The Personal Insolvency Bill 2012 has passed Committee Stage in the Dáil. The Select Committee on Justice, Defence and Equality made a number of changes to the Bill, many of these being technical changes to clarify provisions or to correct inconsistencies.
Some of the key changes made by the Select Committee were as follows:
- A new section was inserted which exempts certain records held by the Insolvency Service from the Freedom of Information (FOI) Acts. The intention is that personal data and information regarding an individual’s financial circumstances, other than that prescribed to be available on a public register, will not be available for general access under the FOI Acts. The new provision also ensures that documentation relating to the internal deliberative process of the Insolvency Service will not be subject to FOI;
- The provision in the Bill which sets out the eligibility criteria for a Debt Relief Notice was amended by reducing from five to three years, the period that a debtor who is insolvent is likely to remain insolvent. Minister Shatter accepted that the original period in the Bill was too long. In the context of Debt Relief Notices, the Minister also commented he would keep all amounts under review prior to the enactment of the Bill particularly in regard to available monthly disposable income and assets, and that he would make any "sensible adjustments" that might be required;
- Three new subsections were inserted, designed to improve the operation of the claw-back mechanism in the Bill. The new subsections comprise of (a) an adjustment to prevent overpayments by the debtor by providing that payments received by the secured creditor under the Personal Insolvency Arrangement in respect of the written down amount of the secured debt must be deducted from the clawback amount; (b) an adjustment to prevent overpayments by providing that the expenses and costs borne by the debtor in connection with the sale of the property, such as estate agent fees and legal costs, will be deducted from the value attributable to the property when calculating the amount of the clawback; and (c) a provision to ensure the clawback only applies where the sale proceeds exceed the outstanding amount of the secured debt;
- A new section was inserted allowing the Insolvency Service to prepare and publish guidelines for Personal Insolvency Practitioners on their duties. These guidelines may include a model form of a debt settlement arrangement and also a Personal Insolvency Arrangement. The new section provides that a Personal Insolvency Practitioner is required to have regard to any guidelines published by the Insolvency Service in carrying out his or her duties. The purpose of this subsection is to ensure there is consistency of approach by Personal Insolvency Practitioners in respect of their duties; and
- A new section was inserted which provides for the making of guidelines with regard to the fees that may be charged by Personal Insolvency Practitioners.
Timescale for Bill
The Bill is now awaiting Report Stage in the Dáil. Minister Shatter indicated that this stage is likely to be timetabled for October.
In the meantime, Mr. Lorcan O’Connor has been appointed Director-designate of the Insolvency Service and will commence his role on 22 October.
To access our previous article on the Bill click here.