4 PIAs, 51 DSAs, 66 bankruptcies to date

The Insolvency Service issued their first statistics today.

Very few PIAs have been agreed.

On Morning Ireland, he said that there were 500 PIAs in the system covering debts of €300m. That is an average of €600k in debts each.

So there are and will be very few PIAs affecting the average family home in arrears which has a mortgage of around €250k.

Oddly enough, he expected that by this time next year, "thousands of PIAs" will have been agreed. It's very hard to forecast these things, but I don't expect there will be many.

Brendan

That is 15 months after the legislation hit the statute book and 6 months after these could properly be created.
How many PIPs are licensed, and how many are actually delivering results?

55 solutions in 6 months

Steve

I think the figures have been delivered in a particularly positive way.

70 protective certificates have been issued by the courts to date
7 DSAs have been concluded
4 PIAs have been concluded

This means that for every twelve PIPs in the country, one case has been concluded

We are told that there are now 500 cases in the system which is definitely a step in the right direction. This would seem to imply that the Insolvency Service of Ireland has experienced an avalanche of new cases in the last few weeks. It will be interesting to see how many protective certificates will have been issued at the end of the next quarter. Presumably it will be well in excess of 600 based on the figures provided.

Am I being too negative here by pointing out that the forecast number of arrangements in the 1st year was to be 15000 and so far we have achieved 11 and the press release related to this is in the mood of popping champagne corks !!
The ISI has missed its target by 99% +. Ask any junior sales rep what happens when you miss your target by 99%...............

Im not saying that Lorcan O Connor should release a doom and gloom press release but he should be realistic and concede that 4 completed PIAs in the first year is a failure and nothing but a failure. Its a failure of legislation. The one failure on the part of the ISI is its failure to accept that the legislation has not worked as it might have and its apparent resistance to making any changes to it.There is a need for formal arrangements but the legislation needs to be revised and simplified to make them a more attractive option to debtors. What needs to be done is a subject for another thread. Do we need formal arrangements, Yes we do. Are the ISI capable of administering the process, Yes it is. Does the legislation need revising. Absolutely yes it does.

There are now 128 Pip's and rising
70 Approved Intermediaries (what are those?)

500 cases so far
50 new every week, so for 2014 that will be 2500

70 protective certs

55 arrangements, broken down as
44 DRN's. 7 DSA's and 4 PIA's

Are some of those figures overlapping. As in is it 70 + 55 + 44 + 7 +4 = 180, dealt with or on the way to be dealt with out of the 500 in the system?

What's happening the otehr 320?

Dr Debt where is your figure of 11 coming from, the 7 + 4?

14% of debtors are in the public service

The largest by age group is the 35-44 and then the 45-55.

The time line of 18 days seems extraordinarily efficient. 18 days from initial PIP talking to the ISI to getting a court issued protective certificate. No way..

The ISI has missed its target by 99%. Ask any junior sales rep what happens when you miss your target by 99%...............

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That is a completely false comparison.

Why would the ISI have targets? There may have been forecasts. But hardly targets.

if the economy recovers and people and bankers behave responsibly, we should have very few insolvencies.

Yes it is a target and that's the point that's being missed. There is a target to alleviate as many distressed borrowers as possible and in the ISI's case that target is 15,000 per year. The fact that the target has been missed means that many of those debtors are still in distress and the cases that we had hoped / expected to be resolved by now through formal arrangements have not been. Brendan, In my view forecasts are used for predicting the weather, targets are used for setting goals to measure our effectiveness and performance on a task. One of two things has happened here. Either we have got off to a very slow start which is now correcting OR the framework is flawed and needs revisiting. I think it will be much clearer in six months which of these applies.

Hi Bronte

As you quite rightly point out my earlier understanding was that 55 DSAs had been concluded (as taken from Brendan's opening post). In fact the correct figure is only 7. In terms of PIAs, 4 have been concluded. That means that there are about 59 PCs in existence for arrangements that have not yet come to conclusion (or in respect of arrangements that have failed or didnt proceed).

A PC is required for each and every PIA and DSA and so far 70 have been issued by the courts.

Dr.Debt said:

Yes it is a target and that's the point that's being missed. There is a target to alleviate as many distressed borrowers as possible and in the ISI's case that target is 15,000 per year.

