P r e sonal Insolv enc onal Insolv y & De enc bt Solutions y & De in Ireland 2013

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1 Personal Insolvency & Debt Solutions Personal Insolvency & Debt Solutions in Ireland 2013

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3 Consumer Debt Crisis? Irish the most Indebted consumers in Europe: Mortgage Debt Personal Debt 147bn 30bn Mortgages in arrears 146,000 1/5 Mortgages in arrears over 90 days (11.3%)(BTL 17.9%), 2/3 rds in Negative equity. Credit Card Debt, Credit Union Debt???etc etc

4 UK Debt Stats Individual Insolvencies in Q This equates to one person every 5 minutes. Property repossessed every 16 mins million debt written off by banks every day. 2.5% arrears rate Over 90 days.

5 Consumer Debt Crisis? Declining Household income Unemployment Negative Equity Debt funding % of household income Business failure

6 Social/Psycological factors of consumer Indebtedness We can no longer borrow our way out of Debt, we must budget our way out of debt.

7 Factors in Financial Stress Fear of not paying bills Demand to Pay Frustration at situation Can t handle uncertainty Loss of confidence Lack of concentration Feelings of unworthiness Collapse in self belief Poor decision making Loneliness Grief for old lifestyle

8 Main Causes of Debt Living beyond means Reduction in household income Relationship breakdown Poor money management Illness Loss of employment Business failure No savings Poor family communication No bonus Credit card overuse source: Google 2008; Insolvency Service 2007; Bankrate.com 2008

9 Political/Bank Response CCMA 2011 M.A.R.P Keane Report Mortgage vs Unsecured: IBF Protocol 2013 Personal Insolvency Legislation 2012

10 Banks Response Secured M.A.R.P Banks willing to Negotiation on PDH and RIPS. RIPS - only where there is difficulty on cashflow. Understand that short term solutions are necessary. New Central Bank SFS Will not facilitate lifestyle credit.

11 Personal Insolvency Bill 2012 Non Judicial i solutions: Debt Relief Certificate Up to 20k Debt Settlement Arrangement Unsecured above 20k Personal Insolvency Arrangement Secured up to 3Million and Unsecured over 20k. Bankruptcy

12 Personal Insolvency Insolvency is not an easy get out of debt. They are an alternative to Bankruptcy and should only ever be considered d in this light.

13 Debt Relief Certificate Unsecured debts < 20,000 Disposable income of < 60 pm, no assets over 400, except car year supervision i After 3 years debts written off

14 Debt Settlement arrangement Unsecured debts > 20,000 Apply for protective Cert Prevents creditors taking action. Creditors will be offered a % of debt over 5 year period. 65% of creditors must agree Debts discharged after 5 years Only 1 DSA allowed in your lifetime.

15 Personal Insolvency Arrangement Secured and unsecured debts 20k - 3million. Insolvent Unsecured debts paid back over 6 years. Deal agreed on PPR BTL sold or deal agreed. 50% secured and unsecured value, one creditors with 65% value could veto. One PIA in your lifetime.

16 Example of PIA Debt Payment/Loss Comment Unsecured (30000) 60% spread over 6 yrs PPR (50000) 16.7 %Term extended d by 5 years BTL Sale (60,000) 24% Pays 40k towards 100k shortfall.

17 Personal Insolvency Practitioner Appointed by The Insolvency Board. Indemnity bond of 600, Professional Indemnity Supervision system No fee structure established yet. Estimated over period DSA k. PIA K.

18 Checklist Personal Insolvency VS Bankruptcy Advantages: The amount is based on what you can afford. You can keep your home Creditors bound by agreement Debts written off at the end of term Job won t be affected. Fewer credit restrictions than Bankruptcy.

19 Checklist Disadvantages: Monthly payments for the full term If you do not keep up payments creditors may make you bankrupt. Veto option for creditors. You may have to hand over savings. Any income increase will have to be declared. Public record You will not get more credit.

20 Informal Arrangements Debt Management Plans Job Issue Cost Issue Same result??? IBF Protocol- will it work?

21 Questions Call Eugene on Or mail i