Paul Carroll on Newstalk with Sean Moncrieff

Sean Moncrieff

Debt Restructuring expert Paul Carroll was talking to Sean Moncrieff about the new Personal Insolvency Bill – in addition to some clear explanation of what is involved Paul was able to give an insight into how it may unfold, who it is designed to help and when it is likely to kick in.

If you missed it then it is well worth catching up with – and when you have you may well want to download our updated easy-to-understand guide to the bill.

Paul Carroll- Moncrieff

Paul Carroll on RTE

Paul was recently invited by Derek Mooney to give some advice and experience to his listeners.  The reaction was immediate and very positive – Paul clearly struck a chord with many people.     Read about it HERE, or just listen to what was said.

Paul Carroll- Mooney Goes Wild

Insolvency Guide Published

The Personal Insolvency Act is now Law but with so much speculation in advance, are people confused as to what was actually the final Act?

 An Easy-to-Read Comprehensive Guide to Insolvency in Ireland is now available


A guide to Insolvency in Ireland was launched today, Monday, 14th January.  Written by Debt Restructuring Expert Paul Carroll, the guide describes the various new options available, through the new Personal Insolvency Bill, to someone who is experiencing financial difficulties. It is intended to assist people who are considering availing of such insolvency arrangements and whether such arrangements are suitable for them.

The 30 page comprehensive easy-to-ready guide takes people through how to assess whether they are insolvent or not. In fact, for some people debt re-structuring is more appropriate. The Guide also outlines how to distinguish between a solvency problem and a liquidity problem.  It explains about who will help with the process of seeking protection under the Personal Insolvency Bill and the three additional types of arrangements, set out in the Personal Insolvency Legislation, which are available to solve personal insolvency issues in addition to bankruptcy.  These are a Debt Relief Certificate, A Debt Settlement Arrangement and a Personal Insolvency Arrangement.

Neo Financial Solutions is a team of associates led by Paul Carroll, a certified accountant with 25 years experience in Ireland, the UK and the US.  Neo Financial Solutions has unparalleled direct experience in dealing with evaluating financial situations, proposing manageable solutions, negotiating with banks and creditors, planning and effecting bankruptcy/insolvency solutions in the least damaging way, if absolutely necessary.

Speaking about the Guide, author Paul Carroll, says, “The Personal Insolvency Act is now law, and there was a lot of speculation in advance as to what it would contain. We have many clients who are confused as to what the final outcome was in terms of provisions within the Act. This Guide is aimed at helping people determine their own position in terms of insolvency and is the first step in helping them to decide what they need to do.  Financial worries cause untold stress and now that the Act is law, people can actually have clarity.


If the announcement today from AIB is taken at face value it is a very positive step for SMEs all over the country. The shift of a lending decision back from the so called business centres to branches is a good move. After all it is the branches who see the owners of the SMEs on a daily basis, deal with their issues and know the business in as much as possible from a banking perspective.

Getting back to the core idea of banking in knowing your customer, assessing their needs and ability to repay on a face to face basis rather then some junk pumped out of a spreadsheet by a faceless person is surely a back to basics idea which is very welcome.

I have a few concerns though and the first being that this is a simple PR exercise and will simple produce faster NO answers! There needs to be a commitment of funds and confidence in the branch level personal to ensure they can lend when they want too.

My second concern is do the branch staff actually know how to do real banking any more?Before the crises they were involved in simply selling and with no regard for assessing a customers ability to pay. Now things have come full circle and we need the skills of the old style bankers who know their customs and could make good sound lending decisions. Are these people still in the banks and if so will they really be given the money to lend. Time will tell and very quickly if what the AIB statement says is true.

I will be taking myself down to my local AIB with my excellent business plan looking for €25k and the answer the day after! I cannot wait and of course I will keep you posted!

Paul C Carroll FCCA

NEO Financial Solutions


Bank Lending and Supermarket “200 Fresh Price Cuts”… Both a Joke

This morning I was greeted with the lack of bank lending and the 200 Fresh Price cuts in Superquinn on the front page of the Irish Times.

