PIA Confirmation

Creditors Meeting

Where a personal insolvency practitioner has prepared a proposal for a Personal Insolvency 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 for the purpose of considering the proposal for a Personal Insolvency Arrangement.

When calling a creditors’ meeting, the personal insolvency practitioner shall

  • 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;
  • ensure that the notice is accompanied by a copy of each of the required documents; and
  • lodge a copy of the notice and the documents with the Insolvency Service.

Where a creditors’ meeting does not take place before the expiry of the protective certificate, the Personal Insolvency Arrangement procedure shall be deemed to have come to an end.


Documents to be Furnished

The documents to be furnished to the creditors include a completed statement of the debtor’s financial affairs, showing the debtor’s position of insolvency, in the form of the Prescribed Financial Statement and the terms of the proposal for a Personal Insolvency Arrangement;

The creditors must be furnished with a statement by the personal insolvency practitioner to the effect that:

  • he or she has been instructed by the debtor to act as a personal insolvency practitioner in connection with the Personal Insolvency Arrangement procedure,
  • he or she has consented to so act and is a person entitled to act as a personal insolvency practitioner;
  • he or she has advised the debtor of the debtor’s options for managing the debtor’s financial difficulties;
  • he or she is not aware of any reasonable grounds to believe that the information contained in the debtor’s Prescribed Financial Statement is other than complete and accurate;
  • he or she is of the opinion that the debtor satisfies the eligibility criteria for the proposal of a Personal Insolvency Arrangement;
  • the proposed Personal Insolvency Arrangement complies with the mandatory requirements; and
  • the proposed Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt

PIP Report to be Furnished

The creditors must also be furnished with a report of the personal insolvency practitioner—

  • describing the outcome for creditors, and having regard to the financial circumstances of the debtor whether or not the proposed Personal Insolvency Arrangement represents a fair outcome for the creditors,
  • indicating, where relevant, how the 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
  • indicating whether or not he or she considers that the debtor is reasonably likely to be able to comply with the terms of the proposed Personal Insolvency Arrangement.

Change of Circumstances

Where a debtor’s financial position has materially changed in the period between the completion by him or her of a Prescribed Financial Statement and the giving of notice the debtor shall inform the personal insolvency practitioner of that fact and of the nature of such change.

The personal insolvency practitioner shall if he or she considers that the change necessitates the completion of a new Prescribed Financial Statement, assist the debtor in completing such a new statement. Where a new Prescribed Financial Statement is completed, the personal insolvency practitioner shall furnish a copy of that Statement to the parties who received the original Statement


Voting Rights

The creditors’ meeting shall consider the proposal for a Personal Insolvency Arrangement and shall vote on it. The creditors’ meeting shall be conducted in accordance with any regulations made.

The voting rights exercisable by a creditor at a creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.

A creditor who is a connected person as respects the debtor may not vote in favour of a proposal for a Personal Insolvency Arrangement at a creditors’ meeting. That creditor may vote against the proposal. A person who appears to the personal insolvency practitioner to be the owner of the debt (or an agent acting on behalf of that person) is entitled to receive notices required to be sent to a creditor and to vote at the creditors’ meeting.

Where, at the taking of a vote at a creditors’ meeting, no creditor votes, the proposed Personal Insolvency Arrangement is e deemed to have been approved.

Where at the taking of a vote at a creditors’ meeting the proposal is not approved or deemed to have been approved, the Personal Insolvency Arrangement procedure shall terminate and the protective certificate issued shall cease to have effect.


Secured Debt Voting

In the case of a secured debt, where: the value of security held by a creditor who is a secured creditor is determined, to be less than the amount of the secured debt due to the creditor on the day the protective certificate is issued; and the proposed Personal Insolvency Arrangement provides for all or part (the relevant portion) of that secured debt to:

  • rank equally with, and abate in equal proportion to, the unsecured debts covered by the Arrangement; and
  •  be discharged with those unsecured debts on completion of the obligations specified in the Arrangement,

then, the relevant portion of that secured debt shall be treated as unsecured, and the creditor concerned may vote in respect of the relevant portion of that debt as an unsecured creditor.

