Insolvency Service of Ireland
The Insolvency Service of Ireland (ISI) was set up under the Personal Insolvency Act 2012, which introduced 3 new debt settlement procedures and reduced the term of bankruptcy from 12 years to 3 years (now 1 year). The Act has been amended several times and the Law Reform Commission has prepared a consolidated version (pdf).
The ISI is responsible for all matters concerning personal insolvency.
Its role includes:
- Administering the debt settlement procedures introduced by the Act
- Authorising Approved Intermediaries (AIs)
- Authorising and regulating Personal Insolvency Practitioners (PIPs)
- Developing guidelines
- Providing information
- Arranging for provision of education and training
- Monitoring the operation of the debt settlement procedures
- Contributing to policy development
Measures to support people in mortgage arrears
A series of measures announced on 13 May 2015 included changes to the personal insolvency system. All of these changes are now in effect. They include court review where a mortgage lender rejects the borrower’s personal insolvency proposal.
As part of Abhaile, the national Mortgage Arrears Resolution Service, an aid and advice scheme for people in serious mortgage arrears covers free legal representation for eligible borrowers in seeking such a court review.
The ISI is centrally involved in this scheme and maintains a panel of Personal Insolvency Practitioners (pdf) to offer free advice and help under it. Read more on the ISI's website, including FAQs (pdf) on the scheme.
Debt settlement procedures
The ISI has a central role in administering the 3 debt resolution mechanisms introduced by the Act - Debt Relief Notices (DRNs), Debt Settlement Arrangements (DSAs) and Personal Insolvency Arrangements (PIAs), and in monitoring their operation. It also plays a key role in administering bankruptcy procedures.
Statistics on the operation of all the above processes are published on the ISI’s website.
Debt Relief Notices (DRNs)
The ISI is more directly involved with the implementation of DRNs than with DSAs or PIAs.
When a debtor and their Approved Intermediary (AI) have both signed off on a DRN application, it is transmitted to the ISI for checking and verification. The ISI can then request further information from the AI and can also enquire into the debtor’s bank accounts and into any other matter that it considers relevant in verifying the application. It can request information about the debtor’s financial circumstances from Government departments, the Revenue Commissioners and other State bodies.
When the ISI is satisfied that the application is in order, it issues a certificate to that effect and notifies the Circuit Court. If the court is also satisfied, it issues a Debt Relief Notice and notifies the Insolvency Service. The ISI then notifies the AI, the debtor and the relevant creditor(s).
When the DRN has been issued, the ISI publishes its details on the Register of Debt Relief Notices, which is accessible to the public. It then takes responsibility for the administration of the DRN for a 3-year supervision period. This can include handling any payments that the debtor is able to make; investigating any matters it considers relevant to the DRN; applying to the Circuit Court for variation or termination of the DRN; registering any amendments; and registering termination of the DRN.
When the DRN is terminated, the ISI removes all the information about it from the Register and issues a Debt Relief Certificate to the debtor, confirming that they have been discharged from the relevant debts. It also writes to all the creditors concerned, to tell them that the Debt Relief Notice has been removed from the Register.
Debt Settlement Arrangements (DSAs) and Personal Insolvency Arrangements (PIAs)
The ISI checks and verifies applications for protective certificates. (A protective certificate is a preliminary to a DSA or a PIA. While it is in force, it protects the debtor from the initiation or continuation of certain enforcement proceedings or other actions.) When satisfied with the application, the ISI transmits it to the Circuit Court. The Court reviews the application and, if satisfied, issues a protective certificate.
When the Court issues a protective certificate, the ISI registers it and notifies the debtor's Personal Insolvency Practitioner (PIP) - the professional who is approved and registered by the ISI to operate DSAs and PIAs. The PIP notifies the debtor and creditors concerned. The PIP then works with the debtor to prepare a proposal to creditors. If this proposal is accepted, the PIP notifies the ISI. The ISI notifies the Court. If the Court approves the DSA or PIA, the ISI then registers it.
After this, the PIP handles the day-to-day administration of the DSA or PIA. The ISI’s role only involves registering any variations in the agreement, its failure or its successful completion.
As noted above, the ISI plays a key role in the administration of bankruptcy. The procedure is outlined in the Debtor's Guide to Bankruptcy (pdf) published by the ISI.
