Home Knowledge Commencement of Certain Provisions of Personal Insolvency Act

Commencement of Certain Provisions of Personal Insolvency Act

The Minister for Justice and Equality has made an order providing for the commencement of certain provisions of the Personal Insolvency Act 2012 with effect from Friday 1 March 2013.

The provisions to be commenced with effect from this date are as follows:

  • Part 1 (with the exception of section 6) dealing with preliminary and general matters. (Section 6, yet to be commenced, repeals certain sections of the Bankruptcy Act 1988).
  • Part 2 (with the exception of section 13) providing for the establishment and functions of the new Insolvency Service of Ireland and for related matters. (Section 13, yet to be commenced, provides for the making of a superannuation scheme for the staff of the Insolvency Service)
  • Sections 25, which is a general interpretation provision.
  • Section 47 conferring on the Insolvency Service the power to authorise persons to perform the function of an Approved Intermediary under the Act. An Approved Intermediary can act on behalf of debtors applying for a Debt Relief Notice.
  • Sections 126 to 141 – Sections 126 to 132 prescribe certain offences under the Act (e.g. concealment or falsification of documents or fraudulent disposal of property). Sections 133 to 141 provide for miscellaneous matters, including the establishment and maintenance of public registers of insolvency arrangements and the publication by the Insolvency Service of guidelines and/or codes of practice.
  • Part 5 dealing with the regulation of Personal Insolvency Practitioners, who are authorised to act on behalf of debtors seeking to enter either a Debt Settlement Arrangement or a Personal Insolvency Arrangement. 
  • Schedule 2 detailing the various provisions applicable to oral hearings conducted for the purposes of an investigation in relation to Personal Insolvency Practitioners.
  • Schedule 3 providing for the establishment of a Complaints Panel and Complaint Committee.

Parts 3 and 4 of the Act remain to be commenced by further Ministerial Order, the timing of which is as yet unknown.

Part 3 is the key part of the Act which provides for the following three new non-judicial debt settlement systems:

(i) Debt Relief Notices
(ii) Debt Settlement Arrangements 
(iii) Personal Insolvency Arrangements

Part 4 provides for various reforms to the Bankruptcy Act 1988, including:

  • The reduction of the automatic discharge period from 12 years to 3 years, subject to certain conditions;
  • Increasing to 3 years the review period for certain pre-bankruptcy transactions.

With the Insolvency Service now established and the necessary power afforded to it to commence its duties under the Act, we can expect that it will issue guidelines on the practical operation of the Act in early course.

View previous articles on the Act click here.

Contributed by Delia McMahon