25,000 expected to seek debt deals under new insolvency rules
Irish Independent – Charlie Weston Personal Finance Editor – 05 March 2013
THOUSANDS more people will apply for debts to be written off under new personal insolvency rules than expected, new research has found.
As many as 25,000 people will apply for personal insolvency debt deals.
This prompted experts to conclude that the Government and the Central Bank have underestimated the demand.
There is set to be a rush of heavily indebted householders seeking to restructure mortgage debts and other borrowings when the new Insolvency Service gets up and running in the summer, according to calculations by business information publication ‘Stubbs Gazette’ based on poll findings by Red C.
The new Insolvency Service will replace the current inflexible bankruptcy system with court-back deals between over-stretched borrowers and banks. Some debts will be written off if a payment agreement is observed over a five to seven-year period.
But people in these types of arrangements will be told how much they can live on, if the bank signs off on the deal.
Almost 250,000 households will qualify for some form of deal under new insolvency laws, according to the research seen by the Irish Independent.