Fine Gael Meath West TD, Damien English, has said that the Personal Insolvency Bill published today (Wednesday) is a key step in solving our mortgage debt crisis. The Heads of the Bill have been published by the Minister for Justice, Alan Shatter, and the Minister for Finance, Michael Noonan.
“This draft Bill puts forward a range of options that will provide much needed relief for those struggling with personal debt. This is an extremely complex area and one of national importance; the challenge of getting to grips with the mortgage problem is one of the biggest issues facing this Government. What we have today is a series of solutions, which will form a key part of the Government’s strategy for dealing with mortgage arrears.
“The write-down of small debts, up to the value of €20,000, will be made possible through the issuance of Debt Relief Certificates. This will essentially function as a six year deal with the lender, where the person in debt can be discharged from loans they are unable to pay. For those with larger personal debts, a Debt Settlement Arrangement may be agreed, which also allows for the write-down of personal loans.
“These two schemes will directly help the thousands of people in this country who have found themselves drowning in debt in recent years – with credit card bills, car loans, overdrafts – and are currently unable to chart a way out of their situation. By helping these people, we may be able to avoid further mortgage defaults and the unsustainable escalation of personal debt.
“For those struggling under the burden of spiralling mortgage debt, the new Personal Insolvency Arrangements contained within the Bill will provide a lifeline. Through agreement with creditors, the PIA will help mortgage holders to restructure their debts and ultimately reduce their repayments.
“The final, crucial, element of this legislation is the reformed bankruptcy arrangements, which reduce the period of time that a person will be considered bankrupt from 12 to 3 years. The existing regime is punitive and out of date. Bankruptcy should always be considered a course of last resort. However, for those who find themselves with no other option, this proposed new legislation will make the process quicker and easier.
“This Bill is an excellent start; it will now go before the Joint Oireachtas Committee on Justice for its consideration and it’s hoped it can be published in full by the end of April. Between now and then, the Government wants to hear the views of the Opposition and the public. This Government is determined to chart a way out of this crisis by helping people who are feeling overwhelmed by debt to get back on their feet.”