What I hear you say has price cuts in Superquinn and bank lending got in common apart from being on the front page of the Irish Times? Well let me explain.

So the bank lending that our TV and Radio advertisements says is happening all of the time is in fact not happening at all. In fact our lending levels are that of Greece, the country who our esteemed leaders keep telling us we are not like. Well, being at the coal face of the debt and lending crisis I can confirm what we all know it is no surprise to find out that lending is nonexistent.

What the Central Bank report on lending does is confirm to our elite leaders what every ordinary person already knows the “banks are closed for lending”. What they say in their fancy ads is not true and what our leaders have been trying to spin to the ordinary people is also that …. spin!

Even more worrying is that almost 30% of those who do apply for a loan do not get it. This is so worrying because they would not have even applied if they were not “sure” of getting approved. Added to this we are not told how much of the approved lending is restructuring of existing lending which is not new lending at all. Based on my coal face knowledge I would say the restructuring lending is in excess of 90%.

This Central Bank report confirms something much wider than simple lending figures or lack thereof. What it is confirming is that the €63b put into the banks to fix the banking system and get banks lending again had been wasted! Also the 1% loans which the ECB gave to banks in November 2011 and again in February 2012 are not being used to lend to the local economy but being used to buy high yielding government bonds increasing the banks profits but destroying the economy. Our Professional and Political elites scam the ordinary guy once again.

Now getting on to Superquinn. So a big “200 Fresh Price Cuts” campaign is on. I enter my local Superquinn this morning to be greeted by a young girl telling me of the great promotion.  Then right inside the door a variety of fresh bread is there with the “200 Fresh Price Cuts” stickers all over them. I go to get the one I usually get and guess what ……. the price has gone from €1.50 to €1.99!!! Do they think (like the bankers thing) that we are stupid?? Maybe now they will understand why Superquinn is lagging behind in their market. This is just another outrage which the ordinary person has to put up with. I just hope someday soon people will cry Enough is Enough!

So fancy ads on Radio, TV and newspapers and just that … Fanciful.

Cash boost ‘to create 13,000 jobs’ “Pathway to Recovery” or “Stimulus for the Elite Political and Professional Classes”?

Any plan to spend 2.25billion euro is welcome and especially in an economy such as ours. Though the amount does have to be taken into context, it represents less than 5% of the total amount put into our banks which have all failed and most of the funds have long since gone from these shores.

I have some concerns regarding the type of stimulus, the sectors it is being spent in and the real potential of such spending over a 6-7 year period.

So we have very limited resources available to us and even the actual source of the 2.25b is scratchy to say the least. The minister insisting that he is going to be able to raise at least 50% of the fund in Public Private Partnerships (PPPs) is in my view very ambitious. What makes the minister think that investors who have fled the country in the past 5 years will invest in an economy that is still contracting? Or is he planning to give the projects away as was done in the past (M50 and Eastlink Bridges)?

The stimulus fund is to be spent in three major areas Health, Education and Roads. All of which have had massive investment in the past and in the case of health and education continue to have massive funding on an ongoing basis. Health spending contributes to our doctors and consultants being paid some of the top salaries in the world. While teachers in our education system are amongst the best paid teachers in the EU (and possibly in the world though I do not have the figures at hand). Do these areas really need any more spending and will the additional spending just result in more overpaid professionals? I have no doubt but it will. Is this another case of the elite political and professional classes of the country looking after them selves’ again?

As for the proposed road infrastructural spending in addition to other projects that have been approved previously will the projects be so beneficial to the country to spend the very limited resources on? Again I very much doubt it. And again we in Ireland manage to build 1k of road for the same price of 3k in Germany so will we really be getting value?

So the stimulus is all about jobs. Construction jobs which will be gone in a few year’s time and then jobs for overpaid professionals in the colleges, schools and medical centres. Sounds like a really great “pathway to recovery”!

Would our leaders not be better off in looking to different places for stimulus such as encouraging small businesses to grow with additional funding made available through a new development bank (as promised in the program for government), real concessions for employing additional people. Encouraging investment with the reintroduction of capital allowances for SMEs. This is where real sustainable jobs will be created without future drain on the state through high wages and massive pension schemes.

