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Court Review Introduced For Rejected Personal Insolvency Arrangements

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Court Review Introduced For Rejected Personal Insolvency Arrangements Bright Day Finance

For many borrowers struggling with mortgage debt, the introduction of a Personal Insolvency Arrangement was welcomed as a solution to help them deal with the burden of unsustainable debt.


A Personal Insolvency Arrangement is a formal agreement that includes secured and unsecured debts where a percentage of the debt is paid and creditors agree to write off any outstanding debt for an insolvent person.


However in reality, many of the Personal Insolvency Practitioners we work with are having Personal Insolvency Arrangement proposals rejected by mortgage lenders.


The report released by the Insolvency Service of Ireland for the 1st quarter of 2015 shows below the banks who are rejecting these debt solutions.


Percentage of cases rejected:

Start Mortgages 80%

PTSB / Springboard 48%

Tanager 33%

Bank of Ireland 21%

Ulster Bank 19%

AIB / EBS 14%

KBC 10%


Personal Insolvency Practitioners spent a lot of time with a borrower putting together their proposal for a solution to their debt problems, mortgage lenders would turn them down flat, even after other lenders had accepted their proposals.


What many people still don’t know is that at the end of last year, the minister for Justice, Frances Fitzgerald announced that if a Personal Insolvency Arrangement proposal is declined, the borrower can ask for it to be reviewed by the courts. If the reason for turning it down is found to be unfair, the courts could force the proposal onto lenders. This has been warmly welcomed by the public as the government appears to be standing up for borrowers who have been at the mercy of Banks and other lenders to accept their Personal Insolvency Arrangement proposals.


This new ruling isn’t a green light for all declined Personal Insolvency Arrangements being approved as the courts will look at the likelihood that the borrower can make the proposed repayments and the interests of all parties. As the courts are independent, we should see more balanced and informed decisions being made.  This should hopefully lead to more declined Personal Insolvency Arrangement proposals being overturned and being accepted in the future.


Minister Fitzgerald went as far as to describe the order as “a very significant milestone in the development of Ireland’s insolvency regime”.


The Personal Insolvency Practitioners we work with have appealed the decision of any mortgage lender who rejected a debtors Personal Insolvency Arrangement and have used this new court review process to gain the right decision for their client.


As well as Personal Insolvency Arrangements now becoming more attractive, they complement a growing list of debt solutions available to borrowers experiencing financial difficulties. These include Debt Relief Notices, Debt Settlement Arrangements, and of course, Bankruptcy.


Here is more information on the debt write off solutions now available, you maybe be eligible for one of these solutions below if you are unable to pay your debts as they fall due:


Personal Insolvency Arrangement

Formal agreement that includes secured and unsecured debts where a percentage of the debt is paid and creditors agree to write off any outstanding debt. This debt solution was brought in by the Government to help people deal with unaffordable secured debt (mortgage and secured loans) and unsecured debt (credit card, loans and overdrafts)


Debt Relief Notice 

Formal agreement that gives debt relief to people who have little or no disposable income or assets which they could use to repay what they owe. This is a debt settlement solution to clear less than €35,000 of debt. It enables eligible insolvent debtors to write off their debts where they can prove they are not in a position to repay their debt and it is unlikely their financial situation will improve in the next 3 years.


Debt Settlement Arrangement
Formal agreement where a percentage of the debt is paid and the creditors agree to write off any debt outstanding. A Debt Settlement Arrangement is an agreed settlement of your unsecured debts with affordable payments over a period of 5 years. If you owe more than €20,000 and have unsecured debt such as credit cards, loans and overdrafts and are insolvent then a Debt Settlement Arrangement could be the right solution to help your clear your debts.



A high court process to clear all your debts if you have little or no money available to repay your creditors. Before you consider applying for bankruptcy you must have explored the alternative solutions to bankruptcy which includes a Debt Settlement Arrangement, Personal Insolvency Arrangement and Debt Relief Notice. Unsecured and secured debt such as mortgages for family homes or buy to let properties, business loans and credit card loans can be included in bankruptcy.


It’s fantastic to see that anyone burdened with unaffordable debt has lots of different solutions now available to them.


We now have debt solutions available that will reduce your monthly payments on your credit cards, loans or mortgage and will write off debt you can’t afford to pay.


If you are struggling to pay to your mortgage, credit cards or loans please don’t worry as there is help available.  We can arrange a Free call for you with a Personal Insolvency Practitioner who will able to see if you are eligible for a debt solution.


R.McGonnell 14th January 2017




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