Download Personal and corporate insolvency

PERSONAL AND CORPORATE
INSOLVENCY
EUGENE MCDARBY
30/05/2017
An independent member of UHY International
www.uhyinsolvency.ie
Agenda summary
• Background
• Case Studies
• Post PC Process
• Key Sections of the Act
• Points of Interest
Live life
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2
INFORMAL / FORMAL
BANK PROPOSALS
 Historical Debt Landscape:





Creditor Linear approach to debt.
“Whoever shouts loudest get paid first” – unsecured creditors
Central bank/ MARP/CCMA – secured creditors
Legal route - repossession
hard to achieve debt write offs with banks preference of banks is to ‘park residual debt’ or
sell debt.
 Core reason for High level of Mortgage arrears – circa 34k in long term arrears.
 Legal Aid board Scheme.
 Section 115a
 The new insolvency structure can act as a baseline for any agreement with the bank.
 Possible Asset Disposal Strategy-perhaps with DSA/PIA to complete (multiple creditors) or
multiple variations of same based on affordability.
Live life
free from
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debt
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Cases
Practical approved examples:
• JH – Sligo – PIA
− Manufacturing employee
− Family home loan circa €380k
− Value €150 k
− €170k unsecured debts , CU/Trade Creditors
− Revenue €95k
• Christy – Dublin – DSA
− Haulage Contractor
− 4 properties including family home
− €278,000 unsecured debts
Live life
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debt
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Personal Insolvency Arrangement
Secured debts:
−KBC Loan €387k written down to property value of €150k
Revenue preferential of €10k
−Various Unsecured total €170k
6 year dividend agreed at 2.06%
VS Bankruptcy at 0% ??? return for unsecured creditors.
Live life
free from
stressful
debt
An independent member of UHY International
Debt Settlement Arrangement
Secured Debts of €1.238 M on 4 properties all sustainable
Unsecured debts of €279 k
Deal agreed at 18.6% dividend over 5 years ( €980.52)
VS Bankruptcy at 0% ???? for Unsecured
Live life
free from
stressful
debt
An independent member of UHY International
Advice for scheme
Typical Information
Current financial position and history of debtor ( PFS/SFS)
Presentation of options to the debtor including formal insolvency vs
Bankruptcy
• Full options up to section 52 of Personal Insolvency Act
• Typically 2/3 meetings.
Live life
free from
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debt
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Process post PC
Notify creditors by 5pm the day after PC has been issued
Request Proof of Debt from Creditors
 Request must be in writing
 Creditors have 14 days to respond
 Include the following with your request:
Copy of PC
Copy of Prescribed Financial Statement
A copy of S97 & S98 of the Personal Insolvency Act 2012
 Request can be sent via Email or Post
 Sample letter attached
Live life
free from
stressful
debt
An independent member of UHY International
Receipt of Proof of Debt
On receipt of POD verify amounts against PC
If there are any material discrepancies the PFS will need to be
amended:
Where a PFS is amended a new Statutory Declaration will have to
be signed by the client
Live life
free from
stressful
debt
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Proposal
On completion of the 14 day POD period
 Prepare draft proposal document
 Prepare draft PIP Report/Arrangement (See example)
 Circulate draft proposal to creditors (not a requirement) for
review
Allow 2/3 weeks for creditors to review draft documents
Review creditors feedback, update draft documents
Call Creditors Meeting
Live life
free from
stressful
debt
An independent member of UHY International
Calling the Creditors Meeting
 Allow 14 Days Notice
 Allow 1 day for post
 Day of meeting is not included
 Should allow 16 days
 Documents to be sent to Creditors (and the ISI)
 Notice of Creditors Meeting
 PFS
 PIP Statement
 Instrument appointing a Proxy
 Post/E-mail to Creditors and upload to case on the ISI system
Live life
free from
stressful
debt
An independent member of UHY International
Key sections of the Act
 S99 Mandatory Conditions of a PIA
h) a Personal Insolvency Arrangement shall not require that the debtor
dispose
of his or her interest in the debtor’s principal private residence or to
cease
to occupy such residence unless the provisions of section 104(3) apply;
(k) subject to sections 102 to 105, a Personal Insolvency Arrangement shall
make
provision for the manner in which security held by a secured creditor is
to be treated
Live life
free from
stressful
debt
An independent member of UHY International
Topical items
• Section 115A appeals
• Vulture Funds
• Treatment of RLE’s and special circumstances
• Bankruptcy process
Live life
free from
stressful
debt
An independent member of UHY International
Points to note
• Repossession cases:
 Loan sustainability
 Land and Conveyance act
•
PIP Fees
• Debtor change of Circumstance/ongoing management
• RLE’s – guideline
Live life
free from
stressful
debt
An independent member of UHY International
14
Contact details
Eugene McDarby
Personal Insolvency Practitioner
Specialising in personal insolvency
and debt issues:
Many years experience in providing
people in financial difficulties with
practical advice
Contact Eugene at
[email protected]
Live life
free from
stressful
debt
An independent member of UHY International
15