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Question

209. Deputy Michael McGrath asked the Tánaiste and Minister for Justice and Equality if the facility to appeal to the court the rejection of an insolvency proposal by a creditor is only available where a family home is involved; the number of cases whereby such a facility has been availed of and the outcome in each; and if she will make a statement on the matter. [12963/16]

Answer

Tánaiste and Minister for Justice and Equality (Deputy Frances Fitzgerald): The Deputy is referring to the new court review provision, inserted as section 115A of the Personal Insolvency Acts by section 21 of the Personal Insolvency (Amendment) Act 2015. This was an important legislative change, as it introduced a new power for the courts to approve and impose a personal insolvency proposal made by a borrower which has been rejected by the creditors, provided that the judge considers, using criteria set out in s. 115A, that the proposal is fair and reasonable to all concerned.
Under this provision, an application for the new court review can be made by an insolvent person who has proposed a personal insolvency arrangement, if the proposal:
- has been refused by their creditors,
- includes a mortgage, or other debt, whose payment is secured on the borrower's home (their principal private residence, as defined in the Personal Insolvency Acts),
- and the borrower was in arrears on that mortgage or other debt on 1 January 2015 ( or on that date was in a restructure of such arrears, but remains insolvent.)
The appropriate Court for hearing the review applications is normally the Circuit Court, where the cases are heard by the specialist personal insolvency judges. Under the amending Act, all applications to court for this review, and their outcomes, must be notified to the Insolvency Service of Ireland (ISI). The ISI has indicated that it intends to publish overall details of the s. 115A applications on a regular basis.
The new provision was commenced with effect from 20 November 2016, after the necessary changes to the relevant Rules of Court had been put in place. As of 24 May 2016, the ISI advises that 46 review applications to Court have been notified to the ISI. The courts had decided 5 applications - in 4 of these, the borrower's proposal was approved by the Court, while in 1, it was rejected by the Court. 5 further cases had been withdrawn while 2 had been struck out by consent: these outcomes can result from settlement negotiations between the parties. 34 other applications were before the Courts: in 32 of these, the Court has held an initial hearing but new affidavits or additional material had been requested and adjournments have been given to allow for filing of this material in advance of a full hearing. The remaining 2 cases were awaiting an initial hearing.
A further relevant development is the new Scheme of Access to Independent Legal and Financial Advice for Home Mortgage Arrears, which I announced on 22 January and which is expected to come into operation very shortly. The objective of the Scheme is to ensure that an insolvent borrower at risk of losing his or her home due to mortgage arrears can get the necessary expert advice and help to identify their best option to resolve their financial difficulties. MABS, the Money Advice and Budgeting Service, will act as gateway to the Scheme and will be able to refer the borrower to a personal insolvency practitioner, solicitor or accountant if needed, without cost to the insolvent borrower and at fixed cost to the Scheme. The Scheme includes, in particular, a component to ensure that an insolvent borrower can access expert financial assistance and legal aid for seeking the new Court review, where needed.