# Summary of the new process for appealing PIAs which have been vetoed



## Brendan Burgess (3 Dec 2015)

I haven't been following this stuff closely and I want to get up to date. 

Is there a good summary as to how they affect the family home? 

For example, a PIA can be imposed on a lender. But can the lender just simply get around it by seeking an order for possession? 

Who pays for the appeals of the PIAs? 
What are the guidelines for the Judges in these cases? 

Brendan


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## Brendan Burgess (3 Dec 2015)

From the ISI press release



Brief overview of review mechanism
 Where creditor (s) reject the debtor’s PIA proposal tabled by a PIP, a PIP can make an application
within 14 days on the debtor’s behalf for a review of that decision to Specialist Judges within the
Circuit Court, or in certain cases, the High Court.

 In order to make the application, the debtor’s PIA proposal must include a home mortgage which
was:
o in arrears on 01/01/2015 or;
o was in arrears prior to 01/01/2015 and the debtor entered into an alternative repayment arrangement.
 The PIP will assist the debtor in making the appeal.
 The Court will review the application including any objections made by creditors and, subject to meeting a number of criteria set out in the legislation, which include criteria similar to those found in long established Examinership legislation, the Judge may impose the original PIA proposal on the creditor (s).

 The criteria set out in the legislation which the Court will consider as part of making it’s decision under the review process includes:
o Proposed arrangement formulated in compliance with Section 104 of Personal Insolvency Act 2012;
o  Proposal would enable debtor resolve indebtedness without recourse to bankruptcy;
o  Proposal would enable creditors to recover debt due to extent debtor’s means reasonably permit;
o  Proposal would not require the debtor to dispose of, or move from, their Principal PrivateResidence(PPR);
o  Debtor likely to be able to comply with proposed PIA;
o  Cost of residing in PPR are not disproportionately large;
o  Fair on each class  of creditors that did not approve PIA; ( “Class” in the context of the review process means a group of more than one creditor who have similar claims on the borrower, or a single creditor, where the Court deems that appropriate.)
o  Not unfairly prejudicial to the interests of any interested party;
   o  One class  of creditors have accepted the proposed PIA by a majority of over 50% of the value of debts owed by that class.


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## Brendan Burgess (3 Dec 2015)

Personal Insolvency Amendment Act 2015


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## Brendan Burgess (3 Dec 2015)

*Court review of proposed Personal Insolvency Arrangement*

*21.* The Principal Act is amended by the insertion of the following after section 115:

*“115A.
(1) Where—*

(a) a proposal for *a Personal Insolvency Arrangement is not approved* in accordance with this Chapter, and

(b) the debts that would be covered by the proposed Personal Insolvency Arrangement include a relevant debt,* 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 under subsection (9).*

*(2) An application under this section shall be made not later than 14 days after the creditors’ meeting *referred to in subsection (16)(a) or, as the case may be, receipt by the personal insolvency practitioner of the notice of the creditor concerned under section 111A(6) (inserted by _section 17_ of the _Personal Insolvency (Amendment) Act 2015_), shall be on notice to the Insolvency Service, each creditor concerned and the debtor, *and shall be accompanied by—*
(a) a statement of the grounds of the application, which shall include—
_ list of paperwork deleted to make the post readable_

*(3) A notice to a creditor *under subsection (2) *shall be accompanied by a notice 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.

*(4) A creditor who lodges a notice* under subsection (3) shall at the same time *send a copy of the notice to the Insolvency Service,* the personal insolvency practitioner and each creditor concerned.

*(5)* Where an application is made under this section before the expiry of the period of the protective certificate, *such protective certificate shall continue in force until—*
(a) the Personal Insolvency Arrangement comes into effect under subsection (13), or
(b) one of the following occurs—
    (i) the time for bringing an appeal against a refusal of the appropriate court to make an order under subsection (9) has expired without any such appeal having been brought,
    (ii) such appeal has been withdrawn, or
    (iii) the appeal has been determined.

*(6) The appropriate court*, for the purpose of an application under this section, *shall hold a hearing,* which hearing shall be on notice to the Insolvency Service, the personal insolvency practitioner and each creditor concerned.

*(7) A hearing under this section shall be held with all due expedition.*

*(8) The court shall consider whether to make an order under subsection  
        (9) only where—*
(a) it is satisfied that—
     (i) the eligibility criteria specified in section 91 have been satisfied,
     (ii) the mandatory requirements referred to in section 99 have been complied with, and
     (iii) the proposed 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,

and

(b) it considers that, having regard to the information before it, including information contained in a notice under subsection (3), no ground specified in section 120 applies in relation to the debtor or the proposed Arrangement.

