Robert Dowds (Dublin Mid West, Labour)

I warmly welcome the Personal Insolvency Bill and wish to thank the Minister for Justice and Equality and all who have had an input into drafting this extraordinarily difficult piece of legislation. New Beginnings, a lawyers' group, has stated: "This Bill has the potential to keep thousands in their homes as these new measures could help defuse an economic and social time-bomb, and this is a significant step on the road to recovery". Two other ways of pointing to the need for this Bill are, first, the EU-IMF agreement recognised the need for legislation of this sort and, second, given that personal debt levels in the Irish Republic are the highest in Europe, it is hardly surprising that legislation of this sort is required.

The Bill is an essential element towards getting this country and its people standing on their own feet again. Assuming the Bill operates as intended, it will enable people in great debt to participate more effectively in the economy thereby helping to keep more people at work, as those in debt begin to spend again and generate demand for goods and services.

Like other Deputies, I am glad that under the personal insolvency arrangement, it is possible for people in trouble with mortgages to come to a realistic settlement. In reality, many people are trying to cope with mortgages for houses that are only worth a fraction of the purchase price. This is so important in terms of those people being able to live their lives and participate in their local economies without such an enormous burden.

I am particularly glad that part of this Bill deals with the debt problems of people who effectively have no assets. It is most important that they should be assisted along with, for example, those with severe mortgage problems. I wonder how the conditions will work in practice for those who are eligible for a debt-relief notice. According to sections 40 and 41, it is clearly in the interest of a person with a debt-relief notice to stick to his or her bargain, particularly as he or she will be responsible for all debt if the notice is terminated. Can I presume that when a debt-relief notice or personal insolvency arrangement is being drawn up, the intermediary and personal insolvency practitioner will have a clear financial guide to determine what is reasonable expenditure for the individual or family concerned?

I understand from a briefing by FLAC and other groups that the Vincentian Partnership has come up with a good system for doing this. I ask the Minister to examine that system. I am glad to see involvement of MABS in issuing debt-relief notices because that service already has an expertise in helping people in this situation. I hope that MABS will be adequately resourced to deal with debt-relief notices and to provide advice on all of the new insolvency options. Given the track record of MABS, it is a particularly useful service concerning the issues surrounding this Bill.

I presume the Minister is aware of the concerns about the Bill being raised by the Irish League of Credit Unions. The Minister for Justice and Equality, the Minister for Finance and other relevant Ministers should monitor any impact this Bill has on the credit unions' ability to function. Given the importance of credit unions, particularly for small borrowers, it would be a severe setback if any of them were unable to lend due to lack of finance. In these circumstances, I presume the Minister for Finance would help the relevant credit unions over the hump.

There is some concern that the debt ceiling of €20,000 may not be a high enough figure. Perhaps the Minister can comment on that matter in his reply to the debate. Another provision in the Bill which I welcome is the reduction in the period of bankruptcy from 12 years to three years.

A concern that I have in terms of how this proposed legislation will be received is the question of begrudgery. When speaking about this Bill, it is important that public representatives make it clear that people who are insolvent are in a very bad place and that it is in society's interest to give them a helping hand. I am concerned that there is no possibility of appeal if creditors reject a personal insolvency arrangement proposal. The debtor must go through a lengthy process at the end of which he or she may be left with nothing to show for the effort. It is also worrying that there is no provision for people who cannot afford to hire a personal insolvency practitioner but who need to get out from under a secured debt, such as a mortgage.

Given that this legislation is ground-breaking, I would urge that its operation should be reviewed after a year or so to see how it is working in practice. Flaws that are uncovered during the first year should be dealt with at that stage.

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