Ireland’s new Insolvency Service hopes to begin accepting applications from borrowers seeking debt relief in the second quarter of this year, its head Lorcan O’Connor said yesterday.

While there is a “large backlog” of potential cases “it may be a number of months down the road” before the bulk emerges, he told a Grant Thornton-organised seminar on the new personal insolvency legislation

Mr O’Connor said there would be a public register which would show who applied to the new service.

“There are consequences to availing of one of these schemes, including information being made available to the public and creditors,” he added. While people’s names would be on the public register, their financial situation would not be publicly revealed, he said.

He encouraged members of the public experiencing debt or arrears problems to engage with creditors immediately.

The call came as “psychology of debt” research unveiled yesterday by Grant Thornton showed half of all debtors experience mental health problems, including depression and anxiety.

Anxiety

Grant Thornton partner Gareth Neill told the seminar that debt-related mental health issues had become more widespread in recent years, contributing to loss of appetite, high blood pressure, a weakened immune system, sleep deprivation, irritable bowel syndrome and drug/alcohol abuse among adult debtors.

“Fifty per cent of adults with debts also encounter mental health problems such as depression and anxiety,” he said.

“The job as a debt adviser is as important as a doctor’s. In the UK the NHS are giving free money advice services in doctors’ surgeries because debt-related health problems are so widespread.”

The seminar heard the debt situation in Ireland was worsening: “For every €10,000 of disposable income earned by an Irish household, €17,600 in debt is outstanding.”

This debt is typically comprised of credit union debt, overdrafts, personal loans, utility bill arrears and credit card debt.

Separately, research by the Irish League of Credit Unions published today shows 1.59 million adults in Ireland now have just €50 or less at the end of the month once all essential bills have been paid.

Bills

A survey by the credit unions found 46 per cent of consumers struggle to pay their utility bills on time, with many sacrificing spending on food to pay their gas and electricity bills.

Irish people continue to be squeezed and many are simply continuing to struggle to survive on a daily basis, Irish League of Credit Unions chief executive Kieron Brennan said.