Where a secured creditor consents in writing to the inclusion of terms in the Personal Insolvency Arrangement providing for the surrender to the debtor of his or her security upon the coming into effect of the Arrangement, that creditor shall be treated as an unsecured creditor for the purposes of the Arrangement and shall only be entitled to vote at a creditors’ meeting as an unsecured creditor.


Amended Proposal

The proposal for a Personal Insolvency 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 arrangement where the modification has been proposed by a creditor or the personal insolvency practitioner, and the debtor gives his or her written consent to the modification.

The personal insolvency practitioner may where he or she believes it is in the interests of obtaining approval of the creditors at the meeting, adjourn the meeting and with the consent in writing of the debtor shall prepare an amended proposal for a Personal Insolvency Arrangement.

Where the personal insolvency practitioner prepares an amended proposal for a Personal Insolvency Arrangement he or she shall notify the debtor of the date on which, and time and place at which, the adjourned meeting will be held.

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, the PIP shall notify each creditor of the date on which and time and place at which, the adjourned meeting will be held. He shall ensure that the notices are accompanied by a copy of the amended proposal, and lodge a copy of the notice and a copy of the amended proposal with the Insolvency Service.


Approval of Personal Insolvency Arrangement

A proposed Personal Insolvency Arrangement is considered as having been approved by a creditors’ meeting where

  • creditors representing not less than 65 percent of the total amount of the debtor’s debts due to the creditors participating in the meeting and voting have voted in favour of the proposal,
  • creditors representing more than 50 percent of the value of the secured debts due to creditors who are entitled to vote, and have voted, at the meeting as secured creditors have voted in favour of the proposal, and
  • creditors representing more than 50 percent of the amount of the unsecured debts creditors who are entitled to vote, and have voted, at the meeting as unsecured creditors have voted in favour of the proposal.

The value of a secured debt shall be the market value of the security and the amount of the debt secured by the security on the day the protective certificate is issued, whichever is the lesser.

The Minister may make regulations relating to the holding of creditors’ meetings which may provide for

  • the holding of a meeting in circumstances where not all of the creditors are present in the same venue,
  • the voting process including providing for the communication of creditors’ votes to the personal insolvency practitioner by telephony or electronically, and
  • appointment of proxies to vote at such meetings.

The venue for the holding of a creditors’ meeting shall be situated within the State.


Notice to Creditors and ISI I

Where a Personal Insolvency Arrangement is approved at a creditors’ meeting or is deemed to have been approved, the personal insolvency practitioner shall as soon as practicable after the meeting has concluded, notify the Insolvency Service and each creditor concerned of that approval or, as the case may be, deemed approval.

The notification shall be accompanied by

  • a certificate of the result of the vote taken at the creditors’ meeting, identifying the proportions of the respective categories of votes cast by those voting at the creditors’ meeting and stating that the requisite proportions of creditors have approved the proposal, or where the proposal is deemed to have been approved, a certificate to that effect;
  • a copy of the approved Personal Insolvency Arrangement, and
  • a  statement by the personal insolvency practitioner to the effect that he or she is of the opinion that  the debtor satisfies the eligibility criteria,  the approved arrangement complies with the mandatory requirements, and  the arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt (other than where individually agreed) or otherwise affect such a debt.

Notice to Creditors and ISI II

The personal insolvency practitioner shall also send a notice to each creditor indicating that he or she may make an objection to the coming into effect of the Personal Insolvency Arrangement by lodging a notice of objection with the appropriate court, within 14 days of the notice.

