Legislation aimed at increasing supports for borrowers whose income has been severely hit by the pandemic comes into effect today (25 June).

The Minister for Justice, Heather Humphreys (pictured), has now signed the order related to the Personal Insolvency (Amendment) Act 2021, which was recently brought through the Oireachtas by the Minister of State for Law Reform, James Browne.

The act makes several amendments to the Personal Insolvency Act 2012. One of the main changes is aimed at helping homeowners struggling with mortgage arrears.

Review by court

The Personal Insolvency Amendment Act 2015 allowed insolvent homeowners to seek review by a court if a mortgage lender or another creditor refused a reasonable proposal for a personal insolvency arrangement.

The protection, however, applied only to mortgage arrears dating from before 1 January, 2015. The new legislation removes this condition.

Section 2 of the act adjusts the asset ceiling for an insolvent person applying for a Debt Relief Notice — the statutory debt restructure designed for people with debts not exceeding €35,000, and very little income or assets. 

Ceiling raised

The ceiling for assets (including savings) is raised from €400 to €1,500. This change removes an obstacle that could otherwise affect recipients of some social welfare payments that are paid as lump sums, such as Fuel Allowance or Carer’s Support Grant.

Other changes coming into effect include:

• Allowing a key advisory meeting between the insolvent person and their financial adviser to take place remotely, rather than face-to-face,
• A new power for the court to extend an insolvent debtor’s ‘protective certificate’ (a court order, protecting them against creditor enforcement for a limited period while their personal insolvency practitioner puts together a personal insolvency proposal) for up to 40 days,
• Allowing a personal insolvency practitioner (PIP) to delegate their functions under the act to another person employed by or working with the PIP, subject to certain conditions.