(ii) whether the debtor is likely to be able to meet the financial commitment associated with an arrangement on an ongoing basis, in particular having regard to the debtor’s payment capacity at and before the time at which the advice is being given, (iii) the nature and extent of the debts owed by the debtor to his or her creditors and, in the case of secured debts (if any), the nature of the security, (iv) the complexity of the debtor’s case, and (v) the likelihood, in the personal insolvency practitioner’s opinion, of an arrangement being formulated on terms that would provide, for the debtor and a majority of his or her creditors, an acceptable alternative to the debtor’s bankruptcy; (b) the general effect of making a proposal for, and of entering into, an arrangement, including as to the effect on the debtor’s credit rating; (c) the consequences for the debtor of entering into an arrangement if the debtor does not comply with the terms of that arrangement; (d) the other option or options (if any) available to the debtor and the general effect of any such option or options, including advice relating to— (i) negotiation with a creditor or creditors with a view to adjusting the terms of a debt owed to that creditor or creditors, whether as part of any arrears process or otherwise, (ii) becoming a specified debtor as respects a Debt Relief Notice, and (iii) bankruptcy.
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(3)In advising the debtor under subsection (1)(c) of the appropriateness of entering into a Personal Insolvency Arrangement or a Debt Settlement Arrangement, the personal insolvency practitioner shall have regard to— (a) the value of the debtor’s unsecured debts as compared to the value of the debtor’s secured debts (if any), (b) if applicable, whether the debtor has communicated with his or her secured creditors for the purpose of seeking to renegotiate or restructure the secured debts, (c) whether the debtor has co-operated in good faith with his or her creditors who are secured creditors as respects the debtor’s principal private residence in connection with any process relating to mortgage arrears operated by the secured creditors concerned which has been approved or required by the Central Bank of Ireland and which relates to the secured debt concerned, (d) whether any of the debtor’s secured creditors have indicated to the debtor or the personal insolvency practitioner a willingness to vary the terms of the secured debt to facilitate the operation of a Debt Settlement Arrangement in respect of the debtor’s unsecured debts (including, without limitation, any variation of the terms of the secured debt that would reduce the amounts payable by the debtor in respect of the secured debt for the duration of the Debt Settlement Arrangement), (e) where the debtor has proposed, but not entered into, a Debt Settlement Arrangement in respect of his or her unsecured debts, the terms of such proposal and the result of the creditors’ meeting to consider such proposal, and (f) where the debtor has entered into a Debt Settlement Arrangement in respect of his or her unsecured debts that has come to an end, failed or otherwise terminated, the circumstances of such ending, failure or other termination.
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(4)The personal insolvency practitioner shall confirm his or her advice under subsection (1)(c) in writing to the debtor.
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(5)Where the advice of a personal insolvency practitioner under subsection (1) is that the debtor should not make a proposal for, or enter into, an arrangement, the personal insolvency practitioner shall notify the Insolvency Service of that fact, and the appointment of the personal insolvency practitioner under section 49
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(3)shall come to an end.
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Instruction by debtor to personal insolvency practitioner to make proposal for arrangement.
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53.— Where a debtor, having received advice under section 52
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(1), considers that he or she should make a proposal for an arrangement, he or she shall instruct the personal insolvency practitioner in writing to make a proposal for a Debt Settlement Arrangement or a Personal Insolvency Arrangement, as the case may be, on his or her behalf in accordance with
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Chapter 3
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or 4 , as the case may be.
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Statement to be prepared by personal insolvency practitioner.
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54.— On receipt of an instruction under section 53 , the personal insolvency practitioner shall complete a statement confirming that he or she is of the opinion that— (a) the information contained in the debtor’s Prescribed Financial Statement is complete and accurate; (b) the debtor is eligible under section 57 or 91 , as the case may be, to make a proposal for a Debt Settlement Arrangement or Personal Insolvency Arrangement, as the case may be; (c) having considered the Personal Financial Statement completed by the debtor, there is no likelihood of the debtor becoming solvent within the period of 5 years commencing on the date on which the statement is made; (d) having regard to the debtor’s circumstances as set out in the Prescribed Financial Statement, it is appropriate for the debtor to make a proposal for a Debt Settlement Arrangement as there is a reasonable prospect that the debtor entering into such an arrangement would facilitate the debtor becoming solvent within a period of not more than 5 years or, as the case may be, it is appropriate for the debtor to make a proposal for a Personal Insolvency Arrangement as there is a reasonable prospect that the debtor entering into such an arrangement would facilitate the debtor becoming solvent within a period of not more than 5 years.
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Chapter 3
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Debt Settlement Arrangements Debt Settlement Arrangement: General Conditions.
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55.— (1) Subject to the provisions of this Act, a debtor who satisfies the eligibility criteria specified in section 57 may make a proposal for a Debt Settlement Arrangement with one or more of his or her creditors in respect of the payment or satisfaction of his or her debts.
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(2)A proposal for a Debt Settlement Arrangement shall be made on behalf of a debtor by a personal insolvency practitioner in accordance with the provisions of this Part.
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(3)Where two or more debtors are jointly party to all of the debts to be covered by a Debt Settlement Arrangement and each of those debtors satisfy the eligibility criteria specified in section 57 , those debtors may jointly propose a Debt Settlement Arrangement and, unless otherwise specified, references in this Chapter to the “debtor” shall be construed as meaning such joint debtors.
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(4)(a) A Debt Settlement Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt. (b) A proposal for a Debt Settlement Arrangement shall not include any terms that, if contained in a Debt Settlement Arrangement that came into effect, would contravene paragraph (a).
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(5)Unless otherwise expressly stated, a reference in this Chapter to a debt is a reference to an unsecured debt and a reference to a creditor is a reference to an unsecured creditor.
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Debt Settlement Arrangement permitted once only.
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56.— A debtor may enter into a Debt Settlement Arrangement once only.
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Debt Settlement Arrangement: Eligibility criteria.
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57.— (1) Subject to the provisions of this section and this Chapter, a debtor shall not be eligible to make a proposal for a DebtSettlement Arrangement unless he or she satisfies the following criteria— (a) that the debtor— (i) is domiciled in the State, or (ii) within one year before the date of the application for a protective certificate has ordinarily— (I) resided in the State, or (II) had a place of business in the State; (b) that the debtor is insolvent; (c) that the debtor has completed a Prescribed Financial Statement and has made a statutory declaration confirming that the statement is a complete and accurate statement of the debtor’s assets, liabilities, income and expenditure; (d) that the personal insolvency practitioner has completed a statement under section 54 in respect of the debtor; (e) that the debtor is not— (i) an undischarged bankrupt, (ii) a discharged bankrupt subject to a bankruptcy payment order, (iii) a person who is a specified debtor as respects a Debt Relief Notice which is in effect, (iv) a person who, as a debtor, is subject to a Personal Insolvency Arrangement which is in effect, or (v) a person who, as a debtor, is subject to an arrangement under the control of the court under Part IV of the Bankruptcy Act 1988 ; (f) that the debtor has not— (i) been the subject of a protective certificate issued under section 61 less than 12 months prior to the date of the application for a protective certificate, (ii) had his or her debts discharged pursuant to section 46
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(1)less than 3 years prior to the date of the application for a protective certificate, (iii) had his or her debts discharged pursuant to a Personal Insolvency Arrangement less than 5 years prior to the date of the application for a protective certificate, or (iv) been discharged from bankruptcy less than 5 years prior to the date of the application for a protective certificate.
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(2)The criterion specified in subsection (1)(f) shall not apply where the debtor has, on notice to the Insolvency Service, made an application to the appropriate court and the court has made an order stating that it is satisfied that the current insolvency of the debtor arises by reason of exceptional circumstances or other factors which are substantially outside the control of the debtor and that it would be just to permit the debtor to make a proposal for a Debt Settlement Arrangement.
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(3)A debtor shall not be eligible to make a proposal for a Debt Settlement Arrangement where 25 per cent or more of his or her debts (other than excluded debts and secured debts) were incurred during the period of 6 months ending on the date on which an application is made under section 59 for a protective certificate.
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Creditor consent required for inclusion of excludable debt in Debt Settlement Arrangement.
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58.— (1) An excludable debt shall be included in a proposal for a Debt Settlement Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal.
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(2)Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Debt Settlement Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by— (a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and (b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Debt Settlement Arrangement.
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(3)Subject to subsection (6), a creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
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(4)Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Debt Settlement Arrangement.
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(5)Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Debt Settlement Arrangement, that creditor shall be entitled to vote at any creditors’ meeting called to consider that proposal.
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(6)Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 63
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(1)in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
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(7)An excludable debt shall not be the subject of a Debt Settlement Arrangement unless it is a permitted debt.
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(8)In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.
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Debt Settlement Arrangement: Application for protective certificate.
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59.— (1) Where a personal insolvency practitioner has been instructed pursuant to section 53 to make a proposal for a Debt Settlement Arrangement, the personal insolvency practitioner shall notify the Insolvency Service of the debtor’s intention to propose a Debt Settlement Arrangement and apply on behalf of the debtor for a protective certificate.
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(2)The application referred to in subsection (1) shall be in such form as may be specified by the Insolvency Service and shall be accompanied by such fee (if any) as may be prescribed and the following documents: (a) the statement of the personal insolvency practitioner prepared under section 54 ; (b) a document signed by the debtor confirming that he or she satisfies the eligibility criteria specified in section 57 ; (c) the statutory declaration of the debtor referred to in section 57
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(1)(c); (d) the Prescribed Financial Statement; (e) a schedule of the creditors of the debtor and the debts concerned, stating in relation to each such creditor— (i) the amount of each debt due to that creditor, (ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and (iii) such other information as may be prescribed; (f) the debtor’s written consent to— (i) the disclosure to the Insolvency Service, (ii) the processing by the Insolvency Service, and (iii) the disclosure by the Insolvency Service to creditors of the debtor concerned, of personal data of that debtor, to the extent necessary in respect of the Debt Settlement Arrangement procedure provided for in this Chapter; (g) the debtor’s written consent to the making of any enquiry under section 60 relating to the debtor by the Insolvency Service.
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(3)An application under this section may be withdrawn by the personal insolvency practitioner at any time prior to the issue of a protective certificate under section 61 .
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(4)Where a personal insolvency practitioner becomes aware of any inaccuracy or omission in an application under this section or any document accompanying such an application, he or she shall inform the Insolvency Service of this fact as soon as practicable and the Insolvency Service shall have regard to any information provided under this subsection for the purposes of its consideration of the application.
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Debt Settlement Arrangement: Consideration by Insolvency Service of application for protective certificate.
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60.— (1) In its consideration of an application under section 59 , the Insolvency Service shall be entitled to request any further information it requires from the debtor or personal insolvency practitioner and to defer further consideration of the application until such information is furnished to it.
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(2)Where a debtor or personal insolvency practitioner fails to provide the information requested by the Insolvency Service under subsection (1) within 14 days or such longer period as the Insolvency Service may permit the application shall be deemed to be withdrawn.