Where a Personal Insolvency Arrangement is approved or, as the case may be, deemed to have been approved, the personal insolvency practitioner shall as soon as practicable thereafter notify the Insolvency Service and each creditor concerned of that approval or, as the case may be, deemed approval

Where a personal insolvency practitioner has prepared a proposal for a Personal Insolvency Arrangement and the debtor has consented to that proposal, and only one creditor would be entitled to vote at a creditors’ meeting the procedures are modified to reflect the fact that there is one creditor and that no meetings are required. Notice is given to the single creditor with the same documents as in respect of a meeting. They may accept or be deemed to accept where they do not respond.

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 Personal Insolvency Arrangement comes into effect or all objections lodged with the appropriate court have been determined by the court.


Objection

A creditor may lodge a notice of objection with the appropriate court within 14 days and shall at the same time send a copy of the notice of objection to the Insolvency Service, and the personal insolvency practitioner. On receipt of notification and the accompanying documents from the personal insolvency practitioner, the Insolvency Service shall notify the appropriate court and furnish to that court a copy of the notification and documents and record the approval of the Personal Insolvency Arrangement concerned in the Register.

The grounds on which objection may be made to the coming into effect of the Personal Insolvency Arrangement are those specified below. The hearing of an objection shall be heard with all due expedition. Where the appropriate court upholds the objection to the Personal Insolvency Arrangement, the Personal Insolvency Arrangement procedure shall be deemed to have come to an end, and the protective certificate issued shall cease.


Coming into Effect

Where no objection is lodged by a creditor with the court within 14 days of the giving of the notice, or 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 court shall proceed to consider, whether to approve the coming into effect of the Personal Insolvency Arrangement.

The court shall consider the notification and documents furnished. It shall approve the coming into effect of the Arrangement if satisfied that the

  • eligibility criteria have been satisfied,
  • mandatory requirements have been complied with,
  • the Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than where agreed or deemed to be agreed) or otherwise affect such a debt, and
  • the proposal for a Personal Insolvency Arrangement, as the case may be having been approved by the requisite proportions of creditors or has been approved or, as the case may be, deemed to have been approved.

It not so satisfied, the court shall refuse to approve the coming into effect of the Personal Insolvency Arrangement.


Court Enquiries and Certificate

Where the court, for the purpose of its arriving at a decision requires further information, it may request the Insolvency Service to provide information, and the Insolvency Service shall provide the information requested to the court and to the personal insolvency practitioner concerned, or further information or evidence. It may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.

The court may accept

  • the certificate of the personal insolvency practitioner as evidence that the proposal for a Personal Insolvency Arrangement has been approved by the requisite proportions of creditors;
  • the certificate of the personal insolvency practitioner as evidence that the proposal for a Personal Insolvency Arrangement is one deemed to be approved;
  • the certificate of the personal insolvency practitioner as evidence that the Personal Insolvency Arrangement has been approved or, as the case may be, deemed to have been approved and
  • the statement of the personal insolvency practitioner as evidence of any relevant matter

Approval, Non-Approval or Hearing

The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court approves or refuses to approve the coming into effect of the Personal Insolvency Arrangement or decides to hold a hearing.

On receipt of a notification of the approval of the coming into effect of the Personal Insolvency Arrangement, the Insolvency Service shall register the Personal Insolvency Arrangement in the Register of Personal Insolvency Arrangements. The Personal Insolvency Arrangement shall come into effect upon being registered in the Register of Personal Insolvency Arrangements.


Application to Court by PIP where Mortgage Arrears

Where a proposal for a Personal Insolvency Arrangement is not approved, and  the debts that would be covered by the proposed Personal Insolvency Arrangement include a relevant debt (personal home mortgage in arrears), the personal insolvency practitioner may, where he or she considers that there are reasonable grounds for the making of such an application and if the debtor so instructs him or her in writing, make an application on behalf of the debtor to the appropriate court for an order..

A ‘relevant debt’ means a debt the payment for which is secured by security in or over the debtor’s principal private residence, and  in respect of which the debtor, on 1 January 2015, was in arrears with his or her payments, or  the debtor, having been, before 1 January 2015, in arrears with his or her payments, has entered into an alternative repayment arrangement with the secured creditor concerned.

