# Who will the new Personal Insolvency Trustees be?



## Alwyn

Who can you elect to be a PIA Trustee?  Accountant, Solicitor??  If so, are either of these professionals selected by the bank or the mortgage holder themselves?


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## Commercial

I'd be interested in the answer to this question?
Who appoints the trustees?
Who pays for them?
How much do they charge?


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## Brendan Burgess

There was a piece in Sunday's Paper, probably the SBP, saying that a lot of mortgage brokers are looking forward to becoming Insolvency Trustees. 

Brendan


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## Commercial

Yeah, it was in the SBP from my recollection. The bill will have to be passed first before trustees can be appointed I presume.
Nice piece as well Brendan


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## Brendan Burgess

Commercial said:


> Nice piece as well Brendan



Thanks.


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## Brendan Burgess

In the UK licensed insolvency trustees are usually accountants and solicitors and I understand that the plan is to restrict it to them. 

That is fair enough from a quality point of view, but as partners in accountancy firms are paid €375 per hour, it could be a very expensive process. 

Some people have set up in Ireland as liquidators without any qualification, and there is a danger that this could also be the outcome. 

Many liquidators, especially of small companies, realise only sufficient assets to cover their fees. There is little or nothing left for the creditors. 

Brendan


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## jack2009

Alwyn said:


> Who can you elect to be a PIA Trustee? Accountant, Solicitor?? If so, are either of these professionals selected by the bank or the mortgage holder themselves?


 
It has not yet been determined who can act as a PIA, head 54 states 
*“Personal Insolvency Trustee”* shall be construed for the purposes of this Part as a person *[licensed] [authorised]* who performs the functions of a personal insolvency trustee under the provisions of this Part."
Their are rumours of mortgage brokers throwing their hand at it!

I take your point regarding the charge out rate of accountants but the system works in the UK so personally from what I understand of the Bill the big problem will be the cost of carry out the work for a person who has no money (double negative!)


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## Brendan Burgess

The High Court is reducing the fees of insolvency practitioners to €375 + VAT per hour. I understand tha, for  the non-court work , the charge tends to be €200 + Vat per hour or €250. 

It's hard to see how these PIAs can work.

Brendan


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## 44brendan

The whole area of insolvency costs and high accountant/solicitor charges remains as a significant deterrent to the process. I.e. I have personally been involved in insolvency cases where the secured creditors end up with a fraction of the funds realised due to the inability of the Bank to cap the outlay and charges applied.
The system is now undergoing some changes. i.e. Some of the Banks are only appointing receivers on the basis of a fixed fee level, with any additional work being subject to prior agreement. This is the only basis that can work for a PIA. I.e. A set fee regulated by the authorities. There are plenty of good accountants solicitors out there (outside of the major firms) who would be more than happy to take on this work at a reasonable level of compensation.


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## jack2009

Brendan Burgess said:


> The High Court is reducing the fees of insolvency practitioners to €375 + VAT per hour. I understand tha, for  the non-court work , the charge tends to be €200 + Vat per hour or €250.
> 
> It's hard to see how these PIAs can work.
> 
> Brendan



The High Court is not only reducing rates but putting liquidators under pressure to justify their level of fees eg why were so many hours doing x when x was not required.


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## ballaboy

Spoke to a  Solicitor lately,he told me total lecture time on Bankruptcy was a half hour when he was doing Law,that would not be encouraging.There are people around the country providing this service for years when Solicitors and Accountants were looking after the Developers.Think experince should be the yard stick


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## callaghanj

The average fee in the Uk for an IVA is less than £5,000 for 5 years work and fees are approved and fixed by creditors. I expect creditors in Ireland to follow suit and keep fees at acceptable levels. The IVA pocess is highly regulated and all IP's must sit exams specific to their indusrty ie insolvency and must also have relevant experience to obtain a practicising cert. Ireland should follow suit.


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## Steve Thatcher

callaghanj said:


> The average fee in the Uk for an IVA is less than £5,000 for 5 years work and fees are approved and fixed by creditors. I expect creditors in Ireland to follow suit and keep fees at acceptable levels. The IVA pocess is highly regulated and all IP's must sit exams specific to their indusrty ie insolvency and must also have relevant experience to obtain a practicising cert. Ireland should follow suit.



I think this is right. I will be applying to be an IP. I suspect that the PIA and the DSA will be on the basis of a fixed fee for the proposal and then a management fee for each year in operation

Steve Thatcher


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## Bronte

Can we clarify the terms?

IP - Insolvency practioner

PIA - Personal Insolvency administrator

DSA - ?


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## Steve Thatcher

Bronte said:


> Can we clarify the terms?
> 
> IP - Insolvency practioner
> 
> PIA - Personal Insolvency administrator
> 
> DSA - ?



Sorry Bronte,

IP insolvency practitioner, PIA personal insolvency arrangement and DSA debt settlement arrangement

Steve


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## Palerider

Any further clarity on who can apply or how to apply to become an insolvency practioner, understand the Bill has gone through committee stage and imagine this piece remains unclear..?


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## Kerrigan

Palerider, its all still very unclear but my bet is firmly placed on the debt management companies that are currently in existence.


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## Steve Thatcher

Kerrigan said:


> Palerider, its all still very unclear but my bet is firmly placed on the debt management companies that are currently in existence.



First they will need to create the Insolvency Service and it will be the service I understand who will approve and regulate the Personal Insolvency Trustees. 
In my opinion unless these are people with proper insolvency experience, the process will flounder.
The PIA's and DSA are complicated to set up and will need administration year on year, something only professional organisations could achieve immediately

Steve Thatcher
Www.debtoptions.ie


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## Kerrigan

I think if the service is not properly regulated it will be open to abuse.


