Insolvency only for the well off?

We see regular headlines indicating that insolvency is only for the ‘well off’, this is simply not true. The group making this statement do have an interest in such a claim because their main source of funding is going to end soon and it may be that they want state money to fill the gap which is behind the call for a state sponsored solution.

Insolvency isn’t just for the well off, we have shown in the past that it’s actually creditors who pay for the various insolvency solutions, this is a fact of accounting, not of opinion.

Perhaps the greatest testament of insolvency isn’t the numbers opting for it, we know they are low, but the fact that banks suddenly (and not coincidentally) started doing serious deals with people once it became an option.

They also ask PIP’s to run the applications past them prior to going for a full protective cert and that gives them the ability to make a better offer direct to the client – again, …

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Independent piece by us: Why insolvency will be the only game in town

We wrote an opinion piece in the Irish Independent about insolvency and how using some form of it will be required to make lasting debt solutions. It appeared in the paper at the start of the month:

Even detractors will start to sing off the Insolvency Service of Ireland hymn sheet. The change of attitude that is about to take place will be interesting to watch. People who did nothing other than put down personal insolvency solutions claiming they don’t work will soon be converting and turning to genuflect at its altar. Why? Because informal debt solutions alone have too many downsides, and they aren’t backed by insolvency legislation that gives defined start and end times or other set boundaries to the deals. For the companies doing informal deals there’s the new regulatory burden, which creates more administration in the process and drives up costs, which end up heaped on the already financially pressed people who need the help. The Central Bank authorisation process is both long and hard, and a further round of changes to requirements is due out …

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Some solutions don’t work

While there is provision within the insolvency code to allow a personal insolvency application with more than €3,000,000 of debt to be considered, it is not highly likely that we will see much of this. The reason being that insolvency solutions are often predicated on some level of reasonable recovery.

This is the same as examinership for companies, so the individual must be a ‘going concern’, where they aren’t then bankruptcy becomes the more viable option which is perhaps also more appropriate.

So the message is simple, don’t try to use solutions that don’t or won’t work. Insolvency is often critiqued for any manner of reasons, but that is in part because it isn’t the actual appropriate solution.

Equally, bankruptcy may not be, we had a client this week who would be better off working with the bank then opting to go to the UK for an IVA style solution, the only thing we know for sure is that there are no forgone conclusions in dealing with debt and each case is unique.

So be weary of getting into what …

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Irish Sun covers BankruptcyAdvice.ie

The Irish Sun did a piece about us the content of the article is below:

PEOPLE struggling with massive debt have been told they can eradicate it through their own DIY bankruptcy. More than 1,200 people have sought help since Irish law was changed last month, with thousands more expected to go down that road this year.

But despite the numbers already signing up, the Government has just announced plans to overhaul the new personal insolvency regime to make it easier and cheaper.

The Irish Sun’s Mr Money Karl Deeter is part of a group who have set up the perfect tool for anyone seeking bankruptcy. He said: “There is often a protracted process when it comes to applying for bankruptcy but that doesn’t have to be the case. We predict in the course of the next year thousands of people will want to avail of the new legislation.

“Through DIY bankruptcy we can provide all the help and support a person needs. “Bankruptcy is non-negotiable so once you apply it’s …

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Expert Group on Repossessions – what does it mean?

The Expert Group on Repossessions has submitted its report which was part of the 9th Troika review. It outlined some of the problems with the repossession process on the side of both borrowers and banks and made some suggestions on how the process could work better.

Far from being a free for all on repossessions as some have envisaged, it places much blame on banks and suggests standardised documentation for the courts so that there is some commonality across the banks operations when it comes to court.

There was also a rejection of thresholds and minimum payments which was pushing back on Troika suggestions on the matter.

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Insolvency Service of Ireland update

The Insolvency Service of Ireland put out a press release in relation to news stories stating that the personal insolvency legislation was to be changed. Full release without edits is below.

Both the Minister for Justice and Equality and the Insolvency Service of Ireland (ISI) have given a commitment that the effectiveness of Personal Insolvency legislation will be kept under review and that if issues arise that need to be addressed, that they will be addressed.

This has already resulted in some amendments to the legislation during 2013 which were of a minor nature and primarily operationally focussed.

Contrary to some media reports that significant changes to the personal insolvency legislation are required in 2014, Mr. Lorcan O’Connor, Director of the ISI, indicated that this is neither contemplated nor necessary.

Mr Lorcan O’Connor also said: “Huge progress has been made in the area of personal insolvency in      recent months. Personal Insolvency Practitioners (PIPs) are reporting a significant increase in the numbers of enquiries from people who need their services. The ISI expects the number of cases to increase significantly over …

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Our PIPs – find them on the register

We have a few PIPs working with BankruptcyAdvice.ie and you can find them on the Insolvency Service of Ireland website. There you will find Seamus Carrick (PC00107) and Anthony Joyce (PC00109) who are both fully regulated Personal Insolvency Practitioners.

That doesn’t factor in the legal, accountancy and financial advice experience we also have, but we think it’s important that you know you are dealing with people where their qualifications are recognised and registered. Some companies will put a junior in front of you, or the person heading the firm doesn’t have the relevant qualifications, we don’t operate like that, we don’t try to talk a good game, we are more interested in playing a good game.

 

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Insolvency unaffordable? That’s not true because here’s how it works

It’s really unfortunate that there are commentators who perpetuate the myth that ‘insolvency is unaffordable’. This is probably best viewed as an example of financial illiteracy showing through what should otherwise be reasoned deduction. Here is a video showing how creditors pay for insolvency, it goes through a simple ‘T account’ breakdown of where the cost lies.

The easiest way to think about it is like this, imagine you go to a bar with another person and they give you money to pay for drinks. The person who actually pays for the drinks is you, you give the money to the bartender, but the cost is born by the person who gives you the money to do it with.

Using that analogy the borrower is the one paying, but the cost is born by the creditors, check out the video, it will help to make that clear.

And remember that when you hear how a person ‘can’t afford to go insolvent’ that they are making the mistake of repeating something they heard without investigation, normally what they really mean to …

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New bankruptcy regime expected within days

We have been informed that the new bankruptcy changes are due to come into force in a matter of days. This will mean that the discharge period will be reduced to 3 years automatically (in line with European norms).

Another change that will come about is that people will be able to advertise intention to petition for bankruptcy on the Insolvency Service of Ireland website. up to now a national paper advertisement was required, but that is set to change and instead a person will be able to submit their name to the ISI website meaning a figure of several hundred euro can be saved in the process.

All things considered, the changes will bring about both a reduced cost to going bankrupt as well as the introduction of the reduced automatic discharge time. What this means for people in debt who are considering bankruptcy is that the older version (this ‘change’ has been flagged for some time and many commentators are of the mistaken opinion the current discharge time is 3yrs) is eradicated and the discharge will occur in …

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