The Personal Insolvency (Amendment) (No. 1) Bill 2020 makes a number of important changes to the law on personal insolvency to deal with the effects of Covid-19, according to the Insolvency Service of Ireland.

The legislation will make it easier for a debtor to qualify for a Debt Relief Notice, will provide for virtual meetings between debtors and insolvency advisors, and will make it possible for people who have gone into mortgage arrears because of Covid-19 to seek a court review of their proposed arrangement if creditors vote against it.

The ISI says that it expects that other important changes to personal insolvency legislation will follow soon in a second Bill.

At present, where a debtor seeks help and obtains a protective certificate, creditors cannot contact them or pursue debts for 70 days.  The Bill provides for a court to extend that 70-day period by a further 40 days in exceptional circumstances.

It also makes it easier for a debtor to qualify for a Debt Relief Notice, under which people with few assets and little spare income can have debts up to €35,000 written off.  It will also enable a Personal Insolvency Practitioner to delegate more tasks to a member of their staff or a colleague including, for example, chairing a meeting of creditors.

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ISI director Michael McNaughton (pictured) said: “These are important and very welcome changes to our existing personal insolvency legislation in the context of the Covid-19 outbreak.  

“Prior to the Covid-19 outbreak there were many people who were struggling with unsustainable debts and the economic impact of Covid-19 has only exacerbated these issues and created new debt problems for others. I want to reassure all of these people that help is available and I encourage anyone requiring assistance to visit our website, www.backontrack.ie, for more information.”

McNaughton added that anyone with serious debt issues should consult a Personal Insolvency Practitioner or an Approved Intermediary, either via the website or by texting GETHELP to the free 50015 number. 

Michelle O’Hara, South Leinster Regional Manager with Money Advice and Budgeting Service (MABS), commented: “The increase in the asset threshold from €400 to €1,500 for a debtor will make DRNs accessible to more people who may have debts up to €35,000 written-off.”

O’Hara added that the provision for virtual meetings between debtors and Approved Intermediaries and PIPs will also significantly increase the ability of debtors to access sustainable statutory solutions for their debt while reducing their close contacts.

Where it applies, an additional extension by 40 days of the duration of a Protective Certificate, offers additional protections to a debtor and their assets from legal proceedings from creditors whilst they apply for a Debt Settlement Arrangement (DSA) or a Personal Insolvency Arrangement (PIA).

According to O’Hara, under the provisions of Section 115a debtors whose PIA has been rejected by creditors may have this reviewed by the court. The outcome of a successful review may result in the debtors’ keeping their home.

The lifting of date restrictions to cater for those in home mortgage arrears since the 1st January 2015 will level the playing field, allowing court reviews for debtors, regardless of the date they fell into arrears.

“In MABS we are dealing every day with people who are struggling with debt and the economic impacts of Covid-19,” said O’Hara. “Our helpline, messenger service and local services are dealing with clients who have a range of concerns from utility bills and credit card debt to more serious mortgage arrears difficulties.

“My key advice to people is to talk directly to your lender. If you find this difficult MABS is here to support you.”