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## Wishes

Is it still unclear who will be appointed a PIT?

I'm concerned by how little information there is out there regarding the appointment of trustees.


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## Palerider

Anybody have any ideas on this query yet..?


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## Jim Stafford

As per Section 161 (se below) of the new Act, the Insolvency Service will appoint the PIPs.


*161*​​​​.—The Insolvency Service, with the consent of the Minister, 10
may and, if directed by the Minister to do so and in accordance
with the terms of the direction, shall, following consultation with the
Minister for Finance and with any other person or body as the Insolvency
Service deems appropriate or as the Minister directs, by regulations
provide for any of the following, for the purposes of the con- 15
trol and supervision of personal insolvency practitioners and the
protection of debtors and creditors who are or may become parties
to Debt Settlement Arrangements or Personal Insolvency
Arrangements:
(_a_) the procedures governing— 20
(i) the authorisation of persons to carry on practice as
personal insolvency practitioners; and
(ii) the termination, at a person’s request, of his or her
authorisation to carry on practice as a personal insolvency
practitioner; 25
(_b_) the standards to be observed in the performance of their
functions by personal insolvency practitioners with particular
reference to—​
(i) the public interest;
(ii) the duties owed to debtors and creditors who are or 30
may become parties to Debt Settlement Arrangements
or Personal Insolvency Arrangements;
(iii) the professional and ethical conduct of personal insolvency
practitioners;
(iv) the confidentiality of the information of debtors and 35
creditors who are or may become parties to Debt
Settlement Arrangements or Personal Insolvency
Arrangements; and
(v) conflicts of interest;
(​​​​_c_) the qualifications (including levels of training, education 40
and experience) or any other requirements (including
required standards of competence, fitness and probity
and required minimum levels of professional indemnity
148
insurance) for the authorisation of persons to carry on
practice as personal insolvency practitioners;
(_d_) the terms on which indemnity against losses is to be available
to personal insolvency practitioners under any policy
5 of indemnity insurance and the circumstances in which
the right to such indemnity is to be excluded or modified;
(_e_) the records to be maintained and the information and
returns to be provided to the Insolvency Service by personal
insolvency practitioners; and
10 (_f_) the circumstances and purposes for which a personal insolvency
practitioner may charge fees or costs or seek to​
recover outlays.

Jim Stafford


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## Palerider

I have an interest in making an application to become an Insolvency Trustee, I believe my background and qualifications may make me well suited and qualified. Whilst not a qualified Accountant I do have years of practical experience of working with debtors that are struggling and negotiations with their lenders, I am happy to declare my bias that not only Accountants are capable of completing this task.

That said I am still unclear about the application process, is it still up in the air..?


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## Jim Stafford

It is expected that the Insolvency Service of Ireland (the statutory body overseeing the new regime) will have application forms available for people who wish to apply for registration as Personal Insolvency Practitioners in March.

The Insolvency Service has not yet formally specified what competence levels will be required.  However, in various talks that Lorcan O'Connor (the Director Designate) has recently given, he has indicated that the Service will be expecting applicants to have the necessary legal and financial skill sets, combined with a deep knowledge of the Personal Insolvency Act 2012  together with strong negotiation skills. I would suggest that Personal Insolvency Practitioners should also have strong counselling skills!

Jim Stafford


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## wbbs

I got the impression at a recent seminar that there will only be a handful of big probably accountancy firms licenced, offices in main cities  and a  team on the road  then to cover  the rest of the country.   Don't know how they get the referrals, maybe same as the present debt management companies, internet searchs or ads on TV.   

I spoke to one of the speakers who worked for this type of company in UK and he said that was how the system worked over there so presume we will follow on the same way.   Didn't get the impression there would be many job opportunities in this, seemed to be more geared at existing accountancy and legal firms.

Also spoke to an accountant who was there to see if he could generate some extra business this way as he was already doing quite a bit of debt advice, just a one man band operation, he came away with the impression that he would actually lose business as it would not be practical to apply to be a PIP due to costs/processes so his current clients would no longer be paying him.


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## Dr.Debt

I think its correct to say that the Accountancy firms and Legal firms will be hugely interested in this but there will be opportunities for others who have the necessary skills.

I think the biggest challenge for PIPs will be making arrangements to get paid from the debtors. Getting an upfront payment of 5000 may not be such a big deal in the bigger cases but in the smaller cases, its hard to see how a debt strapped client is going to pay 5000 euro over the counter to get started. If PIPs are not careful, they could end up doing a lot of work for nowt.

Jeremy Masding of PTSB is on record as saying that PIPs should not be allowed advertise to attract clients and this is apparently the law in the UK. No ambulance chasers allowed. If a similar rule is introduced here, it may be difficult for individual PIPs to get up and running.

Jim, Its interesting that you say that the Insolvency Service of Ireland will have application forms available in March for PIPs. I had previously understood that the Insolvency Service Ireland will be responsible for regulating PIPs but will have no part in the hiring of PIPs. Maybe I got this wrong.

I too, intend to apply, to become a PIP.


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## Jim Stafford

Just to clarify, the Insolvency Service of Ireland will not be hiring PIPs, but will be responsible for authorising individuals to act as PIPs.  The initial step in the authorisation procedure will be the completion of an application form.

Jim Stafford


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## wbbs

I understood the debtors didn't pay anything upfront as such, the payment to the PIP came from the creditors pot of money assuming the debtor had some income to be making regular payments.


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