Wednesday, October 8, 2014
By Caroline O’Doherty
The State agency set up to help free ordinary people from unmanageable debts has a fraction of the clients it expected despite the massive level of household mortgage, loan and credit card arrears in the country.
Lorcan O’Connor, director of the Insolvency Service of Ireland (ISI), admitted the numbers using the service were “exceptionally low” as he announced a number of incentives to persuade people to come forward.
Until the end of next year, the application fee, which can be up to €500, is being waived for all new applicants, and a payment of €750 will be made towards the costs incurred by a personal insolvency practitioner (PIP) in preparing a debt resolution plan that is subsequently rejected by the creditors.
Latest figures show just 80 personal insolvency arrangements have been approved since the ISI began a year ago. PIAs are for people with combined mortgage and other debts they cannot pay and were expected to be the ISI’s main business.
Just 58 debt settlement arrangements — for people with more €than 20,000 in unsecured debts such as credit card arrears and overdrafts — have been approved as well as 172 debt relief notices for people with unsecured debts of less than €20,000. That’s a total of 311 arrangements when the ISI expected to be handling 7,000 a year.