MONEY MENTOR ‘I simply cannot pay my debts’ cipal Private Residence (PPR) LVH[FOXGHGIURPWKHWKUHHQHZ arrangements,” says Brian. There MONEY is a recognition that the family home should not normally be considered part of the settle- MENTOR PHQWSURFHVVDVWKLVZRXOGFDXVH a great deal of disruption for families. The PPR may form part of [email protected] DQDUUDQJHPHQWKRZHYHULIWKH individual agrees to the disposal ear Money Mentor, RULIWKH3,3LVRIWKHYLHZWKDWLWLV I read about the inappropriate having considered story of the farmer the individual’s circumstances. who won’t pay his The individual must get indepen- contractor. dent legal advice in this situation. DI am in the same situation and In brief it is not that I wouldn’t pay – I STRONG UPTAKE simply can’t pay. I was over ex- v Personal Insolvency Act 2012 has k:HDW+XJKHV%ODNHH[SHFWWKH posed to a downturn in property brought in new debt resolution struc- XSWDNHRQWKHQHZPHFKDQLVPV as well as the general economy. tures. ZLOOEHVWURQJDQGPDQ\RYHU I know I made bad decisions but v Debt Relief Notice (DRN) and the indebted individuals have already there is no point in getting an Debt Settlement Arrangement (DSA), EHHQLQWRXFKZLWKXVDERXWSODQ installment order or a garnishee relate to unsecured debt such as ning to engage in a PIA. Minister order on my single farm pay- credit card debt. for Justice Alan Shatter has tenta- ment. The banks already have v Personal Insolvency Arrangement WLYHO\HVWLPDWHGWKDWWKHUHZLOOEH oUVWFDOORQWKDW (PIA) covers both unsecured and DSSOLFDWLRQVLQWKHoUVW I have done a deal with my secured debt, which is debt backed by months for PIAs and DSAs. lenders but it is only short term collateral such as a mortgage. +RZHYHUDUHFHQW5HG6HD interest-only arrangement that v Applications for a PIA must be made Stubbs Gazette opinion poll said did not address the fundamental through a Personal Insolvency Prac- the Minister’s estimate is conser- problem. I have heard about new titioner (PIP), a professional who will vative and there could be as many legislation being talked about have been approved and registered by DVDSSOLFDWLRQVLQWKHoUVW DQGZRQGHUHGZRXOGLWEHQHoW the Insolvency Service of Ireland. year. me? k:LWKQHZRSHQLQJVSHRSOH David ZLOODOVRVWDUWGLUHFWGLVFXVVLRQV ZLWKWKHLUVHFXUHGOHQGHUVZLWK hat you are talking about the Insolvency Service of Ireland, “The creation of solutions in order to restore order to their the aim of reaching consensual is the Personal Insol- reforming the current bankruptcy RWKHUWKDQQHJRWLDWLQJZLWK\RXU SHUVRQDOoQDQFHV agreements outside of the formal W vency Act 2012. legislation and introducing three lender directly and, failing that, Brian points out that a limit of processes. Brian Nevin, director of per- QHZGHEWVHWWOHPHQWPHFKD entering bankruptcy, is the great €3 million has been introduced k7KLVVROXWLRQZLOOEHSDUWLFX sonal insolvency at accounting nisms. EHQHoWRIWKH$FWDQGVKRXOG for the secured element of an in- larly attractive for those dealing oUP+XJKHV%ODNHVD\VWKHQHZ They are Debt Relief Notice serve to reduce the enormous dividual’s debt, although this can ZLWKMXVWRQHOHQGLQJLQVWLWXWLRQ legislation opens up options for (DRN), the Debt Settlement SUHVVXUHWKDWKDVZHLJKHGRQ EHLQFUHDVHGZLWKWKHFRQVHQWRI ZKHUHWKHUHLVDVWURQJSRVVLELOLW\ people to address personal insol- Arrangement (DSA) and the WKRVHLQoQDQFLDOGLIoFXOW\XQWLO all secured