As the panic of the New Insolvency Act sets in the Panel of Mediators are ready to help as the new ISI, the Insolvency Service of Ireland, gets ready to launch its service and start to take applications from Personal Insolvency Practitioners (PIP’s).
It is predicted that the ISI will be swamped with enquiries from members of the public looking to write off debt under the new schemes and will find it challenging to cope with the volume of calls they will receive over the next few months.
Personal Insolvency Practitioners act on behalf of the individual seeking to apply for a personal arrangement from the ISI.
The Panel of Mediators, made up of over 40 trained and specialised mediators, will be offering some of their services free of charge wherever possible in an effort to help with the difficulties of people in distress and needing assistance.
While solicitors and accountants are the ideal candidates to become PIP’s, Brian Walker, a practicing Barrister and Mediator with The Panel of Mediators, “sees little appetite from accountants and solicitors to become PIP’s. The legislation is unclear as to how they will be paid, cases will take months to progress and the failure rate will be high.”
The purpose of the Personal Insolvency Act was to offer an alternative to bankruptcy but it is inevitable that this new legislation will lead to a very significant increase in debtors being declared bankrupt here. Last year there were over 30 and the official estimates are for over 3,000 in the first year. The latest Stubbs Gazette Red C Poll, published earlier this month came out with a figure closer to 6,900 and they say over 25,000 people will apply for the new personal insolvency arrangements.
Mr. Walker fears the “the system will come to a complete halt if there are insufficient PIP’s to service the demand. PIP’s are essential to process. The applications will require careful consideration by financial and legal advisers and the consequences of getting it wrong will be very significant”.
Personal insolvency law is about rescue. The criteria to qualify for rescue are high. It seems inevitable that there will be a high failure rate. This may mean bankruptcy and that inevitable meeting with the Bankruptcy Inspector who calls out to carry out a full inventory at the family home and the vesting of all the bankrupt’s property in the name of the Official Assignee in Bankruptcy.
The Panel of Mediators will work hard to ensure that this is not the case.