ISI today produced statistics for their first quarter activity and they can be describes as nothing short of a disaster not only for the ISI itself but for the thousands of people hoping that the service was going to be the answer to their half a arcade old debt problems.
The problems that have beset the insolvency system and the ISI have been flagged by me for some time now. These statistics show only 3 deals done involving a mortgage write down and average write down of just 14% was achieved.
Currently the greatest issues with the processes are:
· The veto held by the banks over arrangements
· The length of the PIA and DSA
· The interference by the ISI in the bankruptcy process with the necessity to now have a PIP involved in the process (contrary to the Act)
· The 3 year bankruptcy term
It is now time that the Minister for Justice to review the legalisation, as he promised at the launch of the ISI in March 2013 if it was found that the system was not working which is clearly the case.
The following changes need to be made urgently:
· The insolvency processes should be immediately reformed to include:
· The reduction of the application fees for PIAs and DSAs to NIL
· The removal of the creditor veto on agreements
· The agreements should be limited to 3 years and the claw back for windfall gains removed
· Bankruptcy court fees reduced and the suspension for he need to sign off on a bankruptcy application (cost of such a letter are now running at €1,000)
· Bankruptcy term should be reduced to 1 year as in the UK.
These changes will ensure at all who wish to avail of the processes will be able to do so without being restricted by the costs and the draconian length of the processes.
The changes will also ensure that the problems with people not having access to the very remedies they desperately need and have been waiting for over 6 years will be addressed. By doing so the recovery needed for ordinary people will finally happen.
Paul C Carroll Accountant
NEO Financial Solutions