creditors. The arrange- WKDWWKHEDQNZLOOFRPHWRVXFK vency issues. Personal Insolvency Arrangement QRZyVD\V%ULDQ PHQWZLOOODVWIRUXSWRVL[\HDUV DQDJUHHPHQWZLWKWKHLQVROYHQW k+RZHYHUDWSUHVHQWZHDUH (PIA), covering both unsecured k7ZRRIWKHVHWWOHPHQW ZLWKDSRVVLEOHH[WHQVLRQWRVHYHQ individual. Advice should be seeing a major shift take place in and secured debt. mechanisms, the DRN and the years. VRXJKWRQZKHWKHUDQDJUHHPHQW WKHDWWLWXGHRIWKHEDQNVWRZDUGV DSA, relate to unsecured debt In order to enter a PIA, ap- proposed by the bank is right debt resolution. This has been DEBT SETTLEMENT such as credit card debt. The third proval is needed from 65% of the for the individual and the small driven by the passing of the 7KH,QVROYHQF\6HUYLFHZLOO mechanism, PIA, is arguably the LQGLYLGXDO VFUHGLWRUVLQWRWDOZLWK print should be carefully gone Personal Insolvency Act 2012, and administer the debt-settlement centrepiece of the Act and covers the added hurdle of approval by through,” he said. also by the recently announced PHFKDQLVPVDQGZLOOPDLQWDLQD both unsecured and secured debt, 50% of secured creditors and 50% k7KHQHZOHJLVODWLRQKDV Central Bank initiative on mort- register of applicants. ZKLFKLVGHEWEDFNHGE\FROODWHUDO of unsecured creditors. The ap- RSHQHGXSDQHZODQGVFDSHIRU JDJHVDQGEX\WROHWORDQVDVZHOO Reforms to the bankruptcy such as a mortgage,” he adds. plication for a PIA must be made individuals to address personal as plans to address unsustainable legislation include automatic 7KH3,$ZLOOEHSDUWLFXODUO\ through a Personal Insolvency insolvency. Secured creditors are SME property-related loans,” discharge from bankruptcy after useful in multi-lender situations, Practitioner (PIP), a professional PRUHZLOOLQJWRGD\WRPDNHVHWWOH Brian explains. three years and petitions pre- ZKHUHDQLQGLYLGXDOOLNH\RXUVHOI ZKRZLOOKDYHEHHQDSSURYHG ments than they have been in +HVD\VWKH$FWLQFOXGHVWKUHH VHQWHGIRUEDQNUXSWF\ZLOOQRZ RZHVPRQH\WRVHYHUDOOHQGLQJLQ and registered by the Insolvency \HDUV)RUWKRVHZKRDUHLQVROYHQW YHU\ZHOFRPHFKDQJHVUHODWLQJWR not be heard until one of the three stitutions. This is the mechanism Service of Ireland. QRZLVWKHWLPHWRVHL]HWKHPR personal insolvency in Ireland. settlement mechanisms have that many professionals and busi- “Under the legislation, the ment and begin taking action,” These are: the establishment of been attempted. QHVVSHRSOHKDYHEHHQDZDLWLQJ disposal of an individual’s Prin- says Brian. CL GET TO GRIPS WITH YOUR FINANCES 7KH,ULVK)DUPHUV-RXUQDOWRJHWKHUZLWK,)$&$FFRXQWDQWVDQGWKH,)$GHYHORSHGD)LQDQFLDO3ODQQLQJERRNOHWWRJLYHIDUPHUV NEXT DEHWWHUXQGHUVWDQGLQJRIIDUPoQDQFHPDNLQJLWHDVLHUWRGLVFXVVoQDQFLDOPDWWHUVZLWKWKHLUDFFRXQWDQWDQGEDQN7KHERRN LVHGLWHGE\3HWHU<RXQJDQGDYDLODEOHRQZZZIDUPHUVMRXUQDOLHRUE\FDOOLQJ<RXFDQDOVRSRVWDFKHTXHWR WEEK Financial Planning Booklet, Irish Farmers Journal, Irish Farm Centre, Bluebell, Dublin 12. Cost, including P&P, is €10. Queries HAVE YOU A QUESTION FOR THE MONEY MENTOR? Write in total confidence to the Money Mentor, Irish Farmers Journal, Bluebell, Dublin 12 answered or send an email to [email protected]. There is always a solution. The sooner you start looking for the answer, the sooner it will be found. Peter Young is a qualified financial adviser and a member of the Insurance Institute of Ireland and LIA, the Professional Association of Financial Services 10 29 June 2013 COUNTRY LIVING.