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Hi Dr Debt.

Thanks for that. I had missed the fact that it was a target.

Who set it for them?

I still don't think that they are appropriate. The mere existence of PIAs and Bankruptcy has encouraged the lenders to offer generous split mortgages, and in the case of AIB, debt write down. In most cases, this is preferable to a PIA or bankruptcy.

Brendan, The split mortgage is an interesting one and we need to wait and see how that works out in practice. We need to see what numbers of cases are offered as splits.Again I'm thinking the numbers will be extremely small but I'm open minded for now.

Despite what is being said I dont believe there is much correlation between lenders offering splits and the arrival of formal arrangements.

I think its a missed opportunity to believe that a DSA or a PIA is merely a stick to beat the banks with. A properly functioning PIA in a simplified framework that can be rolled out at a reasonable cost to the debtor and the creditor is what is needed. It should be something that the banks welcome and utilise rather than something to be feared or something to react against. The PIA legislation in current format is a complex cumbersome framework that is difficult and expensive to work with.
When the legislation was being drafted there were too many empty chairs around the table and that needs to be corrected now.

Dr.Debt said:

Brendan, The split mortgage is an interesting one and we need to wait and see how that works out in practice. We need to see what numbers of cases are offered as splits.Again I'm thinking the numbers will be extremely small but I'm open minded for now.

Despite what is being said I dont believe there is much correlation between lenders offering splits and the arrival of formal arrangements.

I think its a missed opportunity to believe that a DSA or a PIA is merely a stick to beat the banks with. A properly functioning PIA in a simplified framework that can be rolled out at a reasonable cost to the debtor and the creditor is what is needed. It should be something that the banks welcome and utilise rather than something to be feared or something to react against. The PIA legislation in current format is a complex cumbersome framework that is difficult and expensive to work with.
When the legislation was being drafted there were too many empty chairs around the table and that needs to be corrected now.

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I agree entirely, in the meantime, I have had 15 enquiries just this week for meetings. Why are people still seeking the UK? Because they can't get, or don't want what is offered in the current system. These are just the people who can move, and yet I am still generating more results than all of the PIP sector in Ireland as published.

Many will go bankrupt using one of then advisors, and if i can guide anyone, please call David Hall at IMBO. It's free!!

Hey ho, I thought my phone would have stopped ringing by now. It hasn't but I genuinely hope it does.

Steve Thatcher
www.stevethatcher.ie

Here's why you are still getting so many enquiries Steve:

http://www.independent.ie/opinion/c...ishy-about-insolvency-solutions-30154305.html

Charlie Weston is the business editor of one of our best selling newspapers.

Meanwhile Lorcan O' Connor can get away with presenting that absymal failure of a report yesterday and nobody can question him and nobody can question how such a sorry mess, including the legislation, came to pass. I wouldn't mind but FG were supposed to be better than FF. How many years is it now and too many people are no nearer to getting solutions.

From Mr Westons article; as things rest there are obvious conflicts here.

1. As set up, most Insolvency arrangements have an effective Bank Veto.
2. Government have impressed that they do not wish to see widespread repossessions.
I just cannot see how these 2 positions can work in practise. Unless lenders and borrowers are legislatively driven into practical arrangements, there is not enough will/trust twix lender/borrower for the present system to work.
The number processed to date is risable!
At this stage , Even IF a DSA or PIA ends up as a stick to beat Banks with, and I am not sure it is, lets get on with it.
I am very taken that Steve does more than our PIP service?

Bronte said:

Meanwhile Lorcan O' Connor can get away with presenting that absymal failure of a report yesterday and nobody can question him and nobody can question how such a sorry mess, including the legislation, came to pass.

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Hi Bronte

He is appearing shortly before the Oireachtas Finance Committee, I believe. Or maybe the Justice Committee. So if you have questions for him, contact a member of the relevant committee.

I don't think we can blame him for the legislation. He didn't write it. But now that it's in place, I have no doubt that he will be giving the Minister feedback on how it's working in practice.

Brendan

Brendan Burgess said:

The mere existence of PIAs and Bankruptcy has encouraged the lenders to offer generous split mortgages, and in the case of AIB, debt write down. In most cases, this is preferable to a PIA or bankruptcy.