It looks like we are in for the same old thinking again. The pathway to recovery is going to be a very long one with this kind of thinking!

ECB Interest Rate Cut/ Dermot Morgan/ Michael Noonan Turkeys and Christmas

ECB Interest Rate Cut/ Dermot Morgan/ Michael Noonan Turkeys and Christmas
In a week that saw major excitement about the EU making a “seismic shift” in its treatment of bank debt and a cut in the ECB main lending rates it just does not seem that much has really changed. By the end of the week our Mr. Noonan had to admit the EU “seismic shift” may have been more like a minor shift and although the interest rate cut will be a great help to the Irish people and economy he cannot force OUR AIB to pass on the interest rate cut! And of course OUR AIB decided not to pass on the rate cut to its customers.
It seams in Ireland the more things change the more they stay the same. I was lessening to a radio programme this morning about satirists and they played a clip from 1989 Dermot Morgan’s (who I had the pleasure of meeting at the height of his career) and RTE’s scrap Saturday and who was he taking off only the very current Mr. Noonan! Though he was not a minister at the time he was still in the tick of Irish political life. And now 24 years later when the country is in need of the most radical turnaround of any modern country we have at the head of our finances and indeed the most of government (Kenny, Quinn, Burton etc) people who have been around far too long. They have proven they are not capable of thinking outside the box (and FF are no exception here) to get the country moving again. Instead what they continue to do is prop up institutions like AIB, NAMA, ESB, etc …. which are holding back the country but keeping the old guard of which they are a major part, in the power and style they have been used too even through this depression we are going through now. Until we see some fresh people with new radical ideas we in Ireland who are not part of the golden political/professional circle are set for a very long and difficult road ahead.
It is a shame because our economy being small and flexible can be fixed very quickly but a major part of that fix involves a purge at the top of political and professional classes and we all know turkeys do not vote for Christmas!

Paul C Carroll FCCA

Case Study 2 – PAYE Employee/Landlord


Here our clients are a married couple both in PAYE employment and over a number of years accumulated 5 residential investment properties (RIPs’). The properties were acquired over a 10 year period and the last of which was acquired in 2006. The properties were in good locations and rented well even through the recession.

The Lending

All of the RIPs’ were acquired with mortgages ranging from 75% to 95% loan financing. Loan repayments included both interest and capital. The initial interest rates were very low “teaser rates” increasing after a 3-5 year period. At the time of the clients requesting our assistance some of the loans were going into arrears.

The Problem

Two problems arose initially. Firstly, as the recession took hold though the properties continued to be rented the rents began to fall and eventually fell by 35% from a high in 2007 to a low in 2011. The second problem was that the “teaser” interest rates began to run out and some of the loan interest was doubling. Sustaining mortgage payments became impossible. The clients began to use up savings and supplement the repayment shortfall from their salaries. This situation was not sustainable in the long term.


The NEO Plan

When we were engaged we reviewed all information and all loan documentation to ensure they were in order. After the review we contacted the banks in question, confirmed our appointment and immediately agreed reduced loan repayments until the completion of our review and presentation of a proposal to address the issues.

The Solution

We presented a detailed proposal which included property valuations, confirmation of income and a revised repayment schedule which included reduction in interest rates, warehousing of part of the debt and a partial disposal plan as and when the market conditions improved.


As with most of the debt restructuring cases they do not get resolved quickly. However, during the restructuring process the stress was taken completely from the clients and repayments were reduced (by agreement with the banks) to ensure they were sustainable while negotiations were ongoing. The whole process took seven months to complete and agree.

Case Study 1 – Family Business


A family owned business employing over 40 people in the hospitality industry with a trading history over 60 years in Dublin. The business had been trading very successfully but like all other businesses in Ireland felt the deep effects of the recession over the past 4 years seeing its turnover drop by almost 50% during that time.