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(3)Subject to subsection (4), in considering the application for a protective certificate, the Insolvency Service shall make such enquiries as it considers necessary to satisfy itself: (a) that the personal insolvency practitioner is a person entitled to act as a personal insolvency practitioner; (b) having regard to the documents which are required to accompany the application for a protective certificate— (i) that the debtor satisfies the eligibility criteria for making a proposal for a Debt Settlement Arrangement specified in section 57 , and (ii) the application does not appear to be frivolous or an attempt to frustrate the efforts of creditors to recover debts due to them.
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(4)Subject to subsections (5) to (7), for the purposes of subsection (3) the Insolvency Service shall be entitled to presume that the debtor satisfies the eligibility criteria for a Debt Settlement Arrangement specified in section 57 if the documents required to be lodged with the Insolvency Service have been so lodged and the Insolvency Service has no reason to believe that the information supplied in or in support of the application for a protective certificate is incomplete or inaccurate.
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(5)The Insolvency Service may make such enquiries as it considers necessary to verify the completeness or accuracy of any matter referred to in the Prescribed Financial Statement of the debtor or in relation to the assets, liabilities, income or expenditure of the debtor.
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(6)Without prejudice to the generality of subsection (5) the matters in respect of which the Insolvency Service may make an enquiry include the following: (a) particulars relating to bank accounts, securities accounts or other accounts held, solely or jointly, by or for the benefit of the debtor with financial institutions or financial intermediaries in the State or abroad; (b) particulars relating to assets of the debtor and the value of such assets; (c) particulars of the liabilities of the debtor; (d) the employment and income of the debtor; (e) payments received by the debtor from the Department of Social Protection or other Departments of State or other State bodies or agencies and whether or not such payments are made as agent of any other person; (f) taxes or charges imposed by or under statute paid or owed by the debtor, whether within or outside the State and refunds in respect of such taxes and charges which are or may become due to the debtor.
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(7)Nothing in this section shall be construed as requiring the Insolvency Service to make an enquiry in any case.
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(8)A person who receives an enquiry from the Insolvency Service pursuant to this section shall be under a duty to furnish the information requested as soon as reasonably practicable.
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(9)Notwithstanding anything contained in any enactment, for the purposes of the performance of the functions of the Insolvency Service under this Chapter information held by a Department of State, the Revenue Commissioners, a local authority or any other State body or agency in relation to a debtor may be furnished to the Insolvency Service.
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Debt Settlement Arrangement: Referral of application to court for issue of protective certificate.
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61.— (1) Where the Insolvency Service, following its consideration under section 60 — (a) is satisfied that an application under section 59 is in order, it shall— (i) issue a certificate to that effect, (ii) furnish that certificate together with a copy of the application and supporting documentation to the appropriate court, and (iii) notify the personal insolvency practitioner to that effect, and (b) is not so satisfied, it shall notify the personal insolvency practitioner to that effect and request him or her, within 21 days from the date of the notification, to submit a revised application or to confirm that the application has been withdrawn.
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(2)Where the appropriate court receives the application for a protective certificate and accompanying documentation pursuant to subsection (1)(a), it shall consider the application and documentation and, subject to subsection (3)— (a) if satisfied that the eligibility criteria specified in section 57 have been satisfied, and the other relevant requirements relating to an application for the issue of a protective certificate have been met, shall issue a protective certificate, and (b) if not so satisfied, shall refuse to issue a protective certificate.
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(3)The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
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(4)A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
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(5)Subject to subsections (6) and (7) and section 76
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(2), a protective certificate shall be in force for a period of 70 days from the date of its issue.
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(6)Where a protective certificate has been issued pursuant to subsection (2)(a), the appropriate court may, on application to that court by the personal insolvency practitioner, extend the period of the protective certificate by an additional period not exceeding 40 days where— (a) the debtor and the personal insolvency practitioner satisfy the court that they have acted in good faith and with reasonable expedition, and (b) the court is satisfied that it is likely that a proposal for a Debt Settlement Arrangement which is likely— (i) to be accepted by the creditors, and (ii) to be successfully completed by the debtor, will be made if the extension is granted.
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(7)Where a protective certificate has been issued pursuant to subsection (2)(a) or extended under subsection (6), the appropriate court may on application to that court extend the period of the protective certificate by a further additional period not exceeding 40 days where— (a) the personal insolvency practitioner has been appointed in accordance with section 49
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(7), and (b) the court is satisfied that the extension is necessary to enable the personal insolvency practitioner so appointed to perform his or her functions under this Chapter.
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(8)A hearing held under subsection (7) shall be held with all due expedition.
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(9)The period of a protective certificate may be extended under subsection (7) once only.
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(10)The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court— (a) issues or extends a protective certificate under this section, (b) refuses to issue or extend a protective certificate under this section, or (c) decides to hold a hearing referred to in subsection (3).
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(11)Where a protective certificate is issued under this section, the Insolvency Service shall— (a) enter details of the name and address of the debtor and the date of issue of the protective certificate, and (b) where applicable, the extension under this section of the protective certificate, together with such other details as may be prescribed under section 133
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(3)(b), in the Register of Protective Certificates.
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(12)On receipt of a notification under subsection (10) of a decision of the court referred to in that subsection, the personal insolvency practitioner shall notify each of the creditors specified in the schedule of creditors of that decision and, in the case of a decision to issue a protective certificate, the notification by the personal insolvency practitioner shall contain a statement— (a) that the debtor intends to make a proposal for a Debt Settlement Arrangement, (b) of the effect of the protective certificate under section 62 , and (c) of the right of the creditor under section 63 to appeal the issue of the protective certificate.
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(13)Notwithstanding the provisions of subsections (5), (6) and (7), a protective certificate that is in force on the date on which a proposal for a Debt Settlement Arrangement is approved in accordance with section 73 shall continue in force until it ceases to have effect in accordance with section 76 .
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(14)A protective certificate issued under this section shall— (a) specify— (i) the name of the debtor who is the subject of it, (ii) the debts (“specified debts”) which are subject to it, and (iii) the name of each creditor to whom a specified debt is owed, and (b) contain such other information as may be prescribed.
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(15)In considering an application under this section the appropriate court shall be entitled to treat a certificate issued by the Insolvency Service under subsection (1) as evidence of the matters certified therein.
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Debt Settlement Arrangement: Effect of issue of protective certificate.
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62.— (1) Subject to subsections (3), (4), (5) and (8), a creditor to whom notice of the issue of a protective certificate has been given shall not, whilst the protective certificate remains in force, in relation to a specified debt— (a) initiate any legal proceedings; (b) take any step to prosecute legal proceedings already initiated; (c) take any step to secure or recover payment; (d) execute or enforce a judgment or order of a court or tribunal against the debtor; (e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor holds security over the goods; (f) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor; (g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued— (i) terminate or amend that agreement, or (ii) claim an accelerated payment under that agreement.
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(2)Whilst a protective certificate remains in force, no bankruptcy petition relating to the debtor— (a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt, (b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
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(3)Without prejudice to subsections (1) and (2), and subject to section 68 , whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Debt Settlement Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.
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(4)Notwithstanding subsection (1), the fact that a protective certificate is in force in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (1) as respects another person who has guaranteed the debts of the debtor to which the protective certificate relates.
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(5)Notwithstanding subsection (1), the fact that a protective certificate is in force in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) as respects a person who has jointly contracted with the debtor or is jointly liable with the debtor to the creditor and that other person may sue or be sued in respect of the contract without joining the debtor.
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(6)Subsections (4) and (5) do not apply where a protective certificate is also in force as respects the other person.
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(7)In reckoning any period of time for the purpose of any applicable limitation period in relation to any proceedings or process to which subsection (1) or (3) applies (including any limitation period under the Statute of Limitations 1957), the period in which the protective certificate concerned is in force under section 61 shall be disregarded.
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(8)A secured debt shall not be subject to or affected by a protective certificate under this Chapter.
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Debt Settlement Arrangement: Right of appeal as respects protective certificate.
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63.— (1) Where a creditor is aggrieved by the issue of a protective certificate that creditor may within 14 days of the giving of notice of the issue of the protective certificate to that creditor apply to the appropriate court for an order directing that the protective certificate shall not apply to that creditor.
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(2)A creditor who brings an application under subsection (1) shall give notice to the Insolvency Service and the relevant personal insolvency practitioner and to such other persons as the court may direct of that fact, and the application shall be made in such form as is provided for in rules of court.
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(3)In determining an application under this section the court shall not make an order directing that the protective certificate shall not apply to that creditor unless it is satisfied that— (a) not making such an order would cause irreparable loss to the creditor which would not otherwise occur, and (b) no other creditor to whom notice of the protective certificate has been given would be unfairly prejudiced.
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(4)In determining the costs of the application the court shall have regard to the objective that all the parties to such an application should bear their own costs unless to do so would cause a serious injustice to the parties to the application.
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(5)Where the court makes an order under this section, the court shall, unless it considers that there are good reasons not to do so, direct the creditor to hold any moneys or other assets recovered in trust for the benefit of the other creditors to whom the protective certificate applies, pending a further direction on the matter by the court.
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(6)A hearing under subsection (1) shall be held with all due expedition.
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Actions to be taken by personal insolvency practitioner following issue of protective certificate.
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64.— (1) Where a protective certificate has been issued, the personal insolvency practitioner shall as soon as practicable thereafter— (a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Debt Settlement Arrangement and, subject to section 67
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(2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement, (b) consider any submissions made by creditors in accordance with paragraph (a) regarding the debts and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, including any submission made by a creditor with respect to previous or existing offers of arrangements made by the creditor to or with the debtor, and (c) make a proposal for a Debt Settlement Arrangement in respect of the debts concerned.
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(2)(a) A personal insolvency practitioner may in any case request a creditor to file a proof of debt and the debt shall be proved in the same manner as a debt of a bankrupt is proved under the Bankruptcy Act 1988 and, subject to subsection (3), paragraphs 1 to 22 of the First Schedule of that Act shall apply with all necessary modifications to the proof of such debts. (b) Subject to paragraph (c), a creditor who does not comply with a request under paragraph (a) is not entitled to— (i) vote at a meeting referred to in section 72 or 82 , or (ii) share in any distribution that may be made under the Debt Settlement Arrangement concerned. (c) Where a creditor to whom paragraph (b) applies files a proof of debt in the manner specified in paragraph (a), paragraph (b) shall cease to apply, but without prejudice to anything done while that paragraph applied.
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(3)In applying the First Schedule of the Bankruptcy Act 1988 to proof of debts under this section— (a) a reference in that Schedule to the Court and the Official Assignee shall be read as a reference to the personal insolvency practitioner, and (b) a reference to a bankrupt shall be read as the reference to the debtor to whom the proposal for a Debt Settlement Arrangement relates.
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Mandatory requirements concerning Debt Settlement Arrangement.
