Rise in suicides due to debt, not social media: Finance expert
on 15/01/2013 00:00:00
"We have a big issue with suicide and we blame Facebook, which is rubbish," said Mr Carroll. "The reality is these [debts] are the issues that are causing people to have major problems.
"That's why I say... from a social point of view this is probably the most important step that the Government has taken in the last five years in alleviating stress for people."
The new Insolvency Service of Ireland, expected to begin processing cases in May, will offer three restructuring arrangements for people trapped by mortgage arrears, credit card bills, overdrafts, unpaid loans, and other debts they can not pay, as well as a revamped bankruptcy option.
It will provide an out-of- court system enabling debts of up to €3m to be written off or reduced to an affordable level, plus a new court-based bankruptcy process for bigger debts or cases where settlements are not reached.
While praising it as a major step towards tackling the mountain of personal debt burying households, Mr Carroll warned there could be teething problems because of the volume of demand for the service, and the need for co-operation from the banks.
"There is going to be a significant push at the beginning because people have been waiting this for some time. They [the Government] have said they are going to employ 80 people and eight judges have been appointed, but we'll have to see if that's enough."
His biggest concern was the veto held by the banks as anyone applying to the Insolvency Service must have 65% of their creditors agree a write-off of some or all of their debt. But he said the attitude of the banks would become clear very quickly and he trusted the Government would amend the legislation if needed by lessening the requirement for creditor agreement.
He said there could be no shying away from the fact that what was inherent in the new insolvency arrangements was debt write-off, which the banks had so far refused to publicly acknowledge. "Whatever the banks want to say, this is absolutely debt forgiveness. But it has to happen. This is the reality if we are ever going to get people out of debt and let them live their lives again."
Mr Carroll heads up Dublin based company Neo Financial Solutions one of the many financial advisory firms anticipating a surge in demand from clients seeking to be brought through the insolvency process.
MABS or similar organisation will be able to represent people with low levels of debt applying for a Debt Relief Certificate but for those with bigger and more complex debts who must opt for a debt settlement arrangement or personal insolvency arrangement, an approved practitioner will have to be used. A register of approved practitioners is to be finalised.
* The 30-page guide can be downloaded fromneofinancialsolutions.com.