Comparison Personal Insolvency Arrangement (PIA) with Bankruptcy

Background

The PIP in consultation with the Debtor sets out the assumptions used to calculate the financial outcome were he / she to be adjudicated bankrupt.

Assumptions used by PIP

a)Debtor has confirmed they will/will not leave the PPR (Strikethrough event which does not apply) in the event of a failed PIA. However, where the Debtor wishes to remain in the PPR, the OA and Mortgagee consent is required.

b)A downward adjustment of 10% is made to the market value of property assets to take into account the effect of certain matters, including estate agents fees, legal fees, and other costs.

c)An evaluation of the rent in the local area by house size (city, large town) and by region (Leinster, Connaught, Munster, Ulster) using DAFT.ie is undertaken to see average costs for the area. The result is based on the Debtorliving in ______and a monthly rental amount of €x is considered appropriate for monthly accommodation costs.

d)The Bankruptcy Payment Order (BPO)[1] is calculated for 36 months in Bankruptcy.

e)The Debtor’s Insolvency Service bankruptcy fees are calculatedin accordance with SI 465 of 2013

Administration Fee / €
Realisation Fee* / €
Distribution Fee / €
Debtor’s ISI Bankruptcy Fees / €

*only include assets realised by the OA or any surplus where value of assets realised by the Secured Creditorexceeds security.

Calculations

The PIP calculates the Debtor’s monthly income and expenses after adjudication based on the assumptions above. Any differences between Reasonable Living Expenses (RLEs) and expenditure (Table A) are understood with details available where clarification is required. It is assumed that the Debtorreaches an income payment agreement with the Official Assignee and there is €x per month available to the Bankruptcy estate as set out in Table A.

Table B then sets out the comparison between dividends to the Debtor’s secured, preferential and unsecured creditors in both the PIA and Bankruptcy.

Table A

DebtorBankruptcy Monthly Contribution Calculation(BPO)
Monthly Net Income / €
Total Set Costs / (€ )
Childcare Costs / (€ )
Special circumstances items / (€ )
Rent / Mortgage / (€ ) / (c)
Reasonable living expenses / (€ )
Monthly Contribution / €

Table B

Comparison of PIA/Bankruptcy / PIA / Bankruptcy / Assumptions
Financial Outcome for Secured creditors
PPR / € / € / (a)(b)
Other Secured assets (list all)
Proceeds for Secured Creditors / € / €
Total Secured Creditors / € / €
Dividend (Secured Creditors) / % / %
Financial Outcome for Preferential and Unsecured creditors
Monthly Contributions
Bankruptcy BPO(36 months at €) / € / (d)
PIA (xmonths at €) / €
Proceeds from Arrangement Assets / €
Proceeds from Inheritance / € / €
Estimated Total Assets Available / € / €
Fees:
ISI Bankruptcy Fees / € / (e)
PIP Fees (including VAT) / €
Deficit/Total Costs / € / €
Assets available for Preferential / Unsecured creditors / € / €
Preferential Creditors / € / €
Unsecured Creditors / € / €
Shortfall from disposal of security / € / €
Total Unsecured Creditors / € / €
Dividend (Preferential Creditors)
Dividend (Unsecured Creditors) / %
% / %
%

Appendix

1. Administration Fee:

The administration fee charged to the bankrupt estate will depend on the value of the gross assets declared on the bankrupts Statement of Affairs:

Gross Value of Assets / Administration Fee / Debtor’s Administration Fee
< €10m / €2,000 / €
€10m to €50m / €4,000 / -
€50m to €100m / €6,000 / -
€100m to €150m / €8,000 / -
€150m + / €10,000 / -

NB: The administration fee is only charged once and does not apply to each and every dividend payment. The administration fee can only be charged on bankrupt estates which were adjudicated after 3rd December 2013 i.e. when the relevant statutory instrument was signed.

2. Asset Realisation Fee

Value of Realisation / % Realisation / Basis for Calculation / Debtor’s Realisation Fee
Administration Fee Charged / 0% / € / X 0% / €
Next €1500 / 100% / € / X 100% / €
Next €6,500 / 50% / € / X 50% / €
Balance up to €1,000,000 / 15% / € / X 15% / €
€1,000,000 + / 1% / € / X 1% / €
€ / €

3. Distribution Fee

The distribution fee charged will depend on the number of creditors (to include any preferential creditors) who are receiving cheque payments.

Number of Creditors / Fee / Debtor’s Distribution Fee
<10 / €500 / €
<20 / €1,000 / -
20+ / €2,000 / -

July 2016

[1]Issued by the Court under Section 85D of the Bankruptcy Act 1988 (as amended).