Revising the code of conduct for banks on mortgage arrears:
Central Bank Publishes Revised Code of Conduct on Mortgage Arrears
http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesRevisedCodeofConductonMortgageArrears.aspx
Past FLAC comment:
The Central Bank is in the process of revising its current Code of Conduct on Mortgage Arrears - a very important tool for borrowers, as it governs how banks must deal with customers in mortgage arrears on their family homes. It has put together a consultation paper and has invited submissions from interested parties. The deadline for submissions on the review of the Code has elapsed. FLAC has prepared a set of 14 recommendations which you can read on our site. (There is also a handy summary document of our recommendations available).
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Authorisation of approved intermediaries by the Insolvency Service of Ireland
http://www.isi.gov.ie/en/ISI/Pages/Regulation
Comments from FLAC on the law:
http://www.flac.ie/news/2013/06/25/new-law-to-licence-personal-insolvency-practitioners-will-exclude-poorer-debtors/
New law to licence personal insolvency practitioners will exclude 'poorer' debtors
25 Jun 2013
Legal rules issued today to provide for the licensing of Personal Insolvency Practitioners by the Insolvency Service of Ireland will finally allow debtors to start their applications for personal insolvency in late July/ August 2013. However legal rights group FLAC (Free Legal Advice Centres) says the new regulations fail to deal with a key issue that will worry many people who will seek to use insolvency to sort out their problems.
According to FLAC, neither the Personal Insolvency Act itself nor the new regulations make any mention of what might happen if a Personal Insolvency Practitioner (PIP) decides that a debtor cannot afford to meet the cost of insolvency itself. In cases where there are assets that might be sold off to pay costs, the PIP will add on his or her fees - which may range from hundreds to thousands of euro, depending on the size of the case - to the overall debt settlement or arrangement. Otherwise, a PIP will take payment annually from the insolvent person's income during the course of the insolvency.
However, as no insolvency proposal is guaranteed until the major creditors approve it, late in the process, it is likely that many applications will be made that will not succeed. If it appears the debtor is unlikely to have a proposal accepted by the creditors and the PIP may not be guaranteed payment for his or her services, the usual avenue would be for him or her to charge an up-front fee for advice given and work done. The regulations published today are silent on the issue of how fees may be charged, stipulating only for what purpose the PIP may charge them.
"What happens then to a debtor who has been advised that he or she must pay up-front fees that are beyond his or her means? Where is he or she to go?" asked FLAC Director General Noeline Blackwell. "We in FLAC flagged this issue last year along with issues like the need for independent advice and supports for debtors. Unfortunately, however, this gap is still there in the law published today and it still needs to be fixed."
FLAC has proposed that a register of state-funded public insolvency practitioners should be put in place, in addition to the system of private practitioners proposed. This might include a service provided by seconded MABS money advisors, for example, and a clear line of referral could be established between MABS and any such unit, although such public insolvency practitioners could also be approached directly.
"People need more support, not less, in sorting out their debts. It is a pity the government did not take the opportunity to sort out this particular anomaly. We see from the Insolvency Service Statement that some amendments are being made to the Insolvency Scheme at the moment, so perhaps it is not too late to fix this one," concluded Ms Blackwell.
END
Editors' notes:
- FLAC (Free Legal Advice Centres) is a human rights organisation which exists to promote equal access to justice for all. FLAC is an NGO that relies on a combination of statutory funding, contributions from the legal professions and donations from individuals and grant-making foundations to support its work. FLAC offers basic legal information through its telephone information line (1890 350 250) and free legal advice through its network of 80 volunteer evening advice centres. It also campaigns on a range of issues including personal debt, fairness in social welfare law, public interest law and civil legal aid.
- The Insolvency Service of Ireland has issued a press release and published the new regulations for PIPs and Approved Intermediaries.
- FLAC's recent releases on personal debt law reform are available online.
- In particular, see our release on Weds 19 June re Seanad debate on the Central Bank (Supervision & Enforcement) Bill 2011and our release on Friday last 21 June about the latest mortgage arrears figures.
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Moving out of personal debt - FLAC information session
Paul Joyce addressing attendees at FLAC info session on 'Moving out of Personal Debt', 16 May 2013. also pictured are Noeline Blackwell as Chair and Tom Murray, Partner with Friel Stafford who also presented.
On Thursday 16 May, FLAC hosted an information session on how to use the new legal infrastructure around personal debt and insolvency. Entitled 'Moving out of Personal Debt: How to use the new legal infrastructure on personal debt and insolvency', the event provided an overview of existing and newer infrastructure around personal debt and insolvency, from mortgage arrears to full bankruptcy. It also looked at the current structures from a consumer perspective.
Speakers included Lorcan O'Connor, Director of the Insolvency Service of Ireland; Christopher Lehane, Official Assignee in Bankruptcy; Colette Bennett, Project Development Manager, MABS; Paul Joyce, Senior Policy Analyst, FLAC; and Tom Murray, Partner, Friel Stafford. There were two lively Q&A sessions and FLAC Director General Noeline Blackwell chaired the event. Video clips of the individual inputs will be available on the FLAC website shortly. You can also download presentations from the speakers and read more about the event. We live-tweeted on the day under #flacdebt101
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