Pearse Doherty (Donegal, Sinn Fein)
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737. To ask the Tánaiste and Minister for Justice and Equality the controls in place to ensure a personal insolvency practitioner in receipt of a voucher under the abhaile scheme considers all options for a person; and if he will make a statement on the matter. [27061/17]

Pearse Doherty (Donegal, Sinn Fein)
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738. To ask the Tánaiste and Minister for Justice and Equality the number of times a personal insolvency practitioner in receipt of a voucher under the abhaile scheme has suggested personal insolvency as the next step for a person; if he will provide this number as a percentage of the number of recommendations from PIPS under the scheme; and if he will make a statement on the matter. [27062/17]

Charles Flanagan (Laois, Fine Gael)
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I propose to take Questions Nos. 737 and 738 together.

Based on that analysis, the PIP must then have regard to all the matters listed in detail in section 52(3) of the Acts, and must advise the borrower on all the options and issues listed in detail in section 52(1) and 52(2). These options expressly include, but are not restricted to, a Personal Insolvency Arrangement (PIA), a Debt Settlement Arrangement, informal negotiation with creditors to vary the terms of the debt, and bankruptcy. The PIP is also required, both under s. 52(4) and under AbA Personal Insolvency Practitioner (PIP), who is advising an insolvent homeowner at risk of losing their home due to mortgage arrears under the Abhaile service, is legally required to advise the borrower of all options available to him or her to address their financial difficulties. The advice must be based on a detailed analysis of their individual financial circumstances, and of the effect of each available option. The statutory obligations are set out in considerable detail in sections 50 and 52 of the Personal Insolvency Acts 2012-2015. PIPs are trained, regulated and supervised by the Insolvency Service of Ireland regarding compliance with their statutory professional obligations.

The borrower contacts the Money Advice and Budgeting Service (MABS) – either directly or through a PIP - to obtain a financial advice voucher under Abhaile. The borrower then has a preliminary consultation with the PIP, who will assess the borrower’s suitability for the range of mortgage resolutions. The PIP will ask the borrower to provide full information (mortgage statements, bank statements, credit card statements, pay slips or self-employed accounts, etc.) from which the PIP can prepare a Prescribed Financial Statement (PFS). The PFS is a full analysis of the borrower’s individual financial situation, following the detailed requirements set out in s. 50 of the Personal Insolvency Acts.

Abhaile confirms advices in writing to the borrower – this enables the latter to consider fully the different options.

The advices provided by PIPs are tracked and monitored under Abhaile. Of borrowers referred to PIPs for financial advice and assistance under Abhaile in the period 22 July 2016 to end of Q1/2017, after financial analysis and advice the best option recommended was as follows:

- a Protective Certificate (the first step in applying for a Personal Insolvency Arrangement): 55%

- informal restructure with lender or other alternative solution: 38%

- bankruptcy (in such case the PIP will provide, as part of the Abhaile service, the certificate required by the bankruptcy judge): 6%

- other referral back to MABS: 1%.

If the PIP advises that the borrower’s individual situation cannot be resolved with his or her assistance – whether by means of a Personal Insolvency Arrangement or otherwise - he or she may refer the borrower back under Abhaile to a Dedicated Mortgage Arrears adviser with MABS, who can explore and assist with alternative options. In such case, the PIP provides the MABS financial adviser with the PFS and written advice that he or she has already prepared.

The outcomes of PIP advice are also tracked under Abhaile, but they can take some further weeks to complete. If the PIP forms the view, based on the PFS, that the borrower is a suitable candidate for a PIA, then the PIP will (if so instructed by the borrower) apply for a Protective Certificate, which usually lasts 70 days. During this 70-day period, the PIP will endeavour to put in place a PIA that has sufficient creditor support to enable the Courts to approve it. Should the creditors refuse a PIA proposal which the PIP considers is overall fair and reasonable to all parties, Abhaile can also provide legal aid for the borrower to seek independent review by the Courts of the refusal, under s. 115A of the Personal Insolvency Acts.

The outcomes (as of May 2017) of cases where PIPs advised borrowers under Abhaile between 22 July and 30 September 2016 and where the PIP recommended seeking a Protective Certificate, are as follows:

- Personal Insolvency Arrangement now in place for borrower: 19%

- Protective Certificate in force for borrower: 47% (where the 70-day period has expired, this indicates that it has been extended for a limited period by the Court based on ongoing work by the PIP)

- Preparation of Protective Certificate by PIP: 18%

- Application for Protective Certificate not made or withdrawn - total 16% (this may arise if the borrower does not wish to proceed as advised by the PIP, who cannot make the application unless expressly so instructed by the borrower).

PIPs are paid on a quarterly basis in arrears for provision of services under Abhaile financial advice vouchers, subject to compliance with the above requirements. For example, PIPs submitted claims in October 2016 for services provided in Quarter 3/2016, and were paid for duly vouched claims in November 2016. It should be noted that the full process - from voucher issue, to provision of voucher services, to issue of a Protective Certificate (PC) under sections 93-98 of the Personal Insolvency Acts, to conclusion of a PIA with creditors - may take some time. A PIP may have recommended in Quarter 3/ 2016 that a borrower apply for a Protective Certificate, but it may take until Quarter 2/ 2017 or later before it is possible to say whether that Protective Certificate led to a PIA for that borrower. During this time, the borrower can remain protected against enforcement by the mortgage lender, either by a statutory adjournment of repossession proceedings or by the Protective Certificate itself.

The following Table sets out the percentage of total recommendations for Protective Certificates under the Scheme during the Quarters mentioned.