An application shall be made not later than 14 days after the creditors’ meeting or, as the case may be, receipt by the personal insolvency practitioner of the notice of the creditor concerned. It shall be on notice to the Insolvency Service, each creditor concerned and the debtor.

The notice to a creditor shall be accompanied by a note indicating that he or she may, within 14 days of the date of the sending of the notice, lodge a notice with the appropriate court, setting out whether or not the creditor objects to the application and the creditor’s reasons for this.


Notice to Creditor to Include Certain Matter

The notice shall to the creditor(s) in the above case shall be accompanied by a statement of the grounds of the application, which shall include

  • a statement that the proposal for a Personal Insolvency Arrangement has not been approved;
  • a statement identifying, the creditor or creditors who, having voted in favour of the proposal, should, in the opinion of the personal insolvency practitioner, be considered by the court to be a class of creditors for the purpose of this section, and giving the reasons for this opinion;
  • a copy of the proposal for a Personal Insolvency Arrangement;
  • a copy of the report of the personal insolvency practitioner;
  • a certificate  with the result of the vote taken at the creditors’ meeting and identifying  the proportions of the respective categories of votes cast by those voting at the creditors’ meeting, and  the creditors who voted in favour of and against the proposal, and the nature and value of the debt owed to each such creditor, or  where applicable, stating that the provisions regarding a single creditor applies to the proposal and that the creditor concerned has notified the personal insolvency practitioner that the creditor does not approve of the proposal, and
  • a statement by the personal insolvency practitioner to the effect that he or she is of the opinion that  the debtor satisfies the eligibility criteria for the proposal of a Personal Insolvency Arrangement and that  the proposed Personal Insolvency Arrangement complies with the mandatory requirements  and  the proposed Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt (other than a permitted debt) or otherwise affect such a debt.

Objecting Creditor

A creditor who lodges a notice of objection shall at the same time send a copy of the notice to the Insolvency Service, the personal insolvency practitioner and each creditor concerned. Where an application is made before the expiry of the period of the protective certificate, such protective certificate shall continue in force until the Personal Insolvency Arrangement comes into effect or one of the following occurs—

  • the time for bringing an appeal against a refusal of the appropriate court to make an order has expired without any such appeal having been brought,
  • such appeal has been withdrawn, or
  • the appeal has been determined.

The court shall hold a hearing, which hearing shall be on notice to the Insolvency Service, the personal insolvency practitioner and each creditor concerned. The hearing shall be held with all due expedition.

The court shall make an order only where it is satisfied that the requisite majority has approved it (or are deemed to have approved it) the eligibility criteria have been satisfied, the mandatory requirements have been complied with, and  the proposed Arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt or affect them (other than where individually agreed).

The following criteria and conditions also apply.


Further Court Order Criteria I

The court may make an order confirming the coming into effect of the proposed Personal Insolvency Arrangement only where it is satisfied that

  • the terms of the proposed Arrangement have been formulated in compliance with the statutory requirements;
  • having regard to all relevant matters, including the financial circumstances of the debtor, the debtor is reasonably likely to be able to comply with the terms of the proposed Arrangement;
  • where applicable, the costs of enabling the debtor to continue to reside in the debtor’s principal private residence are not disproportionately large;
  • the proposed Arrangement is fair and equitable in relation to each class of creditors that has not approved the proposal and whose interests or claims would be impaired by its coming into effect;
  • the proposed Arrangement is not unfairly prejudicial to the interests of any interested party, and
  • other than where there is a single creditor at least one class of creditors has accepted the proposed Arrangement, by a majority of over 50 percent of the value of the debts owed to the class.

