Neofinancialsolutions guide to the Personal Insolvency Act

I heard Paul Carroll on Mooney today talking about a guide he has written to the PIA.

You register on his website and he sends you a link to [broken link removed]

I only caught a bit of the radio programme and he was wrong in the little bit I heard.

I think that the idea of a guide is a good one, but either I have misunderstood the Act or he is wrong in quite a few places. This is news to me. Was it part of the new Act? In fact, I am not even sure what it means.

It's from page 22

b. Act of Bankruptcy
It is important to realise that applying for a Personal Insolvency Arrangement (PIA) is an act of bankruptcy and if it fails, either by way of not being agreed by creditors or the agreement is not fulfilled by the debtor, bankruptcy is automatically triggered.

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I haven't seen this in the Act. This is what the Explanatory Memorandum says

Section 118 provides that a Personal Insolvency Arrangement shall be deemed to have failed after a 6 month arrears default has occurred and shall terminate when a creditor or the personal insolvency practitioner notifies the Insolvency Service of the default. Where the Insolvency Service receives notification of such default it shall record the failure of the Personal Insolvency Arrangement in the Register of Personal Insolvency Arrangements.

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I was listening to it too and thought there was a few errors as well or if not errors differences to the way I understood it. One that struck me was he said people could go through MABS or Citizens Information offices for the under 20k debt, they certainly can't use CIS offices.

Brendan

In order to be eligible for a PIA you must be insolvent, which is construed as being unable to pay debts as they fall due for payment.

If the PIA fails, then the Protection is lifted, and creditors may take enforcement action, including petitioning to have the debtor made bankrupt.

it will be difficult to properly advise clients until we see the new Act which will be passed within the next couple of months to amend the Personal Insolvency Act 2012 (Yes, the Act is only a couple of months old, and already it has to be amended!)

Jim Stafford

wbbs said:

I was listening to it too and thought there was a few errors as well or if not errors differences to the way I understood it. One that struck me was he said people could go through MABS or Citizens Information offices for the under 20k debt, they certainly can't use CIS offices.

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That is a relief. I was surprised at this when I read it.

The debtor may apply, through an intermediary such as MABS or Citizens Advice Bureau, for a debt relief certificate (DRC)(The specific intermediaries have not yet been detailed)

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Page 13

I hadn't heard that the Citizens Advice Bureau (whatever that might be) was involved but I hadn't really spent any time on the Debt Relief Notice.

Jim Stafford said:

If the PIA fails, then the Protection is lifted, and creditors may take enforcement action, including petitioning to have the debtor made bankrupt.

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Thanks Jim

That is what I thought. Bankruptcy is not "automatically triggered" as he says.

Brendan

But he does get some stuff right. See page 8

b. Chose your Personal Insolvency Practitioner (PIP) wisely

It will be very important for you to choose a PIP who you can develop a good working relationship with. It will be your PIP who will propose an arrangement on your behalf to your creditors and the Insolvency Service. The PIP will work closely with you during the duration of you insolvency arrangement so it is very important that they have a good understanding of your situation and you feel they are acting with your interests in mind as well as any creditor.

The PIP is your appointment and should be done wisely.

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On reflection, I wonder if it's just that his use of language is poor or sloppy?

I don't think that the PIP proposes anything to the Insolvency Service. They propose it to the creditors and if they agree, they notify/lodge/register it with the Insolvency Service.

If a creditor wanted to apply to have a debtor made bankrupt, I would think a failed PIA might well support that application. However, nothing is automatically triggered.

Citizens Advice Service basically is in charge of MABS which may be where the confusion lies but you won't be able to walk into your Citizens Info office and apply for any of the proposed solutions, they will just refer you to MABS.

Hi wbbs

The Citizens Information Service (CIB) is the body of which MABS is part. They run citizensinformation.ie a website I regularly link to. They have Citizens Infomation Centres throughout the country.

The Citizens Advice Bureau is a UK equivalent.