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Section 141 Consultation Tackling Problem Debt, Together

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Section 141 Consultation Tackling Problem Debt, Together Section 141 Consultation ISI Submission to the Department of Justice and Equality June 2017 ISI Tackling problem debt, together This page is left intentionally blank Insolvency Service of Ireland – Section 141 Submission – June 2017 Page 2 Insolvency Service of Ireland Submission to the Department of Justice and Equality in response to the consultation arising from Section 141 of the Personal Insolvency Act Table of Contents 1 Executive Summary ................................................................................................. 9 2 Introduction........................................................................................................... 13 2.1 Terms of Reference for the Review ........................................................................... 13 2.2 Approach to the submission ..................................................................................... 13 2.3 Overview of the submission ...................................................................................... 13 2.4 Contents of the submission ....................................................................................... 14 3 The Debt Landscape and International Comparisons ........................................... 17 3.1 Introduction .............................................................................................................. 17 3.2 The Debt Landscape 2012 to the Present ................................................................. 17 3.2.1 Central Bank Data .......................................................................................................... 17 3.2.2 European Central Bank .................................................................................................. 19 3.2.3 ISI Data .......................................................................................................................... 19 3.3 International Comparison – Take up of Insolvency Solutions ................................... 20 3.4 Conclusion ................................................................................................................. 22 4 ISI to approve DRNs, PCs, PC Extensions, DSAs, PIAs and Variations ................... 25 4.1 Introduction .............................................................................................................. 25 4.2 Constitutional Property Rights and the Administration of Justice ............................ 26 4.2.1 Property Rights .............................................................................................................. 26 4.2.2 Administration of Justice by Body other than the Courts ............................................. 27 4.3 Noteworthy features of the DRN, PC, DSA and PIA .................................................. 29 4.4 Conclusion ................................................................................................................. 32 5 Additional DRN Enhancements ............................................................................. 33 5.1 Introduction .............................................................................................................. 33 5.2 Recommended DRN Improvements ......................................................................... 34 5.2.1 Term of supervision ....................................................................................................... 34 5.2.2 Asset Threshold ............................................................................................................. 35 5.2.3 Additional income ......................................................................................................... 35 5.2.4 Eligibility criteria relating to undervalue and preference ............................................. 35 5.2.5 Power to amend DRNs .................................................................................................. 36 Insolvency Service of Ireland – Section 141 Submission – June 2017 Page 3 5.2.6 Distributions to DRN creditors ...................................................................................... 36 5.2.7 Removal of “excludable creditor” category .................................................................. 36 5.2.8 ISI ability to seek Court direction .................................................................................. 36 5.3 Conclusion ................................................................................................................. 37 6 Additional PC, DSA and PIA Enhancements .......................................................... 39 6.1 Introduction .............................................................................................................. 39 6.2 DSA ............................................................................................................................ 39 6.3 PIA ............................................................................................................................. 40 6.4 Recommended Arrangement Improvements ........................................................... 41 6.4.1 Generic PC ..................................................................................................................... 42 6.4.2 Extension of PC .............................................................................................................. 42 6.4.3 Minor operational changes to the PC process .............................................................. 42 6.4.4 Interlocking/Joint Applications ..................................................................................... 42 6.4.5 PIP delegation ............................................................................................................... 43 6.4.6 Creditor meeting adjournments ................................................................................... 43 6.4.7 Application to the appropriate court for directions ...................................................... 43 6.4.8 Section 115A Reviews ................................................................................................... 43 6.4.9 Removal of certain ‘gateway provisions’ ...................................................................... 44 6.4.10 Removal of ‘excludable creditor’ category.................................................................... 45 6.4.11 Other ............................................................................................................................. 45 6.5 Conclusion ................................................................................................................. 45 7 Creditor and Debtor Engagement ......................................................................... 47 7.1 Creditor and Debtor Engagement - Introduction ...................................................... 47 7.2 Creditor/PIP engagement.......................................................................................... 47 7.3 Debtor Engagement - Introduction ........................................................................... 48 7.4 Psychology of debt .................................................................................................... 48 7.5 Awareness campaigns ............................................................................................... 49 7.6 Conclusion ................................................................................................................. 50 8 Supplementary Issues ........................................................................................... 51 8.1 Introduction .............................................................................................................. 51 8.2 Abhaile Service .......................................................................................................... 51 8.3 Small and Medium Entrepreneurs ............................................................................ 52 8.4 EU Developments ...................................................................................................... 52 8.5 Conclusion ................................................................................................................. 53 Insolvency Service of Ireland – Section 141 Submission – June 2017 Page 4 Appendix 1 - Terms of the Department’s Consultation ............................................... 55 Appendix 2 - The ISI Functions, Mission and Strategic Direction ................................. 57 A2.1 ISI Mission Statement .................................................................................................... 57 A2.2 ISI Strategic Goals .......................................................................................................... 57 A2.3 ISI Functions .................................................................................................................. 57 Appendix 3 – Statistical Information ............................................................................ 59 A3.1 ISI Yearly Statistics: Applications, PCs issued and Arrangements Approved ................ 60 A3.2 DRN, DSA and PIA Debt Profile 2014 - 2016 .................................................................. 61 A3.3 DRN Debtor Profile 2014 - 2016 .................................................................................... 63 A3.4 DSA Debtor Profile 2014 - 2016 .................................................................................... 64 A3.5 PIA Debtor Profile 2014 - 2016 .....................................................................................
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