The Lending

During the good times the premises which the business has been run from was valued in excess of 7M. This valuation enabled the owners to draw down loans of 5m in order to complete refurbishment works and make other property purchases. During this time there was never a case for the level of lending on the basis of the business activity as the business profits could not sustain such a level of debt. The lending was done mostly on the basis of the existing property value and the assumption by everyone that the value would do nothing but increase.

The Problem

As the recession hit and business activity began to reduce the business had difficulties in servicing the massive debt. Because property prices were in free fall it was impossible to refinance even though the business was trading successfully. The loans began to go into arrears. The owners began to have discussions with their bankers but these were unsuccessful. They then appointed Neo Financial Solutions to represent them with their bankers.

The Neo Plan

The first thing our team did was to engage with the client and find out ALL of the relevant details and review ALL of the loan paperwork. After that we contacted the banks detailing our appointment and requesting all future contact regarding the clients loans would be done directly through us. This was the first step in reducing the stress for the client. We then advised the banks that we would be conducting a strategic review of the business including all assets and liabilities. This review would be presented to the bank with a proposal on moving forward with a sustainable restructuring proposal. We then set about conducting our review, making recommendations on all aspects of the business to improve efficient use of all cash flow including the recommendation of reducing loan repayments.

The Solution

We then set about developing a solution to the client’s debt burden by looking closely at what the client could sustain in terms of debt levels. We demonstrated to the bankers that the current level of debt was not sustainable and would bring the business down and with it any real possibility of the bank getting a reasonable return of its capital. We successfully agreed a significant write off of the bank debt (in excess of 50%), agreeing new loan terms for the remainder of the debt and keeping the family business alive.


Because restructuring can be complex and is for the most part involves some portion of write off from the lender it does take some time to complete and agree. This particular case study took 9 months from the time Neo was appointed to completion.  However, during this time the client was relieved from dealing with the banks on a daily basis and so was able to concentrate on running the business.

Personal Insolvency Bill 2012

The Personal Insolvency Bill 2012 was published yesterday without the usual fanfare associated with our current government’s announcements about their attempts to fix our broken state. The announcement was somewhat overshadowed with the (another) seismic shift by the EU on another form of debt relief  … Bank Debts …. Let’s all recognise debt forgiveness is alive and well but just not it seems for the ordinary person!

As some commentators have already stated the banks fingerprints are all over this bill which I would agree with. I also see that the finger prints of our privileged professional classes are also all over the bill too. Items which are unnecessary but included such as the necessity for an annual review of a personal insolvency arrangement (PIA) and many court filings smack of professional fee generating schemes and not adding any particular value to the process or to the debtors situation.

I would have several concerns with the bill as it currently is, the first of which is the amount of time a person who makes one of the 3 proposed arrangements available with their creditors is tied up in the arrangement. The time can be anything from 3 years in the case of very small arrangements under the Debt Relief Notice (DRN) to 7 years in a Personal Insolvency Arrangement (PIA). Is it really in the ordinary persons interest to be tied up for such a long time given that they have faced up to their debt issues and just want to get on with their lives?

Another major concern is with the position of strength of the creditors in all of the arrangements where at least 50% and in some cases 65% of all creditors have to agree to the arrangement. This effectively gives the creditor (in most cases the bank) control and we know they just inflect more hardship when they are in charge.

A very worrying aspect of the bill is the ability of a creditor to claw back some debt previously written off! So after the ordinary person puts themselves and their family through one of the arrangements, suffers the stress, worry and loss invariably suffered from the process. Then has some bit of good luck, in say 4 years time after the arrangement is made, most likely after a lot of hard work the bank is the one to gain from the good fortune! What kind of debt resolution is that?

The most positive aspect of the bill is the reduction of the term of bankruptcy, if someone takes the ultimate plunge, from 12 to 3 years. After the 3 year term is up there is an automatic discharge. The 3 year term is longer than the 1 year term in Northern Ireland and the UK but it is progress. Given the terms and length of the 3 proposed arrangements in the bill anyone with significant debts maybe better off  just go ahead with declaring bankruptcy and the 7 year ‘sentence’, annual reviews and possible claw back imposed by the so called arrangements could be avoided.

Paul C Carroll FCCA, Neo Financial Solutions, 01 4370908