The Personal Insolvency Act 2012 introduced 3 mechanisms for non-judical debt settlement;
Specifically, the PIA was introduced to address debt problems relating to secured assets, such as mortgages on family homes. In order for borrowers PIA (debt settlement proposal) to be successful, the 2012 Act noted that approval was required by
This condition gave banks (i.e. secured lenders) an effective power of veto and many commentators point to the rule as the reason for the comparatively low level of take-up in PIA’s to date.
The new act has been amended to give the Irish courts the ability to overturn a secured creditors’ decision to reject a PIA under the previous 2012 Act, subject to application by a Personal Insolvency Practitioner (“PIP”).
In order for the court to review the PIA,
It is widely, hoped the amendment will lead to a rise in the number of PIA (debt settlement arrangements) given the relatively low levels of take-up since their initial introduction.
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