# Why opt for a 6 year PIA Personal Insolvency when you can go for a 3 year bankruptcy?



## Brendan Burgess (25 Jan 2012)

I have asked this question to UK practitioners as well and I have never got a satisfactory answer. 

*Advantages of a PIA over bankruptcy
*I might get to keep my house 
I avoid the stigma of bankruptcy
It's private 

*Disadvantages of PIA
*The lenders might not agree to it. 
It lasts at least 6 years compared to 3 years

*Advantages of UK bankruptcy
*The creditors are unlikely to object 
I will be out within 12 to 18 months


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## Alwyn (25 Jan 2012)

Brendan, do you believe the foreign lenders in Ireland will agree to a PIA or will this be only available to the mortgage holders in foreign banks based in the ROI?


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## Brendan Burgess (25 Jan 2012)

I don't understand your question.

I don't think that the Irish banks' attitude should be any difference from the foreign banks' attitude, unless the government tells the state owned banks to agree to them. 

Brendan


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## frostie (15 Mar 2012)

In some cases, it may not be possible for a person to keep their job if they went bankrupt, for example Gardai, accountants, solicitors, some other public servants. The PIA/DSA/IVA type legislation means that they can avoid beiong forced to lose their livelihoods.

On the other point, non-resident banks will be more likely to agree to these proposals than Irish banks, as they are used to dealing with them on a regular basis in the UK already


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## Wishes (15 Mar 2012)

frostie said:


> In some cases, it may not be possible for a person to keep their job if they went bankrupt, for example Gardai, accountants, solicitors, some other public servants. The PIA/DSA/IVA type legislation means that they can avoid beiong forced to lose their livelihoods.
> 
> On the other point, non-resident banks will be more likely to agree to these proposals than Irish banks, as they are used to dealing with them on a regular basis in the UK already



Hi Frostie, they say you learn something new everyday and sure enough I have!  I never knew a public servant etc. could lose their job if they went bankrupt.  That is mind boggeling.  Surely, it would be best for all concerned if they got to keep working.


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## Mrs Vimes (15 Mar 2012)

frostie said:


> In some cases, it may not be possible for a person to keep their job if they went bankrupt, for example Gardai, accountants, solicitors, some other public servants. The PIA/DSA/IVA type legislation means that they can avoid beiong forced to lose their livelihoods.




I recall an article in the Irish Times around May of 2010 (I think it was [broken link removed] one by Caroline Madden, but don't have a subscription to check) where she said that solicitors *can* continue to practise if they are declared bankrupt but cannot handle clients' money so presumably cannot be self-employed.

I understand that in the UK they cannot practise at all.


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## bullworth (15 Mar 2012)

Brendan Burgess said:


> I avoid the stigma of bankruptcy



I don't believe there is a stigma any longer for most things. We have been exposed to brass necks in high places for far too long and they have led the way showing us by example that you can get away with anything and keep going and the sky doesn't fall in ( in cases which should be stigmatized far more than just a bankruptcy like unbelieveable incompetence and corruption).


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## Kerrigan (17 Mar 2012)

+1

There's too many people in the same boat for anybody to feel they are be stigmatised by bankruptcy.


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## cormirl (22 Mar 2012)

bullworth said:


> I don't believe there is a stigma any longer for most things. We have been exposed to brass necks in high places for far too long and they have led the way showing us by example that you can get away with anything and keep going and the sky doesn't fall in ( in cases which should be stigmatized far more than just a bankruptcy like unbelieveable incompetence and corruption).



I agree. Don't let the idea of social stigmatism deter one from getting a new start in life. The financial system has failed us in Ireland and the blame is not shared out equally.The housing gamble is left to the taxpayer to pay for all the mistakes..Its unfair and unjustified.The clock needs to be reset,the banks have already got their clocks reset..


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## bullworth (22 Mar 2012)

cormirl said:


> I agree. Don't let the idea of social stigmatism deter one from getting a new start in life. The financial system has failed us in Ireland and the blame is not shared out equally.The housing gamble is left to the taxpayer to pay for all the mistakes..Its unfair and unjustified.The clock needs to be reset,the banks have already got their clocks reset..




Well we are hardly Japanese . In Japan it is not unheard of for top bosses and politicians to literally fall on their samurai swords if they mess up . Here Bertie wonders why ''cribbers and moaners'' don't commit suicide and those who mess up often deliberately or with a high level of personal responsibility and blame get golden handshakes, large inflation busting pensions and related benefits. So no way should stigma be confined to the little guy while the pork bellies live under different rules. In fact I think we can firmly rule out the idea of stigma as an argument in financial planning. People need to draw a line under their debts, go bankrupt if needs be and then start again with a positive attitude. Stigma in this case is a mental disease which wont help them rebuild. Crucially I think bankruptcy should be done and completed as quickly as possible as nobody is getting any younger and bankrupts need to get back into creating wealth in the economy.


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## Centaur (22 Mar 2012)

As I understand it, bankruptcy isn't as clean as it sounds as you can continue to have to make payments for up to 5 years after the initial 3.  

The biggest consequence of any of the arrangements is the they will be on public record and financial institutions will not normally be able to lend to you if you're on the it to avoid being accused of careless lending.


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## bullworth (23 Mar 2012)

Centaur said:


> The biggest consequence of any of the arrangements is the they will be on public record and financial institutions will not normally be able to lend to you if you're on the it to avoid being accused of careless lending.




Why would anyone want to borrow more anyway when they have just freed themselves from a millstone of nightmare debt ? If they havent learned their lesson then there truly is no hope for them ...


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