Personal and corporate insolvency EUGENE MCDARBY 30/05/2017 www.uhyinsolvency.ie

Agenda summary Background Case Studies Post PC Process Key Sections of the Act Points of Interest 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.

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

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.

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

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.

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 8

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 9

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 10

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 11

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 12

Topical items Bankruptcy process Section 115A appeals Vulture Funds Treatment of RLE’s and special circumstances Bankruptcy process

Points to note Repossession cases: Loan sustainability Land and Conveyance act PIP Fees Debtor change of Circumstance/ongoing management RLE’s – guideline 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 eugene.mcdarby@uhyinsolvency.ie