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65.— (1) Subject to the mandatory requirements referred to in subsection (2), the terms of a Debt Settlement Arrangement shall be those which are agreed to by the debtor and, subject to this Chapter, approved by a majority of the debtor’s creditors in accordance with this Chapter.
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(2)The mandatory requirements referred to in subsection (1) are: (a) the maximum duration of a Debt Settlement Arrangement shall be 60 months but a Debt Settlement Arrangement may provide that this period may be extended for a further period of not more than 12 months in such circumstances as are specified in the terms of the Debt Settlement Arrangement; (b) where the debtor performs all of his or her obligations specified in a Debt Settlement Arrangement, he or she shall stand discharged from the remainder of the debts covered by the Debt Settlement Arrangement; (c) a Debt Settlement Arrangement shall not require the debtor to sell any of his or her assets that are reasonably necessary for the debtor’s employment, business or vocation unless the debtor explicitly consents to such sale; (d) a Debt Settlement Arrangement shall not contain any terms which would require the debtor to make payments of such an amount that the debtor would not have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants; (e) a Debt Settlement Arrangement shall— (i) make provision for the costs and outlays of the personal insolvency practitioner which relate to the matters referred to in sections 48 to 53 and this Chapter and to the ongoing administration of the Arrangement, (ii) indicate the likely amount of the fees, costs and outlays to be incurred, or where this is not practicable, the basis on which those fees, costs and outlays will be calculated, and (iii) specify the person or persons by whom those fees, costs and charges are payable and the manner in which they have been or are to be paid; (f) a Debt Settlement Arrangement shall make provision for the manner in which the debtor’s debts are to be treated in the event of the death or mental incapacity of the debtor; (g) a Debt Settlement Arrangement shall not require that the debtor dispose of his or her interest in his or her principal private residence or to cease to occupy such residence unless the provisions of section 69
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(3)apply; (h) a Debt Settlement Arrangement shall provide that the circumstances of the debtor be reviewed by the personal insolvency practitioner at regular intervals which are specified in the Arrangement (which intervals are not greater than 12 months) during the currency of the Debt Settlement Arrangement; (i) a Debt Settlement Arrangement shall provide that the review referred to in paragraph (h) shall include the preparation by the debtor of a new Prescribed Financial Statement, a copy of which together with a statement by the personal insolvency practitioner as to whether he or she considers that statement to be complete and accurate, shall be sent by the personal insolvency practitioner to each creditor; (j) the terms of a Debt Settlement Arrangement shall specify the circumstances where the personal insolvency practitioner shall be obliged to propose a variation of the Debt Settlement Arrangement in accordance with section 82 .
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(3)The Insolvency Service may publish a Code of Practice providing guidance on any of the matters set out in subsection (2).
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(4)For the purposes of subsection (2)(d), and without prejudice to subsection (3), in determining whether a debtor would have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants under the Debt Settlement Arrangement, regard shall be had to any guidelines issued under section 23 .
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Debt Settlement Arrangement: Non-exhaustive list of matters for possible inclusion.
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66.— (1) Subject to the provisions of this Act, a proposal for a Debt Settlement Arrangement may incorporate one or more of the options in subsection (2) with respect to payments to creditors.
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(2)The terms of a proposal for a Debt Settlement Arrangement may include any one or more of the following: (a) a lump sum payment to creditors, whether provided from the debtor’s own resources or from the resources of other persons; (b) a payment arrangement with creditors; (c) an agreement by the debtor to transfer some or all of the debtor’s property to a person (who may be the personal insolvency practitioner) to hold the property in trust for the benefit of the creditors; (d) a transfer of specified assets of the debtor to creditors generally or to a specified creditor; (e) a sale of specified assets of the debtor by the personal insolvency practitioner and the payment of the proceeds of such sale to creditors.
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(3)Unless provision is otherwise made in the Debt Settlement Arrangement, and subject to section 67 , the arrangement shall provide for payments to creditors to be made on a pari passu basis, and where so otherwise provided the Debt Settlement Arrangement shall specify the reasons for such provision being made.
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(4)Unless provision is otherwise made in the Debt Settlement Arrangement, where an Arrangement provides for payments to a creditor to whom section 58 applies that are greater than the payments that creditor would receive if such payments were made on a pari passu basis, the fees, costs and charges referred to in section 65
\n
(2)(e) shall be payable by that creditor in proportion to the payments received by him or her.
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(5)The payment of moneys or the performance of obligations provided for by a Debt Settlement Arrangement may be secured by a charge or a guarantee given by the debtor or a charge or guarantee given by a person other than the debtor.
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(6)Subject to the provisions of this Act, the terms of a Debt Settlement Arrangement may include provisions relating to payments other than those specified in this section.
\n
Preferential debts in Debt Settlement Arrangement.
\n
67.— (1) Unless the creditor concerned otherwise agrees in writing and provision is so made in the terms of the Debt Settlement Arrangement, a preferential debt shall, subject to subsection (3), be paid in priority by the debtor and where those debts are to be paid in priority the provisions of section 81 of the Bankruptcy Act 1988 shall apply with all necessary modifications.
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(2)In notifying creditors of the issue of a protective certificate, the personal insolvency practitioner shall indicate that any creditor who considers some or all of his or her debt to be a preferential debt is required to furnish evidence of the circumstances of how that debt or part of that debt is claimed to be a preferential debt within such reasonable period as may be specified, and that in the absence of such evidence, the proposal for a Debt Settlement Arrangement may be prepared on the basis that the debt concerned is not a preferential debt.
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(3)Where a creditor fails to satisfy the personal insolvency practitioner that his or her debt is a preferential debt, the debt shall be treated as not being a preferential debt for the purposes of a Debt Settlement Arrangement.
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(4)In this Chapter, “preferential debt” means a debt which, if the debtor concerned were a bankrupt would be a debt— (a) that by virtue of section 81 of the Bankruptcy Act 1988 is to be paid in priority to all other debts, or (b) that by virtue of any other statutory provision is to be included among such debts.
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Secured creditors and Debt Settlement Arrangement.
\n
68.— (1) Subject to this section and section 62 , nothing in this Chapter affects the right of a secured creditor of the debtor to enforce or otherwise deal with his or her security.
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(2)A secured creditor of the debtor may not participate in a Debt Settlement Arrangement with respect to a secured debt.
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(3)Subsection (2) shall not operate to prevent the debtor or the personal insolvency practitioner from liaising or sharing information (including a copy of the debtor’s Prescribed Financial Statement and information relating to a proposed or existing Debt Settlement Arrangement) with a secured creditor in connection with a proposed or existing Debt Settlement Arrangement.
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(4)For the avoidance of doubt, a secured creditor shall not be deemed to participate in or otherwise be bound by a Debt Settlement Arrangement as a result of entering into an agreement with the debtor to vary the terms of the secured debt following contact between the secured creditor and debtor, or as applicable, the personal insolvency practitioner as referred to in subsection (3) (including, without limitation, any variation of the terms of the secured debt that would reduce the amounts payable by the debtor in respect of the secured debt for the duration of the Debt Settlement Arrangement).
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Principal private residence in Debt Settlement Arrangement.
\n
69.— (1) In formulating a proposal for a Debt Settlement Arrangement a personal insolvency practitioner shall, insofar as reasonably practicable, and having regard to the matters referred to in subsection (2), formulate the proposal on terms that will not require the debtor to— (a) dispose of an interest in, or (b) cease to occupy, all or a part of his or her principal private residence and the personal insolvency practitioner shall consider any appropriate alternatives.
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(2)The matters referred to in subsection (1) are— (a) the costs likely to be incurred by the debtor by remaining in occupation of his or her principal private residence (including rent, mortgage loan repayments, insurance payments, owners’ management company service charges and contributions, taxes or other charges relating to ownership or occupation of the property imposed by or under statute, and necessary maintenance in respect of the principal private residence), (b) the debtor’s income and other financial circumstances as disclosed in the Prescribed Financial Statement, (c) the ability of other persons residing with the debtor in the principal private residence to contribute to the costs referred to in paragraph (a), and (d) the reasonable living accommodation needs of the debtor and his or her dependants and having regard to those needs the cost of alternative accommodation (including the costs which would necessarily be incurred in obtaining such accommodation).
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(3)Where— (a) the debtor confirms in writing to the personal insolvency practitioner that the debtor does not wish to remain in occupation of his or her principal private residence; or (b) the personal insolvency practitioner, has, having discussed the issue with the debtor, formed the opinion that, taking account of the matters referred to in subsection (2), the costs of continuing to reside in the debtor’s principal private residence are disproportionately large, the personal insolvency practitioner shall not be required to formulate the proposal for a Debt Settlement Arrangement on terms that will not require the debtor to cease to occupy his or her principal private residence.
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(4)A Debt Settlement Arrangement shall not contain terms providing for a disposal of the debtor’s interest in the principal private residence unless: (a) the debtor has obtained independent legal advice in relation to such disposal or, having been advised by the personal insolvency practitioner to obtain such legal advice, has declined to do so; and (b) to the extent that the provisions of the Family Home Protection Act 1976 or the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 apply to the property, all relevant provisions of those Acts are complied with.
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Debt Settlement Arrangement: Calling of creditors’ meeting.
\n
70.— (1) Where a personal insolvency practitioner has prepared a proposal for a Debt Settlement Arrangement and the debtor has consented to that proposal and the calling of a creditors’ meeting, the personal insolvency practitioner shall arrange for the holding of a meeting of the creditors of the debtor for the purpose of considering the proposal for a Debt Settlement Arrangement.
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(2)When calling a creditors’ meeting under this section, the personal insolvency practitioner shall do so in accordance with any regulations under section 74 and, in any case, shall— (a) give each creditor at least 14 days written notice of the meeting and the date on which, and time and place at which, the meeting will be held, (b) ensure that the notice referred to in paragraph (a) is accompanied by a copy of each of the documents referred to in section 71 , and (c) lodge a copy of the notice referred to in paragraph (a) and the documents referred to in section 71 with the Insolvency Service.
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(3)Where a creditors’ meeting referred to in subsection (1) does not take place before the expiry of the protective certificate, the Debt Settlement Arrangement procedure shall be deemed to have come to an end.
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Debt Settlement Arrangement: Documents to be given to creditors and the Insolvency Service when calling a creditors’ meeting.