*(9) The court, following a hearing under this section, may make an order confirming the coming into effect of the proposed Personal Insolvency Arrangement only where it is satisfied that—*
(a) the terms of the proposed Arrangement have been formulated in compliance with section 104,
(b) having regard to all relevant matters, including the terms on which the proposed Arrangement is formulated, there is a reasonable prospect that confirmation of the proposed Arrangement will—
    (i) enable the debtor to resolve his or her indebtedness without recourse to bankruptcy,
    (ii) enable the creditors to recover the debts due to them to the extent that the means of the debtor reasonably permit, and
    (iii) enable the debtor—
                      (I) not to dispose of an interest in, or
                      (II) not to cease to occupy, all or a part of his or her principal private residence,

(c) having regard to all relevant matters, including the financial circumstances of the debtor and the matters referred to in subsection (10)(a), the debtor is reasonably likely to be able to comply with the terms of the proposed Arrangement,

(d) where applicable, having regard to the matters referred to in section 104(2), the costs of enabling the debtor to continue to reside in the debtor’s principal private residence are not disproportionately large,

(e) 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,

(f) the proposed Arrangement is not unfairly prejudicial to the interests of any interested party, and

(g) other than where the proposal is one to which section 111A applies, at least one class of creditors has accepted the proposed Arrangement, by a majority of over 50 per cent of the value of the debts owed to the class.


*(10) In considering whether to make an order under subsection (9), the court shall have regard to:*
(a) the conduct, within the 2 years prior to the issue of the protective certificate under section 95, of—
     (i) the debtor in seeking to pay the debts concerned, and
     (ii) a creditor in seeking to recover the debts due to the creditor;
(b) the following, where details of them are contained in a notice lodged under subsection (3) by a creditor—
    (i) a submission made by the creditor under section 98(1) or an indication given by the creditor under section 102(1) and the date on which such submission was made or indication was furnished, and
    (ii) any alternative option available to the creditor for the recovery of the debt concerned.

*(11) 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 under subsection (9).

*(12) On receipt of a notification under subsection (11) of the making of an order under subsection (9), the Insolvency Service shall registe*r the Personal Insolvency Arrangement concerned in the Register of Personal Insolvency Arrangements.

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

*(14) The court, in an application under this section, shall make such other order as it deems appropriate, *including an order as to the costs of the application.

*(15) For the purposes of its consideration of an application under this section*, the appropriate court may accept—
(a) the certificate of the personal insolvency practitioner referred to in subsection  (2)(d)(i) 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,
(b) the certificate of the personal insolvency practitioner referred to in subsection    (2)(d)(ii) as evidence that the proposed Arrangement has not been approved in accordance with section 111A, and
(c) the statement of the personal insolvency practitioner referred to in subsection     (2)(e) as evidence of any matter referred to in subsection (8) which is the subject of that statement.

*(16) For the purposes of this section, a proposal for a Personal Insolvency Arrangement is not approved *in accordance with this Chapter where—
(a) at a creditors’ meeting held under this Chapter, it is not approved in accordance with section 110 or, as the case may be, deemed to have been approved under section 108(8) (a) (as amended by _section 15 (b)_ of the _Personal Insolvency (Amendment) Act 2015_), or
(b) in the case of a proposal for a Personal Insolvency Arrangement to which section 111A applies, the creditor concerned has notified the personal insolvency practitioner in accordance with section 111A(6) that the creditor does not approve of the proposal.

*(17) 
(a) For the purposes of this section, and subject to paragraph (b), the court may consider—*
(i) one creditor, or
(ii) 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.

(b) In deciding under paragraph (a) 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 referred to in subsection (2)(a) and the certificate referred to in subsection (2)(d)(i) —
(i) the overall number and composition of the creditors who voted at the creditors’ meeting, and
(ii) 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.

*
(18) In this section—*
‘relevant debt’ means a debt—
(a) the payment for which is secured by security in or over the debtor’s principal private residence, and
(b) in respect of which—
     (i) the debtor, on 1 January 2015, was in arrears with his or her payments, or
     (ii) 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.”.


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## Brendan Burgess (3 Dec 2015)

Section 104 of the original Act

*104*.— (1) In formulating a proposal for a Personal Insolvency 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.

(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 _subsection (2)_, 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).

(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 Personal Insolvency Arrangement on terms that will not require the debtor to cease to occupy his or her principal private residence.

(4) A Personal Insolvency 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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## Brendan Burgess (3 Dec 2015)

*What if my PIP refuses to appeal? *


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## HelpingHand (3 Dec 2015)

Jim,

What is the likelihood of a Court granting a repossession order on a home, when it is brought to their attention that the PIA has been refused by the bank and subsequently found to be reasonable by a court ?


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## HelpingHand (3 Dec 2015)

Thank you Jim, this would be my understanding as well.


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