What can a PIP do for me?
Let’s face it, the only reason we have for thinking about a Personal Insolvency Practitioner, (also known as a PIP) is that we have debt problems that we want to go away. The least we want out of any engagement with a Personal Insolvency Practitioner is to get our debts restructured and maybe if we are lucky get some of them written off. We want to get back control of our personal finances and focus on the positives in life. We want to be permanently rid of the fear, anxiety and stress brought on by our debt problems and to not be ashamed of our financial circumstances.
So, I know what I bring to the table and what I want to get out of it. What does a PIP bring? The Insolvency Service of Ireland or ISI sets out in its excellent literature what a PIP offers. In a nutshell it is debt advice based on qualifications and expertise and offered subject to regulation by ISI with the ultimate goal of helping the debtor to achieve a permanent solution.
The first step is to arrange a meeting with a PIP bringing details of your debts, assets, living expenses and income as well as back up documentation relating to creditors, mortgage, missed payments and arrears. The PIP will tell you what to bring. At the meeting you can ask questions just as the PIP will do before setting out your options, confirm your eligibility for a solution and suitability for an arrangement such as a Personal Insolvency Arrangement (PIA), Debt Settlement Arrangement (DSA), Debt Relief Notice (DRN) or even bankruptcy.
The process includes calculating your allowable reasonable living expenses and providing information on the costs and fees that would arise in respect of each option. You decide what option you wish to pursue, if any. You can of course walk away at this point without incurring any costs. Any PIP who charges for such initial advice should of course have pointed this out to you upfront.
Prescribed Financial Statement
If you decide to proceed, the PIP will confirm in writing that they are willing to act for you and proceed in assisting you to prepare a Prescribed Financial Statement or PFS. You will have various other forms to complete and you will have to swear a statement that your application is truthful.
The next stage is that the PIP applies to court for a Protective Certificate or PC, which gives you court protection from your creditors while your proposal for an arrangement is being prepared and for which there is currently no charge.
Your PIP will engage with your creditors during the preparation of your proposal culminating in a meeting of your creditors to decide whether they accept your proposal be it for a PIA or a DSA. Proposals may vary hugely but they usually contain an element of debt write-off as well as your offer of repayment of the balance of your debt. The court has a role in the formal approval of your accepted proposal which then becomes a binding legal agreement.
The final role of the PIP is to supervise your arrangement for the agreed term of five or six years, ensuring you make the payments you have committed to and distributing these funds to creditors as agreed while retaining funds as also agreed to cover your PIP’s fees and expenses. Your PIP’s post approval duties are extensive with a high level of oversight and administration. The operation of the arrangement is reviewed regularly and reports issued to creditors at least annually. If the arrangement needs to be significantly varied due to changes in your financial circumstances then the PIP will convene further meetings of your creditors and report the outcome to you, your creditors, the ISI and the court.
On successful completion of your arrangement, your PIP reports to ISI, to your creditors and to you that all the terms of your arrangement have been complied with and all dividends to creditors have been distributed. You are now debt free and can start to repair your credit file and resume normal financial activities.
Article written by: Paddy Byrne