\n
71.— (1) The documents referred to in section 70
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(2)(b) are— (a) a completed statement of the debtor’s financial affairs, showing the debtor’s position of insolvency, in the form of the Prescribed Financial Statement; (b) a document containing the terms of the proposal for a Debt Settlement Arrangement; (c) a statement by the personal insolvency practitioner to the effect that— (i) he or she has been instructed by the debtor to act as personal insolvency practitioner in connection with the Debt Settlement Arrangement procedure, he or she has consented to so act and that he or she is a person entitled to act as a personal insolvency practitioner, (ii) he or she has advised the debtor in accordance with section 52 of the debtor’s options for managing the debtor’s financial difficulties, (iii) he or she is not aware of any reasonable grounds to believe that the information contained in the debtor’s Prescribed Financial Statement is not complete and accurate, and (iv) he or she is of the opinion that the debtor satisfies the eligibility criteria for the proposal of a Debt Settlement Arrangement specified in section 57 ; (d) a report of the personal insolvency practitioner— (i) describing the outcome for creditors and, having regard to the financial circumstances of the debtor, whether or not the proposed Debt Settlement Arrangement represents a fair outcome for the creditors, and indicating, where relevant, how that financial outcome for creditors, (whether individually or as a member of a class of creditors) under the terms of the proposal is likely to be better than the estimated financial outcome for such creditors if the debtor were to be adjudicated a bankrupt (having regard to, amongst other things, the estimated costs of the bankruptcy process), and (ii) indicating whether or not he or she is of the opinion that the debtor is reasonably likely to be able to comply with the terms of the proposed Debt Settlement Arrangement.
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(2)Where a debtor’s financial position has materially changed in the period between the completion by him or her of a Prescribed Financial Statement under section 50 and the sending of the notice under section 70
\n
(2)— (a) the debtor shall inform the personal insolvency practitioner of that fact, and (b) the personal insolvency practitioner shall, if he or she considers that the change merits the completion of a new Prescribed Financial Statement, assist the debtor in completing such a new Statement, which shall accompany the notice under section 70
\n
(2).
\n
Debt Settlement Arrangement: Conduct of creditors’ meeting.
\n
72.— (1) A creditors’ meeting called by the personal insolvency practitioner for the purpose of approving a proposal for a Debt Settlement Arrangement given to the creditors under section 70
\n
(3)shall be conducted in accordance with section 74 and any regulations made under that section.
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(2)The personal insolvency practitioner may, where he or she believes it is in the interests of obtaining approval of a proposed Debt Settlement Arrangement by the creditors at the meeting, adjourn the meeting and, with the consent in writing of the debtor, shall prepare an amended proposal for a Debt Settlement Arrangement.
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(3)Where the personal insolvency practitioner prepares an amended proposal for a Debt Settlement Arrangement pursuant to subsection (2) he or she shall— (a) notify the debtor of the date on which, and time and place at which, the adjourned meeting will be held, (b) at least 7 days before the day of the adjourned meeting, unless all of the creditors agree in writing to receive a shorter period of notice, notify each creditor of the date on which, and time and place at which, the adjourned meeting will be held, (c) ensure that the notices referred to in paragraphs (a) and (b) are accompanied by a copy of the amended proposal, and (d) lodge a copy of the notice referred to in paragraph (b) and a copy of the amended proposal with the Insolvency Service.
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(4)An adjournment for the purpose of preparing an amended proposal for a Debt Settlement Arrangement pursuant to subsection (2) may occur once only in the course of the period of validity of a protective certificate (including any extension of such period).
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(5)Subject to subsection (6), creditors at a meeting under this section, having considered a proposal for a Debt Settlement Arrangement shall vote, in accordance with section 73 , either by voting in favour or against the approval of the proposed Debt Settlement Arrangement.
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(6)Subject to subsection (2), the proposal for a Debt Settlement Arrangement may, before the proposal has been voted upon, be subject to a proposal for a modification where the modification addresses an ambiguity or rectifies an error in the proposed Debt Settlement Arrangement and where— (a) the modification has been proposed by a creditor or the personal insolvency practitioner, and (b) the debtor gives his or her written consent to the modification.
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(7)Where, on the taking of a vote under subsection (5), the proposal is not approved in accordance with section 73 , the Debt Settlement Arrangement procedure shall be deemed to have come to an end, and the protective certificate issued under section 61 shall cease to have effect.
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(8)Where only one creditor is entitled to vote at the creditors’ meeting (whether in respect of one or more debts), the requirement to hold a creditors’ meeting may be satisfied where the creditor concerned notifies the personal insolvency practitioner in writing of that creditor’s approval or otherwise of the proposal for a Debt Settlement Arrangement.
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Debt Settlement Arrangement: Voting at creditors’ meeting.
\n
73.— (1) A vote held under section 72
\n
(5)shall be held in accordance with this section and regulations under section 74 .
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(2)The voting rights exercisable by a creditor at a creditors’ meeting shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.
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(3)A creditor to whom a preferential debt is owed shall not be entitled to vote in respect of that debt in favour of a proposal for a Debt Settlement Arrangement at a creditors’ meeting unless that creditor has furnished to the personal insolvency practitioner a waiver in writing of the creditor’s right to have that debt treated as a preferential debt.
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(4)A creditor who is a connected person of the debtor may not vote in favour of a proposal for a Debt Settlement Arrangement at a creditors’ meeting.
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(5)Subject to any regulations made under section 74 relating to proxies, for the purposes of this section, only the person who appears to the personal insolvency practitioner to be the owner of the debt (or an agent acting on behalf of that person) shall be entitled to receive notices required to be sent to a creditor under this Chapter or to vote at the creditors’ meeting.
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(6)A proposal for a Debt Settlement Arrangement shall be considered as having been approved by a creditors’ meeting held under this Chapter where a majority of creditors representing not less than 65 per cent in value of the total of the debtor’s debts due to the creditors participating in the meeting and voting have voted in favour of the proposal.
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(7)Where no creditor votes, the proposed Debt Settlement Arrangement shall be deemed to have been approved under this section.
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Debt Settlement Arrangement: Procedures for the conduct of creditors’ meetings.
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74.— (1) The Minister may make regulations relating to the holding of creditors’ meetings under this Chapter, and without prejudice to the generality of the Minister’s power under this section, such regulations may provide for— (a) the holding of a meeting in circumstances where not all of the creditors are present in the same venue, (b) the voting process including providing for the communication of creditors’ votes to the personal insolvency practitioner by telephony or electronically, and (c) appointment of proxies to vote at such meetings.
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(2)The venue for the holding of a creditors’ meeting shall be situated within the State.
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(3)The period of notice of the meeting of creditors may be waived or abridged where the consent of all the creditors to such waiver or abridgement is given in writing.
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Steps to be taken by personal insolvency practitioner following approval of proposal for Debt Settlement Arrangement.
\n
75.— (1) Where a Debt Settlement Arrangement is approved at a creditors’ meeting in accordance with section 73 , the personal insolvency practitioner shall as soon as practicable after the meeting has concluded notify the Insolvency Service and each creditor concerned and enclose with that notification— (a) a certificate with the result of the vote taken at the creditors’ meeting, identifying the number of votes, in value of the creditors present and voting, in favour and against the proposed Debt Settlement Arrangement, and (b) a copy of the approved Debt Settlement Arrangement.
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(2)The personal insolvency practitioner shall, in addition to the documents referred to in subsection (1) also send a notice to each creditor indicating that he or she may make objection to the coming into effect of the Debt Settlement Arrangement by lodging a notice of objection with the appropriate court, within 14 days of the date of the sending of that notice.
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(3)A creditor may lodge a notice of objection with the appropriate court within 14 days of the date of the sending by the personal insolvency practitioner of the notice referred to in subsection (2) and shall at the same time send a copy of the notice of objection to— (a) the Insolvency Service, and (b) the personal insolvency practitioner.
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Steps to be taken by Insolvency Service following notification of approval of Debt Settlement Arrangement by personal insolvency practitioner under section 75 .
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76.— (1) On receipt of a notification by the personal insolvency practitioner pursuant to section 75
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(1), the Insolvency Service shall record the approval in the Register of Debt Settlement Arrangements, and notify the appropriate court and furnish to that court a copy of the Debt Settlement Arrangement.
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(2)Where the notification of the personal insolvency practitioner is received by the Insolvency Service before the expiry of the period of the protective certificate, such protective certificate shall continue in force until the Debt Settlement Arrangement comes into effect or all objections lodged with the appropriate court pursuant to section 75
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(3)have been determined by the court.
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Determination of objection lodged under section 75 .
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77.— (1) The grounds on which objection may be made to the coming into effect of the Debt Settlement Arrangement are those specified in section 87 .
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(2)The hearing of an objection lodged under section 75
\n
(3)shall be heard with all due expedition.
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(3)Where the appropriate court upholds the objection to the Debt Settlement Arrangement, the Debt Settlement Arrangement procedure shall be deemed to have come to an end, and the protective certificate issued under section 61 shall cease to have effect.
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Coming into effect of Debt Settlement Arrangement.
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78.— (1) Where— (a) no objection is lodged by a creditor with the appropriate court within 14 days of the giving of the notice referred to in section 75 , or (b) an objection is lodged with the appropriate court and the matter is determined by the court on the basis that the objection should not be allowed, the appropriate court shall proceed to consider, in accordance with this section, whether to approve the coming into effect of the Debt Settlement Arrangement.
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(2)For the purposes of its consideration under subsection (1), the appropriate court shall consider the copy of the Debt Settlement Arrangement furnished to it under section 76
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(1)and, subject to subsection (3)— (a) shall approve the coming into effect of the Arrangement, if satisfied that the— (i) eligibility criteria specified in section 57 have been satisfied, (ii) mandatory requirements referred to in section 65
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(2)have been complied with, (iii) Debt Settlement Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than a permitted debt) or a secured debt or otherwise affect such a debt, and (iv) requisite percentage of creditors referred to in section 73
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(6)has approved the proposal for a Debt Settlement Arrangement, and (b) if not so satisfied, shall refuse to approve the coming into effect of the Debt Settlement Arrangement.
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(3)The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
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(4)A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
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(5)For the purposes of subsection (2), the court may accept— (a) a certificate issued by the Insolvency Service certifying that the eligibility criteria specified in section 57 have been satisfied as evidence that such eligibility criteria have been satisfied, and (b) the certificate issued by the personal insolvency practitioner concerned pursuant to section 75
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(1)as evidence that the requisite percentage of creditors referred to in section 73
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(6)has approved the proposal for a Debt Settlement Arrangement.
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(6)The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court— (a) approves or refuses to approve the coming into effect of the Debt Settlement Arrangement under this section, or (b) decides to hold a hearing referred to in subsection (3).
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(7)On receipt of a notification under subsection (6) of the approval of the coming into effect of the Debt Settlement Arrangement, the Insolvency Service shall register the Debt Settlement Arrangement in the Register of Debt Settlement Arrangements.
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(8)The Debt Settlement Arrangement shall come into effect upon being registered in the Register of Debt Settlement Arrangements.
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Effect of Debt Settlement Arrangement.
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79.— (1) A Debt Settlement Arrangement having been registered in the Register of Debt Settlement Arrangements shall have effect according to its terms and remain in effect until— (a) it is completed in accordance with its terms or the terms of any variation made, or (b) it is terminated in accordance with this Chapter.
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(2)While a Debt Settlement Arrangement is in effect, the following shall be parties to it and, subject to this Act, shall be bound by its terms— (a) the debtor, and (b) in respect of every specified debt, the creditor concerned.
