These Protocols set out the standards which creditors and practitioners can expect from each other. A Protocol compliant arrangement uses agreed documentation, standard terms and conditions and adheres to high level principles set out within it. It makes standard provision for what will happen should a debtor need to take a payment break for a period during the course of an arrangement, or if they need to reduce payments to a degree. It provides too for other things that could happen while a debtor is in an arrangement such as what would happen if they win money, die or receive substantial gifts or assets.
Without agreement on what the fundamental components of an arrangement should be, it is left to each practitioner to formulate unique proposals to be put to creditors. In turn, those creditors have to consider every aspect of each individual proposal. All of this takes time and effort. Under these Protocols, practitioners and creditors have already discussed and agreed the standard terms. Using them allows both parties to concentrate instead on the commercial aspects of the proposed arrangement rather than on the details of the ‘small print’.
They will almost certainly raise the numbers of applications. It should be easier and faster to propose and agree an arrangement from now on. The effect should be discernible in the statistics the ISI produces each quarter. DSAs have increased since the introduction of the DSA Protocol in July 2014.
They make the DSA process and the PIA process more efficient and less time consuming for all the stakeholders involved.
The two Protocols will make it easier for a debtor to reach agreement with his or her creditors through a DSA or PIA. They make the entire process more efficient and transparent. They help debtors make more informed decisions and ultimately they should lead to better outcomes for debtors in that arrangements are more likely to succeed.
A standard arrangement under the Protocol is suitable for employees, the self employed and those who are unemployed.
Within an arrangement, no debtor is required to sell his or her family home or to cease to occupy it, unless the debtor wishes to do so or the PIP finds that the costs of staying in it are disproportionately large. This provision is set out in the Protocol document which has been agreed by creditors.
No. There are obvious benefits to using the standard DSA and PIA but there is no obligation to do so.
Yes. This is envisaged by the Protocols. A practitioner can change any of the standard conditions by including the new condition in Part IV of the proposal and marking the check box in Part I so that everyone can see there is a modification. Where a standard condition is changed, the proposal is then a non-standard proposal but the practitioner should try to use as many of the other standard conditions as possible so as to preserve the benefits the Protocol confers.
The Principles document contains the over-arching aims of both Protocols and sets out the high level agreement reached by the Debt Solutions Protocol Steering Group on the issues.
The ISI have set out examples to show what both a Protocol compliant DSA and a Protocol compliant PIA might look like (see both examples here).
11. Has there been agreement between secured and unsecured creditors in relation to the PIA protocol?
Yes. Both secured and unsecured creditors have agreed to support the PIA protocol. Of course, a creditor may be a secured creditor in one case and an unsecured creditor in another. This could even occur in the same case.
At the time of publication March 2015, the Association of Personal Insolvency Practitioners and the Irish Society of Insolvency Practitioners have approved the Protocols and recommended them to their members. Likewise, the Boards of Irish League of Credit Unions and Credit Union Development Association have recommended to member credit unions that they support both Protocols. The Banking and Payments Federation Ireland has recommended participation in the Protocols to its members. Many individual creditors, including the major banks, have indicated their acceptance of them.
13. Is there information available with regard the timelines and documentation to be used as part of the Protocol?
Yes in section 29 of the Principles document (available on our website here). Parties have agreed to use best endeavours to adhere to these timelines. Post approval documents are available here for DSA and PIA.
Personal Insolvency Practitioners and representatives of Personal Insolvency Practitioners, creditors and creditor representatives and consumer and debtor representatives were involved in drafting both the DSA and PIA Protocols. The ISI itself also participated as chair of the group. The complete list of members is contained under the ‘background’ tab. It took four months for the DSA and seven months for the PIA to be finalised.
The Protocols are on the website and available for use from now on. Practitioners can use them immediately to formulate proposals to be put to creditors. The main creditors are familiar with the Protocols and are expecting proposals in this format. An oversight committee will monitor how the two Protocols are working in practice. That committee will be set up and for the first review in the coming months.
If your question has not been addressed above please email or call the ISI.