Further Court Order Criteria II

The Court having regard to all relevant matters, including the terms on which the proposed Arrangement is formulated, must be satisfied that

  • there is a reasonable prospect that confirmation of the proposed Arrangement will enable the debtor to resolve his or her indebtedness without recourse to bankruptcy,
  • enable the creditors to recover the debts due to them to the extent that the means of the debtor reasonably permit, and
  • enable the debtor not to dispose of an interest in, or not to cease to occupy, all or a part of his or her principal private residence;

In considering whether to make an order, the court shall have regard to:

  • the conduct, within the 2 years prior to the issue of the protective certificate, of the debtor in seeking to pay the debts concerned, and a creditor in seeking to recover the debts due to it;
  • where details of them are contained in a notice lodged by a creditor a submission made by the creditor or an indication given by the creditor and the date on which such submission was made or indication was furnished, and any alternative option available to the creditor for the recovery of the debt concerned.

Facilitative Certificates as Evidence

For the purposes of its consideration of an application, the appropriate court may accept

  • the certificate of the personal insolvency practitioner as evidence of the proportions of the respective categories of votes cast by those voting at the creditors’ meeting and of the creditors who have voted in favour of and against the proposed Personal Insolvency Arrangement and of the nature and value of the debt owed to each such creditor;
  • the certificate of the personal insolvency practitioner as evidence that the proposed Arrangement has not been approved in the case of a single creditor; and
  • the statement of the personal insolvency practitioner as evidence of any matter, which is the subject of that statement.

Classes of Creditor for Voting

A proposal for a Personal Insolvency Arrangement is not approved where

  • at a creditors’ meeting held, it is not approved or deemed to have been approved, or
  • in the case of a proposal for a Personal Insolvency Arrangement with a single creditor, the creditor concerned has notified the personal insolvency practitioner that the creditor does not approve of the proposal.

The court may consider one creditor, or more than one creditor, where the court considers the creditors to have, in relation to the debtor, interests or claims of a similar nature, to be a class of creditor.

In deciding whether to consider a creditor or creditors to be a class of creditor, the court shall have regard to the circumstances of the case, including, having regard to the statement of the grounds of the application and the certificate  the overall number and composition of the creditors who voted at the creditors’ meeting, and the proportion of the debtor’s debts due to the creditors participating and voting at the creditors’ meeting that is represented by the creditor or creditors concerned.


Registration and Commencement

The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court makes or refuses to make an order. On receipt of a notification of the making of an order, the Insolvency Service shall register the Personal Insolvency Arrangement concerned in the Register of Personal Insolvency Arrangements.

The Personal Insolvency Arrangement shall come into effect upon being registered in the Register of Personal Insolvency Arrangements.

The court, in an application, shall make such other order as it deems appropriate, including an order as to the costs of the application.

Upon a Personal Insolvency Arrangement being registered in the Register of Personal Insolvency Arrangements it shall have effect according to its terms and remain in effect until it is completed in accordance with its terms or the terms of any variation made, or it is terminated.


References and Sources

Irish Books

Burke & Comyn Personal Insolvency Law               2014

Bracken Practioner’s Personal Insolvency Handbook 2013

Law Society (Wright)       Insolvency Law                  2009

Sanfey & Holohan            Bankruptcy Law & Practice2nd Ed             2010

Farry, Holohan  Consolidated Bankruptcy & Personal Insolvency Legislation2013

Forde, Kennedy & Simms              Company Insolvency                      2015

Forde & Simms Bankruptcy Law 2nd Ed 2009

UK Books

Insolvency Law and Practice (Report of the review committee chaired by Sir Kenneth Cork CBE, 1982, Cmnd 8558) (the Cork report)

V Finch, Corporate Insolvency Law: Perspectives and Principles 3rd Ed 2017

RM Goode, Principles of Corporate Insolvency Law (4th Ed, 2011)

A Keay and P Walton, Insolvency law: corporate and personal (4rd Ed, 2017)

Marsh Bankruptcy Insolvency and the Law 2016

WW McBryde, Bankruptcy 2nd Ed, 1995

Butterworths Insolvency Law Handbook 14th Ed 2012

Core Statutes on Insolvency Law and Corporate Rescue (annual editions)

