The Personal Insolvency Act, 2012 (the "Act"), which was signed into law on 26 December 2012, represents a fundamental overhaul of the personal insolvency regime in Ireland. The Act reforms the current bankruptcy law, establishes three new debt resolution processes as an alternative to bankruptcy and establishes the Insolvency Service of Ireland (the "ISI") with primary function to oversee the three non-bankruptcy alternatives. Many of the elements of the Act have now come into operation, including the establishment of a number of the different operational support functions and services required to give effect to the provisions of the Act and full operation of the ISI.
The ISI has now launched its website (www.isi.gov.ie) and published helpful information leaflets on the three new non-bankruptcy alternatives which are on the website. The ISI is currently in the process of authorising and regulating the approved intermediaries and practitioners who will interface between distressed debtors and their creditors under the different non-bankruptcy arrangements. The process of appointing six new specialist judges as envisaged under the Act is also on-going.
The Act is a substantial piece of legislation running to 199 sections. Given the scope and breadth of the Act, we have not dealt with many of the aspects of the Act in this article. This article only looks to give a very general overview of the non-bankruptcy arrangement most likely (but not necessarily exclusively) to be put to secured creditors, which is the personal insolvency arrangement ("PIA"). A PIA is applicable to unsecured debt and secured debt of up to €3 million, unless all secured creditors agree to waive the limit.
It is anticipated that the ISI will start taking applications from debtors at the end of next month. The chart that follows gives secured creditors an overview of the key considerations and time frames that apply if they receive notification that a distressed debtor has successfully made an application for a period of protection from his or her creditors to allow the formulation of a non-bankruptcy arrangement, particularly a PIA.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
