Personal insolvency guidelines
The Government has launched the personal insolvency service this afternoon, which will see new arrangements for overburdened borrowers to reach agreement with their creditors.
A website and phone number for debtors will also become operational today. The address for the new service is http://www.isi.gov.ie and the organisation's number is 076 106 4200.
In the coming weeks personal insolvency practitioners will be licenced. These will effectively negotiate deals between lenders and borrowers.
The guidelines include indicators of the amount families will be allowed to live on once they enter into state-approved Personal Insolvency deals.
The Minister for Justice, Equality and Defence, Alan Shatter and Lorcan O'Connor, Director of the Insolvency Service of Ireland, today announced details of three different debt solutions available to those struggling with personal debt.
They also released details of the Guide to a Reasonable Standard of Living and Reasonable Living Expenses, and information on Regulations for Practitioners.
The three different debt solutions will depend on the amount of debt involved, individual circumstances, whether there is a mortgage, and whether the debt is secured or unsecured.
The Debt Relief Notice (DRN) is for debts up to €20,000; the Debt Settlement Arrangement (DSA) is for unsecured debts of no limit; and the Personal Insolvency Arrangement (PIA) is for unsecured and secured debt.
The Insolvency Service will be in a position to begin accepting applications at the end of June.
''The three new debt solutions available provide certainty for those crippled with unsustainable debt and will help restore people who are insolvent to solvency in a fair, transparent and equitable way,'' commented Minister Shatter.
"Our objective is to help restore people who are insolvent to solvency in a fair, transparent and equitable way,'' commented Lorcan O'Connor.
Referring to the Guide to a Reasonable Standard of Living and Reasonable Living Expenses, Mr O'Connor said the guidelines were not designed for the micro-management of people's expenditure or lifestyle by either the Insolvency Service or by creditors.
"A reasonable standard of living does not mean that a person should live at a luxury level" Mr. O'Connor said. "But nor does it mean that people should be punished and live only at a subsistence level. These guidelines are meant to be flexible. They are a baseline for negotiations and discussions. Our objective is to help people in genuine distress, and to allow them their dignity as they work their way out from under their financial burdens."
Mr O'Connor urged insolvent debtors intending to apply for insolvency arrangements to continue to work with their creditors.
He also urged creditors to address any operational challenges they may face in implementing the new solutions.