PIA Initiation
Personal Insolvency Act 2012
Chapter 4
Personal Insolvency Arrangements
Personal Insolvency Arrangement: General Conditions.
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.
(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.
(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.
(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.
(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.
(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).
Personal Insolvency Arrangement permitted once only.
90.— A debtor may enter into a Personal Insolvency Arrangement once only.
Eligibility criteria for a Personal Insolvency Arrangement.
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,
(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.
(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.
(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.
(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.
(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.
Creditor consent required for inclusion of excludable debt in Personal Insolvency Arrangement.
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.
(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.
(3) A creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(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.
(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.
(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 (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.
(7) An excludable debt shall not be the subject of a Personal Insolvency Arrangement unless it is a permitted debt.
(8) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.
Application for protective certificate.
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.
(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 (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.
(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 .
(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.
Consideration by Insolvency Service of application for protective certificate.
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.
(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.
(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.
(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.
(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.
(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.
(7) Nothing in this section shall be construed as requiring the Insolvency Service to make an enquiry in any case.
(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.
(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.
Referral of application to court for issue of protective certificate.
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.
(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.
(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.
(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.
(5) Subject to subsections (6) and (7) and section 113 (2), a protective certificate shall be in force for a period of 70 days from the date of its issue.
(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.
(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 (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.
(8) A hearing held under subsection (7) shall be held with all due expedition.
(9) The period of a protective certificate may be extended under subsection (7) once only.
(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).
(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 (3)(b), in the Register of Protective Certificates.
(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.
(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 .
(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.
(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.
Effect of issue of protective certificate.
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.
(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.
(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.
(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.
(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.
(6) Subsections (4) and (5) do not apply where a protective certificate is also in force as respects the other person.
(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.
Right of appeal as respects protective certificate.
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.
(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.
(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.
(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.
(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.
(6) A hearing under subsection (1) shall be heard with all due expedition.
Actions to be taken by personal insolvency practitioner following issue of protective certificate.
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 (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.
(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.
(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.