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The merits of s115A cases generally

The applicant’s PIP must certify that there are reasonable grounds for applying to the court to have the PIP confirmed. This is a requirement of the Abhaile scheme and of Regulation 13(10), which disapplies the financial eligibility test for applications under the Abhaile scheme.

It is important to note that Regulation 13(10) only disapplies the means criteria. The merits criteria still apply, and although we will take due regard of the PIP’s certificate that there are reasonable grounds to have the PIP confirmed, the decision maker must make their own judgement as to whether the requirements of sections 24 and 28(2) (other than section 28(2)(a)) are met by the application.

The criteria the court must consider when deciding on an application are found in section 115A(8) and (9). The criteria in section 115A(8) and (9) must be satisfied for an order to be granted.

Section 115A(3) provides that within 14 days of being served with the proceedings a creditor may lodge a notice with the court setting out their objections to the proposed PIA. The grounds upon which objections to a PIA can be raised are found in section 120:

“a) that the debtor has by his or her conduct within the 2 years prior to the issue of the protective certificate under section 95 arranged his or her financial affairs primarily with a view to being or becoming eligible to apply for a Debt Settlement Arrangement or a Personal Insolvency Arrangement;

(b) the procedural requirements specified in this Act were not complied with;

(c) a material inaccuracy or omission exists in the debtor’s statement of affairs (based on the Prescribed Financial Statement) which causes a material detriment to the creditor;

(d) the debtor, when the Personal Insolvency Arrangement was proposed, did not satisfy the eligibility criteria specified in section 91;

(e) the Personal Insolvency Arrangement unfairly prejudices the interests of a creditor;

(f) the debtor has committed an offence under this Act, which causes a material detriment to the creditor;

(g) the debtor had entered into a transaction with a person at an undervalue within the preceding 3 years that has materially contributed to the debtor’s inability to pay his or her debts (other than any debts due to the person with whom the debtor entered the transaction at an undervalue);

(h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).

Section 115A(8)(b) effectively allows these objections to be raised in relation to an s115A application in the same way they might have been had the PIA been approved by the creditors. A decision maker may wish to consider these grounds if they are raised by a creditor in a notice of objection.

If you receive an application for legal aid, ask if proceedings have already been instituted. If they have, ask for a copy of both the initiating documents (the originating notice of motion and the statement of grounds) and any Notice(s) of Objection served by the objecting creditors at this point.

There are two main issues upon which court reviews of rejected PIAs have turned:

The concept of “unfair prejudice”
The ability of the debtor to continue to reside in their home long term