Written answers

Wednesday, 6 April 2016

Department of Justice and Equality

Insolvency Service of Ireland Remit

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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366. To ask the Minister for Justice and Equality the measures she and the Insolvency Service of Ireland have implemented to ensure the adherence of financial institutions to the new measures contained in the Insolvency (Amendment) Bill 2015, for the protection of mortgage holders who are trying to agree revised payment structures with their lenders; and if she will make a statement on the matter. [5928/16]

Photo of Frances FitzgeraldFrances Fitzgerald (Dublin Mid West, Fine Gael)
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I assume that the Deputy's question relates to section 21 of the Personal Insolvency (Amendment) Act 2015, which inserts a new section 115A into the Personal Insolvency Act 2012. This provision introduces a new ‘court review’, where creditors such as a mortgage lender refuse an insolvent borrower’s proposal for a Personal Insolvency Arrangement to resolve debts which include the mortgage on their home. Previously, the creditors’ rejection was final. Under the new provision, the borrower can seek review by the relevant Court of the creditors’ refusal. The Court will consider the borrower’s proposal using the criteria set out in the 2015 amending legislation (Section 115A) and the Court may, if those criteria are satisfied, impose the personal insolvency arrangement proposed by the borrower.

The review provision came into effect on 20 November 2015, under S.I. no 514/2015 which I signed on 18 November.To coincide with the introduction of the new provisions, the Insolvency Service of Ireland held a number of training sessions around the country with Personal Insolvency Practitioners.

All applications for review under s. 115A are notified under the Insolvency Acts to the Insolvency Service, which will be publishing information on outcomes as part of its quarterly reports. As of 1 April 2016, 39 Circuit Court applications under s. 115A have been notified to the Insolvency Service. To date, nine of these have been determined by the Courts or settled between the parties. My officials will, of course, be carefully monitoring the operation in practice of this important reform.

I am pleased to inform the Deputy that the Court review is also being complemented by a new Scheme of access to independent legal and financial aid and advice for those in home mortgage arrears, which I announced on 22 January this year. Intensive work on implementing this Aid and Advice Scheme has been under way across Government Departments and other relevant bodies. This has been led by my Department and by the Department of Social Protection, with the participation of the Insolvency Service of Ireland, the Legal Aid Board, the Citizens’ Information Board and MABS, the Money and Budgeting Service. It builds on a network of Dedicated Mortgage Arrears Advisers established in MABS offices across the country, which was announced by the Tanaiste and Minister for Social Protection in December 2015.

MABS will act as a single Government gateway to the new Scheme, for people who are deep in debt and are at risk of losing their homes due to mortgage arrears. MABs advisers will help these borrowers, and advise them on their best options for returning to solvency and where possible for remaining in their homes. The MABS adviser will refer them, as needed, for financial advice to a Personal Insolvency Practitioner from a panel supervised by the Insolvency Service or an accountant from a panel overseen by the Department of Social Protection, and for legal aid and advice to a solicitor from a panel operated by the Legal Aid Board. The Scheme will also provide for support in Court for an insolvent borrower subject to repossession proceedings affecting their home, under a new ‘duty solicitor’ service, also operated by the Legal Aid Board. The aid and advice will be provided by the panel professional under a ‘voucher’ system, and without charge to the borrower. A key element of the Scheme is a component which provides for legal aid to an insolvent homeowner in relation to the new Court review under s.115A of the Personal Insolvency Acts. This will also be operated by the Legal Aid Board.

Work on implementation is almost complete, and I expect the Scheme to become operational in the coming weeks.

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