The following table lists some of the key actions under the arrangements introduced by the Personal Insolvency Act and which body or individual is responsible for each.
|Who performs the action for each procedure?|
|Prepare application/proposal with debtor||Approved Intermediary (AI)||Personal Insolvency Practitioner (PIP)||Personal Insolvency Practitioner (PIP)|
|Verify application||Insolvency Service of Ireland (ISI)||ISI||ISI|
|Register protective certificate after Court approval||n/a||ISI||ISI|
|Issue DRN||Specialist judges of the Circuit Court||n/a||n/a|
|Review DSA/PIA proposal and approve or reject: if total liabilities are not over €2,500,000||n/a||Specialist judges of the Circuit Court||Specialist judges of the Circuit Court|
|Review DSA/PIA proposal and approve or reject: if total liabilities are over €2,500,000||n/a||High Court||High Court|
|Administer terms of DRN/DSA/PIA when in effect||ISI||Personal Insolvency Practitioner (PIP)||Personal Insolvency Practitioner (PIP)|
|Monitor operation of DRN/DSA/PIA||ISI||Personal Insolvency Practitioner (PIP)||Personal Insolvency Practitioner (PIP)|
The system is automated as far as possible and is closely linked with the Courts Service.
Development and support activities
Authorising Approved Intermediaries (AIs)
An Approved Intermediary (AI) is a person or class of persons authorised by the ISI to support a debtor to make an application for a Debt Relief Notice. All Money Advice and Budgeting Services (MABS) have been authorised as AIs. – see Where to apply below.
Authorising and regulating Personal Insolvency Practitioners (PIPs)
The Insolvency Service authorises and regulates Personal Insolvency Practitioners (PIPs) who are responsible for helping people to apply for protective certificates and prepare proposals for a DSA or PIA. PIPs are also responsible for calling creditors’ meetings and for administering the payments and other arrangements agreed to as part of the DSA or PIA.
The ISI’s role includes:
- Setting qualifying criteria for PIPs
- Reviewing and deciding on applications from people wishing to practise
- Issuing authorisations and registering PIPs
- Inspecting individual PIPs
- Investigating complaints
- Reviewing authorisations
The ISI has made Regulations to govern various matters concerning PIPs and has published the details of the PIPs who have been authorised.
A key criterion for getting a DRN is that the person has been left with no more than €60 net disposable income per month after reasonable living expenses.
The ISI has prepared detailed guidelines on what constitutes reasonable living expenses, as required under the Personal Insolvency Act. The Act requires the guidelines to be reviewed regularly.
When preparing the guidelines on reasonable living expenses, the Act requires the ISI to consult widely and to have regard to:
- Measures and indicators of poverty set out in Government policy publications on poverty and social inclusion
- Official statistics and surveys published by the Central Statistics Office, relating to household income and expenditure
- The Consumer Price Index or similar indices
- Differences in the size and composition of households, and the differing needs of people, having regard to age, health and whether they have a physical, sensory, mental health or intellectual disability
- The need to facilitate the social inclusion of debtors and their dependants, and their active participation in economic activity
- Whatever other information the ISI considers appropriate
The ISI's Debt Solutions Protocol Steering Group has developed protocols for use by PIPs when making straightforward proposals to creditors for either a DSA or PIA. These protocols are on the ISI's website, along with background information and FAQs.
Further elements of role
The ISI provides 2 information websites and an information telephone line – see 'Where to apply' below. It has published detailed information about the 4 debt solutions. This detailed information includes sample scenarios for each solution. In addition, it may arrange for the provision of education and training to AIs, PIPs and others to whom it would be relevant in due course.
The ISI is also required to monitor the operation of the procedures introduced by the Personal Insolvency Act; to participate in reviewing the legislation; to advise the Minister and to contribute to the development of public policy on personal insolvency, at both national and EU level.
Where to apply
Your application for a Debt Settlement Arrangement or Personal Insolvency Arrangement must be made through a Personal Insolvency Practitioner (PIP). You can choose a PIP from the Register that is published by the ISI.
Your application for a Debt Relief Notice must be made through an Approved Intermediary (AI). You can choose an AI from the Register of Approved Intermediaries that is published by the ISI. All Money Advice and Budgeting Services (MABS) have been authorised as AIs. The MABS Helpline provides an initial checking service to check if you satisfy the eligibility criteria for a DRN. The MABS Helpline is at 0761 07 2000, Monday to Friday from 9 am to 8 pm.
Read more on mabs.ie.
Further information is available from the ISI’s helpline 0761 06 4200 (Monday to Friday, 9 am to 6 pm) and from its main website isi.gov.ie, as well as its website backontrack.ie for people who are struggling with debt.