Pre-emptive insolvency, the time is now.

A headline today caught our attention, it was about an injunction to have an insolvency solution honoured.

Personal insolvency is a legislation backed process (unlike informal debt deals) and for this reason you can’t unilaterally decide, as a creditor, to opt out of one that is already in existence.

What is interesting at this point in time is that many of the applications we track in the courts when gathering possession statistics are about applications for change of name of the plaintiff. This occurs when loan books are being sold and the proceedings are being altered to reflect the new owner.

There is considerable confusion even within the courts because of this and it may be a case that a person could use this as an opportunity to seek personal insolvency because in the midst of this there is a lower level of likelihood that loan buyers will engage in the process.

Failing to do this means they lose …

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Debt Relief Notice ceiling raised by 75% to €35,000

30 September 2015: The Insolvency Service of Ireland (ISI) has welcomed an amendment to legislation which will allow people on a lower income and with few assets to have debts of up to €35,000 completely written off.

The Debt Relief Notice, also referred to as a DRN, is one of the legally binding debt solutions provided under the Personal Insolvency Act available through the ISI. It allows for the complete write-off of debts such as personal loans, credit card loans, store card debts, credit union loans and overdrafts. An application for a Debt Relief Notice is approved by the Court and once it is granted, the person can no longer be contacted by creditors asking for those debts to be repaid.

Commenting on the legislative amendment, the Director of the ISI, Mr. Lorcan O’Connor stated:

The Debt Relief Notice is intended for people with very limited means who are in genuine financial distress and we know from the hundreds of people who have availed of this debt solution already that it is life changing. I fully expect that the increase …

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Morning Ireland: Interest only loans and the Insolvency Service

We were asked to speak on RTE’s ‘Morning Ireland’ business news with Brian Finn about interest only mortgages and whether or not they constituted a future threat to the mortgage market as well as to comment on the Insolvency Service of Ireland figures that were out which showed a marked increase (although still low gross numbers) in resolutions.

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RTE Six One News: Insolvency Service piece by Conor Hunt, 3rd April 2014

We gave a few thoughts on the recent ISI figures.

That the case numbers are low is to be expected, firstly, informal negotiations have had a six year head start, you can’t expect the ISI to be caught up already, secondly, in the UK it took about a decade for the system in general to find its feet.

Lastly, many people don’t want to use personal insolvency as it is rigid and informal deals are not to the same extent, banks offer better terms outside of insolvency, and perhaps the greatest success is that banks are doing these deals only since the ISI launched.

Prior to that they wouldn’t so the fear of people using these solutions has spurred the lenders into action.

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RTE 6 News: Property prices

In this piece covering property prices, the increases in Dublin and the situation around the rest of the country we gave a brief comment highlighting that for the first time outside of Dublin there was a year on year sign of stabilisation in prices. Paul Murphy gave some excellent analysis on the topic.

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Newstalk Lunchtime: Jonathan Healy and Karl Deeter on Insolvency Service of Ireland

We spoke to Jonathan Healy about the new insolvency service, how it was not going to be possible to determine its success for at least three months (as protective certs last 70 days and can last more), as well as the importance of understanding that the security behind a debt is a very different concept to the decency of the creditor.

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Defining ‘Strategic Default’

One of the things the whole strategic default issue lacks is any set definition. There are words that get used with motives embedded in them, such abuse of language only exists when there is not a set meaning to the word. To call a default strategic is two very different things depending on who is talking about it.

To a bankers mind it might mean any loan unpaid where the person has a penny to spare, to a borrower it might only be where a person withholds all money from the lender and goes and lives the life of Reilly.

I’m asking for your help on this one, please use comments to add your thoughts and I’ll re-edit the post appropriately.

To start with I’ll attempt to define a strategic default on multi-investment properties, there are other types so feel free to give the example or way of defining it as you see it.

1. Multi-investment property investors: Where the person is collecting rent and paying interest only, then the bank look for capital and interest and the person goes …

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Pat Kenny Show: Myles Duggan talks to Karl Deeter about mortgage defaults 31st July 2013

On the 31st of July we spoke to Myles Duggan who was covering for Pat Kenny (same day as Pat’s big announcement!) about mortgage defaults, compliance and changes to the ability of banks to repossess homes.

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