Legislation

Personal Insolvency Legislation

Personal Insolvency Act 2012

Personal Insolvency (Amendment) Act 2015

Personal Insolvency Act 2012 (Part 6) (Commencement) Order 2013, S.I. No. 14 of 2013

Personal Insolvency Act 2012 (Commencement) (No. 2) Order 2013, S.I. No. 63 of 2013

Personal Insolvency Act 2012 (Establishment Day) Order 2013, S.I. No. 64 of 2013

Personal Insolvency Act 2012 (Authorisation and Supervision of Personal Insolvency Practitioners) Regulations 2013, S.I. No. 209 of 2013

Personal Insolvency Act 2012 (Authorisation of Approved Intermediaries) Regulations 2013, S.I. No. 216 of 2013

Personal Insolvency Act 2012 (Personal Insolvency Practitioner Authorisation and Renewal of Authorisation Prescribed Fees) Regulations 2013, S.I. No. 246 of 2013

Personal Insolvency Act 2012 (Accounts and Related Matters) Regulations 2013, S.I. No. 247 of 2013

Personal Insolvency Act 2012 (Commencement) (No. 3) Order 2013, S.I. No. 285 of 2013

Personal Insolvency Act 2012 (Value of interest in property) Regulations 2013, S.I. No. 330 of 2013

Personal Insolvency Act 2012 (Prescribed Protective Certificate Personal Insolvency Arrangement Application Form) Regulations 2013, S.I. No. 331 of 2013

Personal Insolvency Act 2012 (Prescribed Protective Certificate Debt Settlement Arrangement Application Form) Regulations 2013, S.I. No. 332 of 2013

Personal Insolvency Act 2012 (Prescribed Debt Relief Notice Application Form) Regulations 2013, S.I. No. 333 of 2013

Personal Insolvency Act 2012 (Schedule of Creditors) Regulations 2013, S.I. No. 334 of 2013

Personal Insolvency Act 2012 (Procedures for the Conduct of Creditors’ Meetings) Regulations 2013, S.I. No. 335 of 2013

Personal Insolvency Act 2012 (Notification in relation to Excludable Debt) Regulations 2013, S.I. No. 337 of 2013

Personal Insolvency Act 2012 (Additional Information to be contained in the Registers) Regulations 2013, S.I. No. 356 of 2013

Personal Insolvency Act 2012 (Part 4) (Commencement) Order 2013, S.I. No. 462 of 2013

Personal Insolvency Act 2012 (Prescribed Fees in Bankruptcy Matters) Regulations 2013, S.I. No. 465 of 2013

Personal Insolvency Act 2012 (Prescribed Financial Statement) Regulations 2014, S.I. No. 259 of 2014

Personal Insolvency Act 2012 (Regulatory Disclosure Statement of a Personal Insolvency Practitioner) Regulations 2014, S.I. No.319 of 2014

Personal Insolvency Act 2012 (Written Statement Disclosing All of the Debtor’s Financial Affairs) Regulations 2015, S.I. No. 416 of 2015

Personal Insolvency Act 2012 (Prescribed Fees) Regulations 2015, S.I. No. 620 of 2015

Personal Insolvency Act 2012 (Renewal of Authorisation of Personal Insolvency Practitioners) Regulations 2016, S.I. No.226 of 2016

Justice Courts and Civil Law (Miscellaneous Provisions) Act 2013

Courts and Civil Law (Miscellaneous Provisions) Act 2013 (Part8) (Commencement) Order 2013, S.I. No. 286 of 2013

Courts and Civil Law (Miscellaneous Provisions) Act 2013 (Part 7) (Commencement) Order 2013, S.I. No. 463 of 2013

Courts and Civil Law (Miscellaneous Provisions) Act 2013 (Section 2) (Commencement) Order 2014, S.I. No. 334 of 2014

Personal Insolvency (Amendment) Act 2015 (Commencement) Order 2015, S.I. No. 414 of 2015

Personal Insolvency (Amendment) Act 2015 (Commencement) (No. 2) Order 2015, S.I. No. 514 of 2015