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(3)Where a Debt Settlement Arrangement is in effect, a creditor who is bound by it shall not, in relation to a specified debt— (a) initiate any legal proceedings; (b) take any step to prosecute legal proceedings already initiated; (c) take any step to secure or recover payment; (d) execute or enforce a judgment or order of a court or tribunal against the debtor; (e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor has security over the goods; (f) contact the debtor regarding payment of the specified debt otherwise than at the request of the debtor; (g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that a Debt Settlement Arrangement is in effect— (i) terminate or amend that agreement, or (ii) claim an accelerated payment under that agreement.
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(4)Where a Debt Settlement Arrangement is in effect, a creditor of that debtor shall not apply for the issue of a summons under section 8 of the Bankruptcy Act 1988 or present a petition to have the debtor concerned adjudicated a bankrupt in respect of a debt covered by the Debt Settlement Arrangement.
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(5)Where a Debt Settlement Arrangement is in effect, and a creditor of that debtor has applied for the issue of a summons under section 8 of the Bankruptcy Act 1988 or has presented a petition to have the debtor concerned adjudicated a bankrupt in respect of a debt covered by the Debt Settlement Arrangement, the creditor shall not proceed with the summons or the petition.
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(6)Nothing in subsections (3) and (4) shall operate to prevent a creditor taking the actions referred to in those subsections as respects a person who has jointly contracted with the debtor or is jointly liable with the debtor to the creditor and that other person may sue or be sued in respect of the contract without joining the debtor.
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(7)Subsection (6) does not apply where a Debt Settlement Arrangement is also in effect as respects the other person.
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(8)In reckoning any period of time for the purpose of any applicable limitation period in relation to any proceedings or process to which this section applies (including any limitation period under the Statute of Limitations 1957), the period in which the Debt Settlement Arrangement is in effect shall be disregarded.
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(9)The period for which any judgment against the debtor in relation to a debt which is the subject of a Debt Settlement Arrangement has effect (whether under statute or rule of court) shall, subject to the provisions of this Act be extended by the period that the Debt Settlement Arrangement is in effect.
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(10)Notwithstanding subsections (3) and (4), the fact that a Debt Settlement Arrangement is in effect in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) or (4) as respects another person who has guaranteed the specified debts concerned.
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(11)The Deeds of Arrangement Act 1887 does not apply to a Debt Settlement Arrangement.
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(12)In this section, “specified debt” means a debt that is specified in a Debt Settlement Arrangement as being subject to that Arrangement.
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Operation of terms of Debt Settlement Arrangement.
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80.— (1) Subject to the provisions of this section, a Debt Settlement Arrangement shall operate according to the terms of that Arrangement and a debtor or creditor who is party to that Arrangement shall perform his or her obligations in accordance with its terms.
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(2)Unless otherwise provided by the Debt Settlement Arrangement, payments to be made to creditors under the terms of the Arrangement shall be made by the debtor through the personal insolvency practitioner concerned.
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(3)The personal insolvency practitioner shall transmit payments received to each of the creditors in the agreed proportion on a timely basis.
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(4)The personal insolvency practitioner shall maintain regular contact with the debtor and request such reports and conduct such reviews as may be required, but such review shall in any event be carried out at least once in every period of 12 months.
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(5)The personal insolvency practitioner shall monitor implementation of the Arrangement and where the debtor has defaulted or appears likely to default in his or her obligations under the Arrangement, discuss the matter with the debtor.
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(6)Where the circumstances of the debtor have changed in a material respect the personal insolvency practitioner shall provide information to the debtor regarding his or her right or obligation to initiate an application to vary the Arrangement in accordance with section 82 .
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(7)Where the circumstances of a debtor have changed to such an extent that a variation in the terms of an Arrangement is appropriate, the personal insolvency practitioner shall take the necessary steps to initiate a variation of the Arrangement under section 82 .
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(8)The personal insolvency practitioner shall deal with the property of the debtor in accordance with the Debt Settlement Arrangement.
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(9)The personal insolvency practitioner shall respond in a timely manner to requests for information regarding the operation of the Arrangement from— (a) the Insolvency Service, (b) the debtor, and (c) the creditors.
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(10)The personal insolvency practitioner shall maintain complete and accurate records of account of the moneys received from the debtor and the moneys disbursed to the creditors and such moneys shall while in the possession and control of the personal insolvency practitioner be maintained in an account in the State with a bank authorised to carry on business in the State, which account is used solely for the purposes of receiving payments from the debtor and transmitting such payments to creditors (after the deduction of any fees, costs and outlays payable to the personal insolvency practitioner permitted to be made under this Act and in accordance with the Debt Settlement Arrangement).
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General duties and obligations of debtor arising under Chapter 3.
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81.— (1) A debtor who participates in any process under this Chapter is under an obligation to act in good faith, and in his or her dealings with the personal insolvency practitioner concerned to make full disclosure to that practitioner of all of his or her assets, income and liabilities and of all other circumstances that are reasonably likely to have a bearing on the ability of the debtor to make payments to his or her creditors.
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(2)A debtor who participates in any part of the process of applying for or operating a Debt Settlement Arrangement shall co-operate fully in the process, and in particular comply with any reasonable request from the personal insolvency practitioner to provide assistance, documents and information necessary for the application of the process to the debtor’s case or the carrying out of the personal insolvency practitioner’s functions, including any debt, tax, employment, business, social welfare or other financial records.
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(3)A debtor in respect of whom a Debt Settlement Arrangement is in effect is under an obligation to inform the personal insolvency practitioner as soon as reasonably practicable of any material change in the debtor’s circumstances, particularly an increase or decrease in the extent of the debtor’s assets, liabilities or income, which would affect the debtor’s ability to make repayments under the Debt Settlement Arrangement.
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(4)A debtor in respect of whom a Debt Settlement Arrangement is in effect shall not, either alone or with any other person, obtain credit in an amount of more than €650 from any person without informing that person that he or she is subject as a debtor to a Debt Settlement Arrangement.
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(5)A debtor in respect of whom a Debt Settlement Arrangement is in effect shall not transfer, lease, grant security over, or otherwise dispose of any interest in property above a prescribed value otherwise than in accordance with the terms of the Debt Settlement Arrangement.
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(6)A debtor shall inform the personal insolvency practitioner as soon as reasonably practicable after becoming aware of any inaccuracy or omission in the debtor’s statement of affairs based on the Prescribed Financial Statement.
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(7)A debtor who participates in a Debt Settlement Arrangement shall not pay to creditors any additional payments separate to the Debt Settlement Arrangement in respect of debts covered in the Debt Settlement Arrangement.
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Variation of a Debt Settlement Arrangement.
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82.— (1) Unless its terms provide otherwise, a Debt Settlement Arrangement may be varied in accordance with this section.
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(2)The debtor’s written consent shall be required to any variation of a Debt Settlement Arrangement provided that any unreasonable refusal by the debtor to consent to a variation shall be subject to challenge in accordance with section 87 .
\n
(3)A debtor shall be considered to be acting reasonably where the debtor refuses to consent to a variation of a Debt Settlement Arrangement where that variation would require the debtor— (a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made: (i) income tax; (ii) social insurance contributions; (iii) payments made by him or her in respect of excluded debts; (iv) payments made by him or her in respect of excludable debts that are not permitted debts; (v) such other levies and charges on income as may be prescribed, or (b) to make a payment amounting to more than 50 per cent of the value of any property acquired by the debtor after the coming into effect of the Debt Settlement Arrangement unless receipt of that property had been anticipated by the terms of that Arrangement.
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(4)Where it appears to the personal insolvency practitioner concerned that there has been a material change in the debtor’s circumstances which would affect his or her ability to make repayments under the Debt Settlement Arrangement, the personal insolvency practitioner (whether on his or her own initiative or at the request of a creditor) shall call a meeting of creditors to be held in accordance with this section.
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(5)When calling a creditors’ meeting to be held under this section, the personal insolvency practitioner shall— (a) give each creditor at least 14 days written notice of the meeting and the date on which, and the time and place at which, the meeting will be held, (b) ensure that the notice referred to in paragraph (a) is accompanied by a written proposal for the variation of the Debt Settlement Arrangement, and (c) lodge a copy of the notice referred to in paragraph (a) and the proposal referred to in paragraph (b) with the Insolvency Service.
\n
(6)A creditors’ meeting under this section shall be conducted in accordance with regulations under section 74 .
\n
(7)Subject to subsection (8), creditors, at a creditors’ meeting under this section, shall vote, in accordance with section 73 — (a) in favour of the approval of the proposal for the variation, or (b) against the approval of the proposal for the variation.
\n
(8)For the purposes of subsection (7), the voting rights exercisable by a creditor at a creditors’ meeting under this section shall be proportionate to the amount of the debt due by the debtor to the creditor on the date on which the vote takes place.
\n
(9)Where the variation of a Debt Settlement Arrangement is approved under subsection (7), the personal insolvency practitioner shall as soon as practicable notify the Insolvency Service and each creditor concerned of the fact, and enclose with that notification a copy of the Debt Settlement Arrangement as varied.
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(10)On receipt of a notification under subsection (9), the Insolvency Service shall record the variation in the Register of Debt Settlement Arrangements.
\n
(11)A variation to a Debt Settlement Arrangement shall take effect immediately upon its being recorded under subsection (10), and shall remain in effect until the Debt Settlement Arrangement, as varied— (a) is completed in accordance with its terms, (b) is terminated in accordance with this Chapter, or (c) is further varied in accordance with this section.
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(12)A variation to a Debt Settlement Arrangement shall, while it is in effect, be binding upon the debtor and each creditor who was entitled to vote at the meeting held under this section, regardless of whether such creditor voted to approve that variation.
\n
(13)References in this Chapter to a Debt Settlement Arrangement include references to such an Arrangement as varied in accordance with this section.
\n
Application to appropriate court to have Debt Settlement Arrangement terminated.
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83.— (1) Without prejudice to section 87 , a creditor or a personal insolvency practitioner may, as respects a Debt Settlement Arrangement, at any time during which the arrangement concerned is in effect, apply to the appropriate court to have that Debt Settlement Arrangement terminated, and such application shall be limited to the following grounds: (a) a material inaccuracy or omission exists in the debtor’s Prescribed Financial Statement, which causes a material detriment to the creditor; (b) the debtor, when the Debt Settlement Arrangement was proposed, did not satisfy the eligibility criteria specified in section 57 ; (c) the debtor did not comply with the duties and obligations imposed on him or her under the Debt Settlement Arrangement process; (d) the debtor has since the coming into effect of the Debt Settlement Arrangement committed an offence under this Act; (e) the debtor is in arrears with his or her payments for a period of not less than 3 months; (f) the debtor has failed to carry out any action necessary to enable a term of the Debt Settlement Arrangement to have effect; (g) the debtor has unreasonably refused to consent to a variation of the Debt Settlement Arrangement.
