfit-for-purpose-1.1959333?page=2
As Irish taxpayers pay through the nose for Ireland’s farcical banker written ISI Quango.
Wouldn’t the Irish government be better giving Irish insolvency applicants a €10k grant each to go and seek bankruptcy in the UK?
Wouldn’t they be better doing that, than trying to funnel people through the dysfunctional, unfit for purpose Irish Insolvency system?
At least when someone exits the UK insolvency system, they have a clean slate and can make a fresh start and contribute to society again.
The Irish insolvency system is a tragic farce that turns it’s applicants into financial dependent zombies with no hope.
Another Gravy train for the elitists and their lackeys.
Typical. Ireland can’t solve its problems so let’s the UK solve it for them.
It’s good Ireland has the UK to solve many of its problems. Thank F for the United Kingdom.
Are people really complaining that people can’t walk away from there debts within a year? Who do you think gets left with the burden?
The reason why insolvency applications are so low is that those in debt don’t want to pay anything towards them. Why pay a hundred a week for years when you can just work in the uk for a year and get of scott free.
The fact people are making silly offers to their creditors isn’t helping either. There were a couple on TV who took out a 250k mortgage and through the insolvency system expected the bank settle for 6k. Yet the bank will be made out to be the bad person not taking the offer.
Walk away from their debts “within a year” Joe?
The bust was 7 years ago, most of joe public who have money problems, have been at financial deaths door since then.
What exactly do you want to be done with them Joe?
Do you want “Defaulter” permanently tattooed across their foreheads?
Do you want them to wear a bell around their necks and wail “Unclean” for the rest of their lives?
All bar none of the real culprits of the bubble have all availed of cushy discreet little champagne insolvency arrangements and payouts,
maybe it’s time that the government took their noose from around the victims necks?
“The fact people are making silly offers to their creditors isn’t helping either. There were a couple on TV who took out a 250k mortgage and through the insolvency system expected the bank settle for 6k. Yet the bank will be made out to be the bad person not taking the offer”???
If the banks stress tested this mortgage correctly
plus the other approx. 200,000 mortgages in arrears,
plus the other €10′s of billions of loans in arrears/distress,
maybe the couple would be able to pay their mortgage and the bank would have not bust itself and the entire country.
This couple’s €6k would be better spent going towards a swift, clear, transparent, professional, clean slate UK bankruptcy arrangement.
God only knows the term consequences that Sharter’s “All New” unfit for purposes Irish Insolvency legislation will inflict on it’s victims.
Sorry typo
“long term consequences”
Most people whom are ‘insolvent’ cannot afford to pay a hundred euro over a two month period never mind a week ..
And what did the bank get in the end,Joe?
whynotme, if your in negative equity it’s handier to go to the UK for a while then try to pay the debts. It is garda and teachers that are heading to the UK on career breaks that don’t want to try to pay back their debts. For a civil servant on a 50k job it’s easier to just go to the UK then be forced to pay a few hundred a week(which they can afford) in an insolvency arrangement. That’s how it works I’m afraid, and someone else is left to pick up the tab.
Joe
I would like to see the fact and figures of who is going over to the UK to become bankrupt .
‘A few hundred a week’ is over €10,000 a year . I would say that there would be a lot of banks willing to do deals with those individuals.
whynotme, under insolvency you’d be forced on a 50k salary to hand over 10k and banks would be more then happy with that. They(civil servants and other professionals) can afford it but go to the UK instead on career break with zero income, pay nothing towards creditors and come back to keep their salary to themselves. It’s common knowledge. It’s not the unemployed going to the UK, it’s the well heeled even look at Ivan Yates as a prominent example.
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