Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

453. To ask the Tánaiste and Minister for Justice and Equality further to section 115A of the Personal Insolvency Act 2012 and section 21 of the Personal Insolvency (Amendment) Act 2015, the number of appeals to the court regarding the rejection of an insolvency proposal by a creditor submitted to date in 2017; the details of the outcome in each; and if he will make a statement on the matter. [35130/17]

Charles Flanagan (Laois, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Insolvency Service of Ireland (ISI) has confirmed that as of 14 July 2017, 463 review applications under s.115A of the Personal Insolvency Acts have been notified to the ISI. 448 of these were initiated in the Circuit Court, and 15 were initiated in the High Court.

A breakdown of the 463 applications is as follows:

- 254 are currently being administered by the Courts Service (there has been an initial hearing but new affidavits or additional material have been requested so there is an adjournment to allow for filing of same in advance of a full hearing).

- 54 cases are awaiting an initial court hearing.

- 43 have been approved.

- 91 have been rejected (it should be noted however that in 43 of these, the application was rejected by consent of both parties: this outcome often results from settlement negotiations between the parties where an alternative solution agreed by the debtor is put in place).

- 21 have been withdrawn or struck out by the debtor (again, it should be noted that these outcomes may often result from successful settlement negotiations between the parties).

There have also been 24 appeals to the High Court from decisions made by the Circuit Court under s.115A. 21 decisions have been appealed by the debtor and 3 appealed by the creditor.

Of the debtor appellants:

- 2 appeals have been approved.

- 9 have been rejected (2 were on joint debtor/creditor consent).

- 3 have been withdrawn or struck out.

As noted earlier, the latter outcomes may often result from successful settlement negotiations between the parties.

- 7 have yet to be heard.

Of the creditor appellants:

- 2 appeals have been approved.

- 1 has yet to be heard.

The early decisions referred to above, particularly from the High Court on appeal, have also clarified a number of important issues - both procedural and substantive - regarding the legal position of debtors and creditors regarding mortgage arrears on a home.

For example, two High Court judgments on appeal, delivered on 21 February 2017 and on 22 May 2017, considered important issues regarding, respectively, the need for consent to a personal insolvency arrangement from an ex-spouse who is a co-owner and co-mortgagor of the home but is not contributing to the mortgage, and the court’s assessment of the reasonableness of proposals made under the Personal Insolvency Acts, including a proposal for so-called ‘warehousing’.

I am very pleased to see that the conduct of these critical s.115A review processes through the courts has now become a fully operational feature within the personal insolvency arrangement process, and that it is working in line with what was intended when these important legislative changes were made in 2015.

At the end of the day, Government policy in this area is about attempting to ensure that maximum use is made of the critical PIA option and, ultimately, about keeping people in their homes where at all possible. It is evident, from the jurisprudence developing on the application of s.115A, that a number of people are now in PIA arrangements which would formally have been subject to final rejection by the creditors.

The jurisprudence in this area also has a wider importance, as it clarifies the range of statutory solutions available to borrowers in mortgage arrears on their home, significantly developing the legal framework within which both informal solutions, and statutory solutions, are worked out and negotiated in the future.