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(2)For the purposes of subsection (1)(e), a debtor is in arrears with his or her payments for a period of not less than 3 months where— (a) at the beginning of the 3 month period ending immediately before the day on which the application was made, one or more than one payment in respect of the debts became due and payable by the debtor under the Debt Settlement Arrangement, and (b) at no time during that 3 month period were any obligations in respect of those payments discharged.
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(3)On hearing an application under subsection (1), the appropriate court may— (a) dismiss the application, (b) terminate the Debt Settlement Arrangement, or (c) order the personal insolvency practitioner to propose the variation of the Arrangement in accordance with section 82 .
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Debt Settlement Arrangement deemed to have failed after 6 month arrears default.
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84.— (1) Where the debtor is in arrears with his or her payments for a period of 6 months the Debt Settlement Arrangement shall be deemed to have failed and shall terminate where the personal insolvency practitioner notifies the Insolvency Service and the debtor of such default.
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(2)Where the Insolvency Service receives a notification of default referred to in subsection (1), it shall record the failure of the Debt Settlement Arrangement in the Register of Debt Settlement Arrangements.
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(3)For the purposes of subsection (1), a debtor is in arrears with his or her payments for a period of 6 months on a given date if— (a) at the beginning of the 6 month period ending immediately before that date, one or more than one payment in respect of a debt became due and payable by the debtor under the Debt Settlement Arrangement, and (b) at no time during that 6 month period were any obligations in respect of those payments discharged.
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Effect of premature termination of Debt Settlement Arrangement on debts.
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85.— (1) Subject to subsection (2), where a Debt Settlement Arrangement has been deemed to have failed or has terminated under this Chapter, the debtor shall thereupon be liable in full for all debts covered by the Debt Settlement Arrangement (including any arrears, charges and interest that have accrued during the continuance of the Debt Settlement Arrangement but excluding any amounts paid in respect of those debts during the continuance of the Debt Settlement Arrangement), unless: (a) the terms of the Debt Settlement Arrangement provide otherwise; or (b) the appropriate court has made an order otherwise.
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(2)Subsection (1) has effect without prejudice to the validity of any act done or property disposed of in accordance with the Debt Settlement Arrangement.
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Successful completion of Debt Settlement Arrangement.
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86.— (1) Upon the expiration of the Debt Settlement Arrangement, and where the debtor concerned has complied with his or her obligations under the Debt Settlement Arrangement, the personal insolvency practitioner shall notify the debtor, creditors and the Insolvency Service.
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(2)Where the debtor has complied with his or her obligations under the Debt Settlement Arrangement, the debtor stands discharged from the debts specified in the Debt Settlement Arrangement.
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(3)Where the Insolvency Service receives the notice referred to in subsection (1), it shall record the successful completion of the Debt Settlement Arrangement in the Register of Debt Settlement Arrangements.
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Grounds of challenge by creditor to coming into effect of Debt Settlement Arrangement.
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87.— The grounds on which a Debt Settlement Arrangement may be challenged by a creditor under section 77 are, without prejudice to section 83 , limited to the following matters: (a) that the debtor has by his or her conduct within the 2 years prior to the issue of the protective certificate under section 61 arranged his or her financial affairs primarily with a view to being or becoming eligible to apply for a Debt Settlement Arrangement or a Personal Insolvency Arrangement; (b) the procedural requirements specified in this Act were not complied with; (c) a material inaccuracy or omission exists in the debtor’s statement of affairs (based on the Prescribed Financial Statement) which causes a material detriment to the creditor; (d) the debtor, when the Debt Settlement Arrangement was proposed, did not satisfy the eligibility criteria specified in section 57 ; (e) the Debt Settlement Arrangement unfairly prejudices the interests of a creditor; (f) the debtor has committed an offence under this Act, which causes a material detriment to the creditor; (g) the debtor had entered into a transaction with a person at an undervalue within the preceding 3 years that has materially contributed to the debtor’s inability to pay his or her debts (other than any debts due to the person with whom the debtor entered the transaction at an undervalue); (h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).
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Debt Settlement Arrangement: Excessive pension contributions.
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88.— (1) Where, as respects a debtor who has entered into a Debt Settlement Arrangement which is in force, a creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement, the creditor or personal insolvency practitioner may make an application to the appropriate court for relief in accordance with this section.
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(2)The reference to the debtor having made contributions to a relevant pension arrangement shall be construed as a reference to contributions made by the debtor at any time within 3 years prior to the making of the application for a protective certificate on behalf of the debtor under section 59 .
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(3)Where the appropriate court considers that having regard in particular to the matters referred to in subsection (4) the contributions to a relevant pension arrangement were excessive it may: (a) direct that such part of the contribution concerned (less any tax required to be deducted) be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution amongst the creditors of the debtor, and (b) make such other order as the court deems appropriate, including an order as to the costs of the application.
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(4)The matters referred to in subsection (3) as respects the contributions made by the debtor to a relevant pension arrangementare: (a) whether the debtor made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the debtor made the contribution concerned; (b) whether the debtor was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the debtor or a person who as respects the debtor is a connected person could have materially influenced the creation of such obligation; (c) the amount of the contributions paid, including the percentage of total income of the debtor in each tax year concerned which such contributions represent; (d) the amount of the contributions paid, in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 59 including the percentage of total income of the debtor concerned which such contributions represent in each of those years; (e) the age of the debtor at the relevant times; (f) the percentage limits which applied to the debtor in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 59 ; and (g) the extent of provision made by the debtor in relation to any relevant pension arrangement prior to the making of the contributions concerned.
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Chapter 4
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Personal Insolvency Arrangements Personal Insolvency Arrangement: General Conditions.
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89.— (1) Subject to the provisions of this Act, a debtor who satisfies the eligibility criteria specified in section 91 may make a proposal for a Personal Insolvency Arrangement with one or more of his or her creditors in respect of the payment, satisfaction or restructuring of his or her debts.
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(2)A proposal for a Personal Insolvency Arrangement shall be made on behalf of a debtor by a personal insolvency practitioner in accordance with the provisions of this Part.
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(3)Where two or more debtors are jointly party to all of the debts to be covered by a Personal Insolvency Arrangement and each of those debtors satisfies the eligibility criteria specified in section 91 , those debtors may jointly propose a Personal Insolvency Arrangement and, unless otherwise specified, references in this Part to the“debtor” shall be construed as meaning such joint debtors.
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(4)Without prejudice to subsection (3), a Personal Insolvency Arrangement may be proposed by a debtor on the basis that it will be administered in common by a personal insolvency practitioner with one or more other Personal Insolvency Arrangements provided that, in the opinion of the personal insolvency practitioner: (a) the Personal Insolvency Arrangements can reasonably be administered in common because of the financial relationship of the debtors concerned; (b) the terms of each of the Personal Insolvency Arrangements to be administered in common specify in sufficient detail how such administration will operate, including— (i) the treatment of joint and individual assets and the treatment of joint and individual debts; (ii) whether the approval of one Personal Insolvency Arrangement is to be contingent on the approval of any other Personal Insolvency Arrangement; (iii) the effect of the failure or early termination of one Personal Insolvency Arrangement on any other Personal Insolvency Arrangement, in particular, as to whether it is a condition of each Personal Insolvency Arrangement that for it to be considered as having been successfully completed other Personal Insolvency Arrangements are also required to be successfully completed; and (iv) where a joint payment is to be received from two or more debtors, how that payment is to be apportioned between the creditors under each Personal Insolvency Arrangement.
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(5)The administration of a Personal Insolvency Arrangement in common with one or more other Personal Insolvency Arrangements in accordance with subsection (4) shall be without prejudice to the applicability of the remainder of this Part to each such Personal Insolvency Arrangement.
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(6)(a) A Personal Insolvency Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt. (b) A proposal for a Personal Insolvency Arrangement shall not include any terms that, if contained in a Personal Insolvency Arrangement that came into effect, would contravene paragraph (a).
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Personal Insolvency Arrangement permitted once only.
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90.— A debtor may enter into a Personal Insolvency Arrangement once only.
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Eligibility criteria for a Personal Insolvency Arrangement.
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91.— (1) Subject to the provisions of this section and this Chapter, a debtor shall not be eligible to make a proposal for a Personal Insolvency Arrangement unless he or she satisfies the following criteria— (a) subject to subsection (4), that the aggregate of the debts of the debtor which are secured debts is less than €3,000,000; (b) that the debtor— (i) is domiciled in the State, or (ii) within one year before the date of the application for a protective certificate has ordinarily— (I) resided in the State, or (II) had a place of business in the State; (c) that at least one of the creditors of the debtor is a secured creditor holding security over an interest in property of the debtor situate in the State (whether the interest in the property relates to real property or personal property); (d) that the debtor is insolvent; (e) that the debtor has completed a Prescribed Financial Statement and has made a statutory declaration confirming that the statement is a complete and accurate statement of the debtor’s assets, liabilities, income and expenditure; (f) that the personal insolvency practitioner has completed a statement under section 54 in respect of the debtor; (g) that the debtor has made a declaration in writing declaring that he or she has co-operated for a period of at least 6 months with his or her creditors who are secured creditors as respects the debtor’s principal private residence in accordance with any process relating to mortgage arrears operated by the secured creditors concerned which has been approved or required by the Central Bank of Ireland and which process relates to the secured debt concerned and that notwithstanding such co-operation the debtor has not been able to agree an alternative repayment arrangement with the secured creditor concerned, or that the secured creditor has confirmed to the debtor in writing the unwillingness of that secured creditor to enter into an alternative repayment arrangement; (h) that the debtor is not— (i) an undischarged bankrupt, (ii) a discharged bankrupt subject to a bankruptcy payment order, (iii) a person who is a specified debtor as respects a Debt Relief Notice which is in effect, (iv) a person who, as a debtor, is subject to a Debt Settlement Arrangement which is in effect, or (v) a person who, as a debtor, is subject to an arrangement under the control of the court under Part IV of the Bankruptcy Act 1988 ; (i) that the debtor has not— (i) been the subject of a protective certificate issued under section 95 less than 12 months prior to the date of the application for a protective certificate,
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(ii) had his or her debts discharged pursuant to a final Debt Relief Notice less than 3 years prior to the date of the application for a protective certificate, (iii) had his or her debts discharged pursuant to a Debt Settlement Arrangement less than 5 years prior to the date of the application for a protective certificate, or (iv) been discharged from bankruptcy less than 5 years prior to the date of the application for a protective certificate.
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(2)The criterion referred to in subsection (1)(g) shall not apply where the relevant personal insolvency practitioner confirms in writing that, having regard to the financial circumstances of the debtor as disclosed in the Prescribed Financial Statement completed by the debtor, it is the belief of that practitioner that if the debtor were to have entered into an alternative repayment arrangement with the secured creditor concerned of a type provided for in any process relating to mortgage arrears operated by that secured creditor (being a process approved or required by the Central Bank of Ireland) the debtor would be unlikely to become solvent within the period of 5 years commencing on the date of the personal insolvency practitioner giving that confirmation.
