Government scheme to provide legal aid for insolvency court reviews

Justice Minister Frances Fitzgerald has announced a new Government scheme under which insolvent borrowers seeking a court review under the Personal Insolvency Act 2015 will be able to apply for legal aid.

The forthcoming scheme is also designed to help people who are insolvent, and in mortgage arrears on their home, to access independent expert financial and legal advice.

A number of agencies will be involved in its delivery, including the Money Advice and Budgeting Service (MABS), the Legal Aid Board, the Insolvency Service and the Citizens’ Information Board.

The scheme will be coordinated by the Department of Justice and the Department of Social Protection.

Announcing the scheme, Ms Fitzgerald said: “Many organisations working to help people in debt have underlined the stress and isolation experienced by people who are struggling to get out of debt, and who are at risk of losing their homes due to mortgage arrears.

“Expert independent advice can break these problems down to manageable solutions, and help people return to solvency, often keeping them in their homes.

“I am very pleased to announce this Scheme, which I believe will offer very important support and hope to people in genuine financial distress and anxiety, who can’t afford the help they need.

“I would strongly encourage anyone worried about mortgage arrears on their home to contact MABS, who are the gateway to this scheme, and who can arrange for advice and representation from a Personal Insolvency Practitioner, a specialised MABS adviser, or a solicitor, as needed.”

She added: “The Scheme builds on, and complements, the important range of measures already put in place under the Government’s Framework to Strengthen Support for Mortgage Arrears.

“Another key element in this Scheme is its provision for legal aid to insolvent borrowers seeking the new Court review under the Personal Insolvency Act 2015, where creditors such as a mortgage lender refuse a Personal Insolvency proposal which includes the borrower’s home.”

Noeline Blackwell, outgoing director general of Free Legal Advice Centres (FLAC), said the scheme could fill “a scandalous gap”.

Ms Blackwell said: “Until now, there has been a dreadful failure of access to justice for poor people at risk of losing their homes. This is one of the most significant legal events in any person’s life and they should not be left to handle this on their own against powerful, well-resourced lenders.

“Some people have been able to get support from advocacy groups but what is needed is a systematic, state organised system that is available to people all around the country.

“If the details fulfil the promise of the announcement, this scheme, administered through the state-funded MABS and using the expertise of the Legal Aid Board, may fill what has been a scandalous gap.”