Will Europe ever get a Fresh Start? Debt settlement plans as a Substitute for Quick and easy Bankruptcy. The inadequacy of traditional debt enforcement methods in consumer indebtedness. (European Consumer Law Group). Over-indebtedness is not characterised just by debts, which are too great; it is also the result of multiple debts. But, traditional recovery proceedings are individual procedures. Each creditor is obliged to pursue the debtor separately while using the maximum resources so as to be the first to be compensated. The effect of the harassment, which results from this, other than it swells out of all proportion the debt principal, paralyses a debtor who often does not know his rights. Of the 15 Member States of the European Union (pre accession), only Ireland and the southern countries comprising Italy, Spain, Portugal and Greece, have not made specific interventions in this area. The most recent legislation in Ireland is the Bankruptcy Act, 1988. However, this legislation is seldom used and entirely unsuitable for consumer over-indebtedness. The procedure is costly and if the bankrupt person cannot pay the entire amount of the debts, s/he can only be released when the court believes their entire estate has been realised and only then after a period of 12 years. Debt Procedure – Enforcing Judgement Where no defence has been entered to the creditor’s claim, or a defence has been entered and a hearing has determined that the money claimed is owed, the creditor effectively has possession of a court order requiring the debtor to pay the amount claimed. Assuming that the debtor is not in a position to pay the entire amount in one payment , the creditor’s choice at this stage is to take enforcement proceedings. The usual route bin consumer debt cases in an Instalment Order under the Enforcement of Court Orders Acts 1926/1940. The debtor is ordered to pay a set amount by way or instalment on a weekly or monthly basis until the judgement is paid off in its entirety. Failure to pay on foot of an instalment Order leaves the creditor with the option to have a Committal Summons issued. In effect this may result in imprisonment for non payment of a civil debt even though the offence is failure to comply with a court order. As the Department of Justice, Equality and Law reform does not have any proposals for the reform od the law in relation to non-payment of civil debt, the Money Advice and Budgeting service entered discussions with the Irish Bankers’ Federation to set up a Debt Settlement Programme on a pilot basis. Pilot Debt Settlement Programme The Pilot Debt Settlement Programme agreed by the MABS and the Irish Bankers' Federation was supported by the other main creditors. This Pilot Scheme provides a non-judicial alternative for resolving cases of multiple consumer debt that are likely to prove intractable and otherwise end up in court. This scheme aims to help those who are in chronic debt and face legal action for the repayment of those debts through the courts system. This is an alternative to the legal system of debt enforcement and will help families living in fear of repossession of their home, living under stress and tension and will help get them out of a poverty trap and restart their life. This fresh start pilot scheme recognises that some people may find it almost impossible to repay their debts and that court action would be effectively futile, only adding to misery and hardship. The pilot scheme aims to present this scheme to those who are over indebted as soon as banks and building societies reach the point of legal action. The scheme involves a Money Adviser sitting down with the client, working out all living costs, potential affordable repayment models and a proposed repayment plan is presented to all the creditors. Creditors will benefit by saving legal fees and related expenses in trying to recover what is effectively a bad debt. Anyone who is on the point of legal action and unable to pay may apply to participate in the pilot scheme by contacting their local MABS office. The Money Advice and Budgeting Service acts as an intermediary between people in financial difficulties and their creditors. These could include the Electricity Supply Board, local authorities, landlords, finance institutions, credit unions and moneylenders. All parties accept the concept of income retention. Its level will be determined, where necessary by an independent third-party Conciliator on a case by case basis in consultation with the money adviser and the creditor – subject to a general guideline that this should amount to more than a basis for mere survival and will be attractive and sustainable enough to encourage debtors to participate in the Pilot. Under the fresh start pilot plan, interest may be reduced or frozen and the residual debt may be written off at the end of the repayment period. The time schedule for repayment of the debts will be up to five years. The scheme is flexible in allowing for any changes in the financial circumstances and medical conditions will also be taken into account in setting repayments. The entire Debt Settlement Agreement is attached. Liam Edwards Money Advice and Budgeting Service Ireland ID: 37320 Autor(en): iff Erscheinungsdatum: 25.04.06

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Erzeugt: 25.04.06. Letzte Änderung: 25.04.06.
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