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(3)The criterion specified in subsection (1)(h) shall not apply where the debtor has, on notice to the Insolvency Service, made an application to the appropriate court and the court has made an order stating that it is satisfied that the current insolvency of the debtor arises by reason of exceptional circumstances or other factors which are substantially outside the control of the debtor and that it would be just to permit the debtor to make a proposal for a Personal Insolvency Arrangement.
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(4)Where all of the creditors who are secured creditors consent in writing the limit of €3,000,000 referred to in subsection (1)(a) shall not apply.
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(5)A debtor shall not be eligible to make a proposal for a Personal Insolvency Arrangement where 25 per cent or more of his or her debts (other than excluded debts) were incurred during the period of 6 months ending on the date on which an application is made under section 93 for a protective certificate.
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Creditor consent required for inclusion of excludable debt in Personal Insolvency Arrangement.
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92.— (1) An excludable debt shall be included in a proposal for a Personal Insolvency Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal.
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(2)Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Personal Insolvency Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by— (a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and (b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Personal Insolvency Arrangement.
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(3)A creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
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(4)Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Personal Insolvency Arrangement.
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(5)Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Personal Insolvency Arrangement, that creditor shall be entitled to vote at any creditors’ meeting called to consider that proposal.
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(6)Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 97
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(1)in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
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(7)An excludable debt shall not be the subject of a Personal Insolvency Arrangement unless it is a permitted debt.
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(8)In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.
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Application for protective certificate.
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93.— (1) Where a personal insolvency practitioner has been instructed pursuant to section 53 to make a proposal for a Personal Insolvency Arrangement, the personal insolvency practitioner shall notify the Insolvency Service of the debtor’s intention to make a proposal for a Personal Insolvency Arrangement and apply on behalf of the debtor for a protective certificate.
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(2)The application referred to in subsection (1) shall be in such form as may be prescribed by the Insolvency Service and shall be accompanied by the following documents: (a) the statement issued by the personal insolvency practitioner pursuant to section 54 ; (b) a document signed by the debtor confirming that he or she satisfies the eligibility criteria specified in section 91 ; (c) the statutory declaration of the debtor referred to in section 91
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(1)(g); (d) the Prescribed Financial Statement; (e) a schedule of the creditors of the debtor and the debts concerned, stating in relation to each such creditor— (i) the amount of each debt due to that creditor, (ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and (iii) such other information as may be prescribed; (f) the debtor’s written consent to— (i) the disclosure to the Insolvency Service, (ii) the processing by the Insolvency Service, and (iii) the disclosure by the Insolvency Service to creditors of the debtor concerned, of personal data of that debtor, to the extent necessary in respect of the Personal Insolvency Arrangement procedure provided for in this Chapter; and (g) the debtor’s written consent to the making of any enquiry under section 94 relating to the debtor by the Insolvency Service.
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(3)An application under this section may be withdrawn by the personal insolvency practitioner at any time prior to the issue of a protective certificate under section 95 .
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(4)Where a personal insolvency practitioner becomes aware of any inaccuracy or omission in an application under this section or any document accompanying such an application, he or she shall inform the Insolvency Service of this fact as soon as practicable and the Insolvency Service shall have regard to any information provided under this subsection for the purposes of its consideration of the application.
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Consideration by Insolvency Service of application for protective certificate.
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94.— (1) In its consideration of an application under section 93 the Insolvency Service shall be entitled to request any further information it requires from the debtor or personal insolvency practitioner and to defer further consideration of the application until such information is furnished to it.
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(2)Where a debtor or personal insolvency practitioner fails to provide the information requested by the Insolvency Service under subsection (1) within 14 days or such longer period as the Insolvency Service may permit the application shall be deemed to be withdrawn.
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(3)Subject to subsection (4), in considering the application for a protective certificate, the Insolvency Service shall make such enquiries as it considers necessary to satisfy itself: (a) that the personal insolvency practitioner is a person entitled to act as a personal insolvency practitioner; (b) having regard to the documents which are required to accompany the application for a protective certificate— (i) that the debtor satisfies the eligibility criteria for a Personal Insolvency Arrangement specified in section 91 ; and (ii) the application does not appear to be frivolous or an attempt to frustrate the efforts of creditors to recover debts due to them.
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(4)Subject to subsections (5) to (7), for the purposes of subsection (3) the Insolvency Service shall be entitled to presume that the debtor satisfies the eligibility criteria for a Personal Insolvency Arrangement specified in section 91 if the documents required to be lodged with the Insolvency Service have been so lodged and the Insolvency Service has no reason to believe that the information supplied in or in support of the application for a protective certificate is incomplete or inaccurate.
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(5)The Insolvency Service may make such enquiries as it considers necessary to verify the completeness or accuracy of any matter referred to in the Prescribed Financial Statement of the debtor or in relation to the assets, liabilities, income or expenditure of the debtor.
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(6)Without prejudice to the generality of subsection (5) the matters in respect of which the Insolvency Service may make an enquiry include the following— (a) particulars relating to bank accounts, securities or other accounts held, solely or jointly, by or for the benefit of the debtor with financial institutions or financial intermediaries in the State or abroad; (b) particulars relating to assets of the debtor and the value of such assets; (c) particulars of the liabilities of the debtor; (d) the employment and income of the debtor; (e) payments received by the debtor from the Department of Social Protection or other Departments of State or other State bodies or agencies and whether or not such payments are made as agent of any other person; (f) taxes or charges imposed by or under statute paid or owed by the debtor, whether within or outside the State and refunds in respect of such taxes and charges which are or may become due to the debtor.
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(7)Nothing in this section shall be construed as requiring the Insolvency Service to make an enquiry in any case.
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(8)A person who receives an enquiry from the Insolvency Service pursuant to this section shall be under a duty to furnish the information requested as soon as reasonably practicable.
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(9)Notwithstanding anything contained in any enactment, for the purposes of the performance of the functions of the Insolvency Service under this Act information held by a Department of State, the Revenue Commissioners, a local authority or any other State body or agency in relation to a debtor may be furnished to the Insolvency Service.
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Referral of application to court for issue of protective certificate.
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95.— (1) Where the Insolvency Service, following its consideration under section 94 — (a) is satisfied that an application under section 93 is in order, it shall— (i) issue a certificate to that effect, (ii) furnish that certificate together with a copy of the application and supporting documentation to the appropriate court, and (iii) notify the personal insolvency practitioner to that effect, and (b) is not so satisfied, it shall notify the personal insolvency practitioner to that effect and request him or her, within 21 days from the date of the notification, to submit a revised application or to confirm that the application has been withdrawn.
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(2)Where the appropriate court receives the application for a protective certificate and accompanying documentation pursuant to subsection (1)(a), it shall consider the application and documentation and, subject to subsection (3)— (a) if satisfied that the eligibility criteria specified in section 91 have been satisfied and the other relevant requirements relating to an application for the issue of a protective certificate have been met, shall issue a protective certificate, and (b) if not so satisfied, shall refuse to issue a protective certificate.
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(3)The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
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(4)A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
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(5)Subject to subsections (6) and (7) and section 113
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(2), a protective certificate shall be in force for a period of 70 days from the date of its issue.
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(6)Where a protective certificate has been issued pursuant to subsection (2)(a), the appropriate court may, on application to that court by the personal insolvency practitioner, extend the period of the protective certificate by an additional period not exceeding 40 days where— (a) the debtor and the personal insolvency practitioner satisfy the court that they have acted in good faith and with reasonable expedition, and (b) the court is satisfied that it is likely that a proposal for a Personal Insolvency Arrangement which is likely— (i) to be accepted by the creditors, and (ii) to be successfully completed by the debtor, will be made if the extension is granted.
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(7)Where a protective certificate has been issued pursuant to subsection (2)(a) or extended under subsection (6), the appropriate court may on application to that court extend the period of the protective certificate by a further additional period not exceeding 40 days where— (a) the personal insolvency practitioner has been appointed in accordance with section 49
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(9), and (b) the court is satisfied that the extension is necessary to enable the personal insolvency practitioner so appointed to perform his or her functions under this Chapter.
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(8)A hearing held under subsection (7) shall be held with all due expedition.
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(9)The period of a protective certificate may be extended under subsection (7) once only.
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(10)The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court— (a) issues or extends a protective certificate under this section, (b) refuses to issue or extend a protective certificate under this section, or (c) decides to hold a hearing referred to in subsection (3).
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(11)Where a protective certificate is issued under this section, the Insolvency Service shall— (a) enter details of the name and address of the debtor and the date of issue of the protective certificate, and (b) where applicable, the extension under this section of the protective certificate, together with such other details as may be prescribed under section 133
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(3)(b), in the Register of Protective Certificates.
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(12)On receipt of a notification under subsection (10) of a decision of the court referred to in that subsection, the personal insolvency practitioner shall notify each of the creditors specified in the schedule of creditors of that decision and, in the case of a decision to issue a protective certificate, the notification by the personal insolvency practitioner shall contain a statement— (a) that the debtor intends to make a proposal for a Personal Insolvency Arrangement, (b) of the effect of the protective certificate under section 96 , and (c) of the right of the creditor under section 97 to appeal the issue of the protective certificate.
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(13)Notwithstanding the provisions of subsections (5), (6) and (7), a protective certificate that is in force on the date on which a proposal for a Personal Insolvency Arrangement is approved in accordance with section 110 shall continue in force until it ceases to have effect in accordance with section 113 .
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(14)A protective certificate issued under this section shall— (a) specify— (i) the name of the debtor who is the subject of it, (ii) the debts (“specified debts”) which are subject to it, and (iii) the name of each creditor to whom a specified debt is owed, and (b) contain such other information as may be prescribed.
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(15)In considering an application under this section the appropriate court shall be entitled to treat a certificate issued by the Insolvency Service under subsection (1) as evidence of the matters certified therein.
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Effect of issue of protective certificate.
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96.— (1) Subject to subsections (3), (4) and (5), a creditor to whom notice of the issue of a protective certificate has been given shall not, whilst the protective certificate remains in force, in relation to a specified debt: (a) initiate any legal proceedings; (b) take any step to prosecute legal proceedings already initiated; (c) take any step to secure or recover payment; (d) execute or enforce a judgment or order of a court or tribunal against the debtor; (e) take any step to enforce security held by the creditor in connection with the specified debt; (f) take any step to recover goods in the possession or custody of the debtor (whether or not title to the goods is vested in the creditor or the creditor has security over the goods); (g) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor; (h) in relation to an agreement with the debtor, including a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued— (i) terminate or amend that agreement, or (ii) claim an accelerated payment under that agreement.
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(2)Whilst a protective certificate remains in force, no bankruptcy petition relating to the debtor— (a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt, (b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
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(3)Without prejudice to subsections (1) and (2), whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Personal Insolvency Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.
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(4)Notwithstanding subsection (1), the fact that a protective certificate is in force in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (1) as respects another person who has guaranteed the debts of the debtor to which the protective certificate relates.