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I agree with this assessment. The average debt write down under the ISI has been 77% and the debtor's name goes on a register for all to see. The banks would no doubt like to improve on that percentage and not too many debtors want their names in the public domain for the wrong reasons so there are plenty of incentives on both sides to come to an arrangement regarding unsustainable debts outside of the formal framework of the ISI.

Why would these thousands of debtors enter into PIA/DSA/Bankruptcies when at the moment there is very little consequences for not paying your debts?

When we see a larger amount of repossessions and the sheriff executing seizure orders you will then see these debtors seeking solutions. Until then there is no incentive for people to change their living standards to meet the reasonable living expenses and be a guinea pig for an untested process.
I say this as someone who with debts into hundreds of thousands of euros and has faced very little action regarding it. I am seeking bankruptcy as I want to draw a line in the sand but I could also have very easily kept plodding along and drawing out any processes that were ongoing.

I'm sure our new system has it's faults and I hope they're ironed out but I believe the PIA's are based closely on the uk system and that seems to work just fine

pat2 said:

I believe the PIA's are based closely on the uk system and that seems to work just fine

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Not at all. There is no precedent anywhere in the world for our PIAs which deal with secured and unsecured debt.

In the vast majority of countries, when a borrower can't pay their mortgage, the house is repossessed and sold by the bank.

Our Debt Settlement Arrangement is similar to the IVA in the UK.

Brendan

I see the insolvency service are at it again, predicting a thousand bankruptcies a year, no idea where they are getting the figure from though:

http://www.independent.ie/business/...ptcy-to-soar-into-the-thousands-30182763.html

Most interesting is that all this is going to cost someone. The official assignee instead of selling property is going to hold on to it and manage it. And pay someone to manage it. So now we'll have another new property company in addition to Nama.

I guess the likes of the rent receivers who get paid about 1200 a month, and the auctioneers/estate agents will be paid ? a month, and the locksmiths, and the connection the gas and esb people will all be delighted with this little money spinner.

We have a shortage of property in Dublin, the Minister for Finance wants property to go higher, Nama is holding onto apparently vast swaths of property and now the Insolvency Service/Official Asssignee is going to also hold onto property, is everybody waiting for the top of the bubble to sell?

In the UK when there is a bankruptcy, does the agency hold onto property and deal with it or do they immediately sell it?

Brendan Burgess said:

Not at all. There is no precedent anywhere in the world for our PIAs which deal with secured and unsecured debt.

In the vast majority of countries, when a borrower can't pay their mortgage, the house is repossessed and sold by the bank.

Our Debt Settlement Arrangement is similar to the IVA in the UK.

Brendan

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Is it not true that an IVA can also deal with secured debt if the creditor agrees? This would effectively give them a veto similar to the Irish situation

Bronte said:

I see the insolvency service are at it again, predicting a thousand bankruptcies a year, no idea where they are getting the figure from though:

http://www.independent.ie/business/...ptcy-to-soar-into-the-thousands-30182763.html

Most interesting is that all this is going to cost someone. The official assignee instead of selling property is going to hold on to it and manage it. And pay someone to manage it. So now we'll have another new property company in addition to Nama.

I guess the likes of the rent receivers who get paid about 1200 a month, and the auctioneers/estate agents will be paid ? a month, and the locksmiths, and the connection the gas and esb people will all be delighted with this little money spinner.

We have a shortage of property in Dublin, the Minister for Finance wants property to go higher, Nama is holding onto apparently vast swaths of property and now the Insolvency Service/Official Asssignee is going to also hold onto property, is everybody waiting for the top of the bubble to sell?

In the UK when there is a bankruptcy, does the agency hold onto property and deal with it or do they immediately sell it?

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I don't see the problem with this practice if it is cost effective and not seen as a gravy train. It states in the article that he will do this for rental properties that come into his control so we must remember that if this property is occupied then it is somebodies home. Should they be immediately evicted?
Why sell at the bottom of the market when you have a rent coming in?

pat2 said:

Why sell at the bottom of the market when you have a rent coming in?

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Do the maths on it. Rent less property manager, less estate agent, less property tax, less PRTB registration. You can be sure that everything will be charged at top dollar by the 'professionals.'

It's hard enough right now to be a landlord, if you also had to hire the experts you can be guaranteed that you will be running at a loss.

Do you actually believe that the OA should become a property manager?