Blog-David McCarthy, Galway Talks, 17th January, 2013

Issue: Personal Insolvency Bill

There is no doubt that one of the major issues for 2013 will be the introduction of the new Personal Insolvency Bill.  A considerable number of borrowers are waiting for the introduction of this legislation to help with the crisis that they are facing.

Until cases are processed through this new system, it is uncertain as to how it will operate in practice.  There are a number of issues however that are likely to arise as follows:

  • The process is voluntary and it remains to be seen whether or not banks will engage with borrowers.  The Minister for Finance has pointed out however, that if they do not see institutions engaging with borrowers, then he is likely to change the legislation to force them to do so.
  • Obviously, those entering the process are experiencing severe financial difficulty.  As a result it is important to note that their credit rating will be adversely affected for many years to come.  For most people this is already the case and will not be a concern to them.
  • The new insolvency service that has been established to monitor the process, have already stated that data relating to clients who have availed of the PIB will be placed in the public domain.

We will keep you updated on developments as the year progresses on this issue.

Question:  I have a number of investments and I am just wondering what your opinion is of how 2013 will be?

Answer:  I believe that the outlook for 2013 is quite positive.  Last year was a good year for investment returns unlike the previous 2 years.  Whether or not your investments are appropriate for your current situation is another matter.  I would recommend that you have your investment portfolio reviewed as early as possible.

Question:  I am looking to retire sometime this year.  Have you any suggestions as regards what I need to do to prepare for this major change in my life?

Answer:  It is important to plan for retirement in relation to your financial structure.  Issues relating to borrowings / investments / bank accounts etc. all need to be addressed as part of this review.  Remember that retirement is not just a change of lifestyle but also a major event in your financial life.