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(5)Notwithstanding subsection (1), the fact that a protective certificate is in force in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) as respects a person who has jointly contracted with the debtor or is jointly liable with the debtor to the creditor and that other person may sue or be sued in respect of the contract without joining the debtor.
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(6)Subsections (4) and (5) do not apply where a protective certificate is also in force as respects the other person.
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(7)In reckoning any period of time for the purpose of any applicable limitation period in relation to any proceedings or process to which subsection (1) or (3) applies (including any limitation period under the Statute of Limitations 1957), the period in which the protective certificate concerned is in force shall be disregarded.
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Right of appeal as respects protective certificate.
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97.— (1) Where a creditor is aggrieved by the issue of a protective certificate that creditor may within 14 days of the giving of notice of the issue of the protective certificate to that creditor apply to the appropriate court for an order directing that the protective certificate shall not apply to that creditor.
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(2)A creditor who brings an application under subsection (1) shall give notice to the Insolvency Service and the relevant personal insolvency practitioner and to such other persons as the court may direct of that fact, and the application shall be made in such form as is provided for in rules of court.
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(3)In determining an application under this section the court shall not make an order directing that the protective certificate shall not apply to that creditor unless it is satisfied that— (a) not making such an order would cause irreparable loss to the creditor which would not otherwise occur, and (b) no other creditor to whom notice of the protective certificate has been given would be unfairly prejudiced.
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(4)In determining the costs of the application the court shall have regard to the objective that all the parties to such an application should bear their own costs unless to do so would cause a serious injustice to the parties to the application.
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(5)Where the court makes an order under this section the court shall, unless it considers that there are good reasons not to do so, direct the creditor to hold any moneys or other assets recovered in trust for the benefit of the other creditors to whom the protective certificate applies, pending a further direction on the matter by the court.
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(6)A hearing under subsection (1) shall be heard with all due expedition.
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Actions to be taken by personal insolvency practitioner following issue of protective certificate.
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98.— (1) Where a protective certificate has been issued, the personal insolvency practitioner shall as soon as practicable thereafter— (a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Personal Insolvency Settlement Arrangement and, subject to section 101
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(2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Personal Insolvency Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement, (b) consider any submissions made by creditors regarding the debts and the manner in which the debts might be dealt with as part of a Personal Insolvency Arrangement, including— (i) any submission made by a creditor with respect to previous or existing offers of arrangements made by the creditor to or with the debtor, and (ii) any submission made by a secured creditor in accordance with section 102 , and (c) make a proposal for a Personal Insolvency Arrangement in respect of the debts concerned.
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(2)(a) A personal insolvency practitioner may in any case request a creditor to file a proof of debt and the debt shall be proved in the same manner as a debt of a bankrupt is proved under the Bankruptcy Act 1988 and subject to subsection (3) paragraphs 1 to 22 of the First Schedule of that Act shall apply with all necessary modifications to the proof of such debts. (b) Subject to paragraph (c), a creditor who does not comply with a request under paragraph (a) is not entitled to— (i) vote at a creditors’ meeting, or (ii) share in any distribution that may be made under the Personal Insolvency Arrangement concerned. (c) Where a creditor to whom paragraph (b) applies files a proof of debt in the manner specified in paragraph (a), paragraph (b) shall cease to apply, but without prejudice to anything done while that paragraph applied.
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(3)In applying the First Schedule of the Bankruptcy Act 1988 to proof of debts under this section— (a) a reference in that Schedule to the Court and the Official Assignee shall be read as a reference to the personal insolvency practitioner, and (b) a reference to a bankrupt shall be read as a reference to the debtor to whom the proposal for a Personal Insolvency Arrangement relates.
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Mandatory requirements concerning Personal Insolvency Arrangement.
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99.— (1) Subject to the mandatory requirements referred to in subsection (2), the terms of a Personal Insolvency Arrangement shall be those which are agreed to by the debtor and subject to this Chapter, approved by a majority of the debtor’s creditors in accordance with this Chapter.
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(2)The mandatory requirements referred to in subsection (1) are: (a) a Personal Insolvency Arrangement shall clearly specify which debts are secured debts and which debts are unsecured debts; (b) the maximum duration of a Personal Insolvency Arrangement shall be 72 months but a Personal Insolvency Arrangement may provide that this period may be extended for a further period of not more than 12 months in such circumstances as are specified in the terms of the Personal Insolvency Arrangement; (c) where the debtor performs all of his or her obligations specified in a Personal Insolvency Arrangement, he or she shall not stand discharged from the secured debts covered by the Personal Insolvency Arrangement except to the extent provided for under the terms of the Personal Insolvency Arrangement; (d) a Personal Insolvency Arrangement shall not require the debtor to sell any of his or her assets that are reasonably necessary for the debtor’s employment, business or vocation unless the debtor explicitly consents to such sale; (e) a Personal Insolvency Arrangement shall not contain any terms which would require the debtor to make payments of such an amount that the debtor would not have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants; (f) a Personal Insolvency Arrangement shall— (i) make provision for the costs and outlays of the personal insolvency practitioner which relate to the matters referred to in sections 48 to 54 and this Chapter and to the ongoing administration of the Arrangement, (ii) indicate the likely amount of the fees, costs and outlays to be incurred or where this is not practicable the basis on which those fees, costs and outlays will be calculated, and (iii) specify the person or persons by whom those fees, costs and charges are payable and the manner in which they have been or are to be paid; (g) a Personal Insolvency Arrangement shall make provision for the manner in which the debtor’s debts are to be treated in the event of the death or mental incapacity of the debtor; (h) a Personal Insolvency Arrangement shall not require that the debtor dispose of his or her interest in the debtor’s principal private residence or to cease to occupy such residence unless the provisions of section 104
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(3)apply; (i) a Personal Insolvency Arrangement shall provide that the circumstances of the debtor be reviewed by the personal insolvency practitioner at regular intervals which are specified in the Personal Insolvency Arrangement (which intervals are not greater than 12 months) during the currency of the Personal Insolvency Arrangement; (j) a Personal Insolvency Arrangement shall provide that the review referred to in paragraph (i) shall include the preparation by the debtor of a new Prescribed Financial Statement, a copy of which together with a statement by the personal insolvency practitioner as to whether he or she considers that statement to be complete and accurate, shall be sent by the personal insolvency practitioner to each creditor; (k) subject to sections 102 to 105 , a Personal Insolvency Arrangement shall make provision for the manner in which security held by a secured creditor is to be treated; and (l) the terms of a Personal Insolvency Arrangement shall specify the circumstances where the personal insolvency practitioner shall be obliged to propose a variation of the Personal Insolvency Arrangement in accordance with section 119 .
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(3)The Insolvency Service may publish a Code of Practice providing guidance on any of the matters set out in subsection (2).
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(4)For the purposes of subsection (2)(e), and without prejudice to subsection (3), in determining whether a debtor would have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants under the Personal Insolvency Arrangement, regard shall be had to any guidelines issued under section 23 .
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Non-exhaustive list of options as respects payments for inclusion in Personal Insolvency Arrangement.
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100.— (1) Subject to the provisions of this Act, a proposal for a Personal Insolvency Arrangement may incorporate one or more of the options in subsection (2) with respect to payments to creditors.
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(2)The terms of a proposal for a Personal Insolvency Arrangement may include any one or more of the following: (a) a lump sum payment to creditors, whether provided from the debtor’s own resources or from the resources of other persons; (b) a payment arrangement with creditors; (c) an agreement by the debtor to transfer some or all of the debtor’s property to a person (who may be the personal insolvency practitioner) to hold the property in trust for the benefit of the creditors; (d) a transfer of specified assets of the debtor to creditors generally or to a specified creditor; (e) a sale of specified assets of the debtor by or under the supervision of the personal insolvency practitioner and the payment of the proceeds of such sale to creditors; or (f) in respect of secured debts, subject to sections 102 to 105 , an arrangement for the treatment of the security and the satisfaction or restructuring of the secured debt.
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(3)Unless provision is otherwise made in the Personal Insolvency Arrangement, and subject to section 101 , the arrangement shall provide for payments to creditors of the same class to be made on a pari passu basis, and where so otherwise provided the Personal Insolvency Arrangement shall specify the reasons for such provision being made.
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(4)Unless provision is otherwise made in the Personal Insolvency Arrangement, where an Arrangement provides for payments to a creditor to whom section 92 applies that are greater than the payments that creditor would receive if such payments were made on a pari passu basis, the fees, costs and charges referred to in section 99
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(2)(f) shall be payable by that creditor in proportion to the payments received by him or her.
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(5)The payment of moneys or the performance of obligations provided for by a Personal Insolvency Arrangement may be secured by a charge given by the debtor or a charge or guarantee given by a person other than the debtor.
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(6)Subject to the provisions of this Act the terms of a Personal Insolvency Arrangement may include provisions relating to payments other than those specified in this section.
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Preferential debts in Personal Insolvency Arrangement.
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101.— (1) Unless the creditor concerned otherwise agrees in writing and provision is so made in the terms of the Personal Insolvency Arrangement, a preferential debt shall, subject to subsection (3), be paid in priority by the debtor and where those debts are to be paid in priority the provisions of section 81 of the Bankruptcy Act 1988 shall apply with all necessary modifications.
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(2)In notifying creditors of the issue of a protective certificate the personal insolvency practitioner shall indicate that any creditor who considers some or all of his or her debt to be a preferential debt is required to furnish evidence of the circumstances of how that debt or part of that debt is claimed to be a preferential debt within such reasonable period as may be specified, and that in the absence of such evidence, the proposal for a Personal Insolvency Arrangement may be prepared on the basis that the debt concerned is not a preferential debt.
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(3)Where a creditor fails to satisfy the personal insolvency practitioner that his or her debt is a preferential debt, the debt shall be treated as not being a preferential debt for the purposes of a Personal Insolvency Arrangement.
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(4)Subsection (1) shall not affect the operation of section 103 unless the relevant secured creditors otherwise agree.
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(5)In this Chapter, “preferential debt” means a debt which, if the debtor concerned were a bankrupt would be a debt— (a) that by virtue of section 81 of the Bankruptcy Act 1988 is to be paid in priority to all other debts, or (b) that by virtue of any other statutory provision is to be included among such debts.
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Secured creditors and Personal Insolvency Arrangement.
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102.— (1) Where a secured creditor has been notified by the personal insolvency practitioner that a protective certificate has been issued in respect of the debtor the secured creditor concerned shall furnish to the personal insolvency practitioner an estimate, made in good faith, of the market value of the security and the creditor concerned may also indicate, a preference as to how, having regard to subsection (3) and sections 103 to 105 , that creditor wishes to have the security and secured debt treated under the Personal Insolvency Arrangement.
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(2)In formulating the proposal for a Personal Insolvency Arrangement the personal insolvency practitioner shall— (a) have regard to subsection (3) and sections 103 to 105 , and