Mr. Lorcan O'Connor:

Before I make my contribution, I will introduce my colleagues. Mr. Christopher Lehane is the official assignee and head of our bankruptcy division. On my far left is Ms Breda Horgan from our regulation division. In our submission, we indicated that Mr. Kevin Kirwan from our case management division would be here but, unfortunately, he is ill. Ms Mary Murphy is the deputy official assignee and is also working with the Courts Service in trying to ensure the messaging for those faced with repossession and other debt difficulties is clear with respect to options. I hope that between us we will be able to answer as best we can any questions that the committee has. After my opening remarks, I will ask Mr. Lehane to make some points on the current debate about the bankruptcy term and whether a change from the current three-year term might take place.

Our first full year of operation was 2014. During that year, we were able to show that the new, innovative and complex legislation that the committee helped produce worked in practice. We saw our first successful debt relief note, or DRN, which is for people with very few assets and income; the first debt settlement arrangement, DSA, which is for unsecured debt; and the first successful personal insolvency arrangement, PIA, which is for those involved with difficulties arising from mortgage debt. By now, we have over 1,000 such solutions in place. In comparison with the time taken to establish similar regimes abroad, we did this in record time.

Together with the Courts Service, we also oversaw the successful introduction of an electronic case management system, which I believe is groundbreaking in terms of how judges deal with cases before them. No longer do we have boxes of paperwork in court but instead reliance is placed on electronic documentation. This project was a significant challenge in itself but certainly necessary for us to operate in an efficient manner. We have circulated to committee members testimonials from debtors who have availed of our services in the first appendix to our submission. We have also circulated the most common examples of cases we deal with in the second appendix. I have previously stated that I would have expected activity levels to be higher than they are, I could not overstate the value of our service to those that have availed of it and the personal relief it has brought to debtors.

Representatives of the Insolvency Service of Ireland appeared before the Joint Oireachtas Committee on Finance, Public Expenditure and Reform just over a year ago. At that time, we acknowledged that more needed to be done to increase activity levels. Shortly after our appearance, that committee issued its report on mortgage arrears matters, with the committee making four recommendations in respect of the insolvency service. We have implemented all four of them.

First, the committee recommended that efforts around communicating to debtors be stepped up. Within a month of our appearance we began consulting with a number of stakeholders and conducted focus group research during the summer that led to the launch of our "Back on Track" information campaign last October. Key elements of the campaign included a new dedicated website for insolvent debtors, simplified information guides, almost two dozen town hall events across the country and associated advertising. Our new guides were distributed widely to include the offices of all Deputies and Senators, all Money Advice and Budgeting Service offices, citizen information and family resource centres and the full network of libraries around the country.

Second, the committee recommended that the costs associated with applying for insolvency and bankruptcy solutions be reduced. In October, the service waived all application fees and the Courts Service also reduced fees that it applies to applications at that time. Bankruptcy application costs are now €270, down from almost €1,500 a couple of years ago. This also compares with almost €1,000 in the UK.

Third, the committee recommended that personal insolvency practitioners be readily available to all debtors. We introduced an initiative last October whereby the service would effectively underwrite costs up to €750 per case to ensure debtors would have access in all cases where a practitioner could help them. Fourth, the committee recommended a general review of existing - albeit new - legislation. One of the principal functions of the service under section 9 of the Personal Insolvency Act 2012 is to monitor the operation of the arrangements and contribute to the development of policy in the area of personal insolvency. The committee is aware that one of the commitments in the current statement of Government priorities was to complete a review of the operation of the Insolvency Service of Ireland to ensure it has the powers needed to support families willing to work their way through their debt problems. The service took an active part in this review.

The committee is also aware that the Government announced a number of initiatives in recent weeks. These go beyond personal insolvency to include areas such as mortgage to rent and general advice to debtors through the MABS network. Three particular points were announced that should increase activity levels for the ISI and help debtors in difficulty. First, when a creditor rejects a proposal made by a debtor and the personal insolvency practitioner, the debtor will have the right to seek an independent court review of the proposal. Subject to meeting certain conditions, the court will have the power to impose the proposed debt solution on all parties if it deems it fair and reasonable. Whereas three out of four cases were already successful, the perception among the public that a bank veto existed played a significant part in preventing debtors taking the necessary steps to seek the help that we can offer.

Second, measures are to be put in place so that court officials can steer borrowers who are involved in repossession proceedings proactively towards the service. This will ensure that the provision contained within the Land and Conveyancing Law Reform Act 2013 that allows for the adjournment of a home repossession case for two months to allow a debtor consult with a personal insolvency practitioner is availed of whenever relevant. Third, linking into a broader information campaign for those in mortgage arrears, the service is to receive funding to launch a sustained awareness campaign of the solutions available to insolvent debtors.

I expect this to commence in the autumn.

Lastly, I would like to draw members' attention to another significant achievement of the ISI in the past year. We published a standard debt settlement arrangement protocol in July of last year and a standard personal insolvency arrangement protocol in March of this year. The two protocols will make it easier for debtors to reach agreement with their creditors. The protocols will help debtors make more informed decisions and ultimately should lead to better outcomes for debtors in protocol-compliant arrangements because they are more likely to succeed. It should now be both faster and easier to form and agree proposals as the standard terms are pre-written. These protocols represent many thousands of hours of work and close collaboration with all key stakeholders. I am confident, as has been the experience in other countries, that these new protocols will result in raising the acceptance rates still further.

The new debt solutions, which offer alternatives to bankruptcy, are not just positive for debtors but are also in the best interests of creditors. There is nothing in the personal insolvency legislation that creates bad debts but the legislation does help to solve them. Ultimately, it is in all of our interests to return an insolvent debtor to solvency, to ensure their wellbeing and participation in normal economic activity and to give them the second chance that they deserve and need.

I do not accept the argument that there can be no writedown of mortgage debt. Sometimes that will be the correct thing to do, not only in order to keep a family in its home but also because it makes financial sense to the creditor. I equally do not accept the argument that if you allow one person a writedown when it is genuinely needed, then everyone else will demand one, including those who have at all times been paying their mortgages. People, in my experience and in the survey work we commissioned, want to pay their debts. Those who can pay them will pay them and there are a number of safeguards built into our legislation to ensure this is the case. I also believe that no reasonable person will resent seeing someone who has fallen on hard times benefit from proportionate debt forgiveness. The ISI has helped almost 2,000 debtors to date. We need to and want to help more. I believe the recent announcement made by the Government will help us do just that.

I will now pass to the official assignee, Mr. Chris Lehane, to make some comments on the current review of the bankruptcy term.