The Personal Insolvency (Amendment) Act 2021, commenced with effect from 25 June 2021, makes a number of urgent changes to the Personal Insolvency Act 2012 to help people who are struggling to pay their debts.

Under the new law, insolvent homeowners will have the right to seek review by a court if their mortgage lender or other creditors refuse a reasonable proposal for a personal insolvency arrangement.

This was already an option under the Personal Insolvency (Amendment) Act 2015 for home mortgage arrears dating from before 1 January 2015. The new law has removed that cut-off date.

Justice Minister Heather Humphreys said the changes were necessary “in light of these changed economic circumstances” arising from the Covid-19 pandemic.

James Browne, minister of state for law reform, said: “Living with unsustainable debt is a very stressful situation for individuals and families, and that is why this Act is so important. It can happen to anybody, and it can arise for reasons beyond the person’s individual control.”

Another provision which has been commenced today adjusts the asset ceiling for an insolvent person applying for a debt relief notice, the statutory debt restructure designed for people with debts not exceeding €35,000, and very little income or assets.

The ceiling for assets (including savings) has been raised from €400 to €1,500. This will remove an obstacle that could otherwise affect recipients of some social welfare payments that are paid as lump sums, such as fuel allowance or carer’s support grant.

Mrs Humphreys said: “I’m glad to say that the provisions of the Act being commenced will also help people on very low incomes, who don’t own a property or have any significant assets, and are currently burdened with debts they have no prospect of being able to pay.”

The minister said she hopes to be in a position to commence the remaining provisions of the Act, which provide for a confirmation of truth as an alternative to a statutory declaration, as soon as possible.