Stephen Donnelly (Wicklow, Independent)
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34. To ask the Minister for Finance if his attention has been drawn to the research from a personal insolvency practitioner (details supplied) that shows that more than seven banks lost €5 million by vetoing insolvency deals; his views that banks are prepared to cost themselves millions of euro to PIAs. [37069/14]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the Personal Insolvency Act 2012 was a complex piece of legislation that significantly modernised Ireland's insolvency regime.  However, as with any such major reform, I have been advised that the Department of Justice and Equality will keep the effectiveness of the legislation under review to ensure that it achieves the objective of providing an efficient way of resolving unsustainable personal debt positions in a way that is as fair as possible for both debtors and creditors.  Indeed, there have already been some amendments to the legislation during 2013 which were of a minor nature and primarily operationally focussed.

The recent Insolvency Service of Ireland (ISI) Quarterly Statistics were published in July (). In summary, during Quarter 2, 67 Debt Relief Notices (DRN), 30 Debt Settlement Arrangements (DSA), and 27 Personal Insolvency Arrangements (PIA) were approved. The statistical report shows that three out of every four proposals for arrangements (for both DSAs and PIAs) result in acceptances. 

In addition, there were 98 bankruptcy adjudications in the second quarter of 2014 following the reduction in the duration of bankruptcy to three years.  In the year to the end of the second quarter there has been 164 bankruptcy adjudications compared to 58 in the whole of 2013.  The Deputy will also be aware that at his appearance before the Oireachtas Committee on Finance, Public Expenditure and Reform, the Director of the Insolvency Service of Ireland said that monitoring creditor engagement will be a key focus of the ISI.

The ISI established a Debt Solutions Protocol Steering Group earlier this year to develop Protocols for both the Debt Settlement Arrangement (DSA) and Personal Insolvency Arrangement (PIA). These Protocols can be used by personal insolvency practitioners when making straightforward proposals to creditors for either a DSA or PIA.  The DSA protocol was finalised in July 2014 and can be accessed at the following link - .  The development of a protocol is in line with best practice in other jurisdictions and does not require amendments to existing legislation.  A similar protocol was developed in the UK for their Individual Voluntary Arrangement (IVA) which is comparable to the Debt Settlement Arrangement here in Ireland.  The UK protocol, once it was agreed and adopted apparently resulted in significant acceptance rates by creditors there - exceeding 90%.  Work began on a PIA protocol in August with a target date for completion of the end of the year. 

While the initial take up of insolvency solutions has been low, the fact that the ISI is now in place has acted as a catalyst to encourage debtors and creditors to reach bilateral deals to address their insolvency.  In the absence of bilateral agreements, the new statutory frameworks are a mechanism requiring all relevant creditors to engage with and respond to an insolvency arrangement proposed by a debtor.  Of course both debtors and creditors have rights in a financial contract and these must be respected, but in the event that either a DSA or PIA cannot be agreed, the ultimate resolution option is judicial bankruptcy.