Ciara Conway (Waterford, Labour)

I congratulate the Minister for publishing the Bill which deals with a very complex issue. It is great to have an opportunity to discuss it in the House before the term finishes.

The last Administration left behind an appalling legacy, with crippling debts being saddled on the shoulders of citizens. After 15 years of mismanagement, we finally have radical and workable legislation to deal with the debt crisis The Bill reforms legislation which has been in place for over a century and seeks to ensure that in coming years there will be better structures in place for all families, not only those in difficulty. Struggling homeowners will be able to enter into arrangements, on meeting certain criteria, with their lenders to have some of the debt restructured. There will also be options to allow families and individuals to remain in their own homes. That is the crux of the issue for me.

The major concern of the people we meet in our clinics and who contact our offices is that pressure was put on young people to take out huge mortgages. The couch, the decking and the car were thrown in and now young families have been saddled with debt to be paid off in the next 30 years. This can only be described as poor practice by the banks. When I first went to obtain a mortgage, I was told I would rent a room in my house. There is not a huge or thriving rental market in Abbeyside, Dungarvan, County Waterford, as we do not yet have a university. There were inappropriate practices which put pressures on ordinary everyday people. Banks faced with the prospect of non-payments know they must engage with borrowers. In my experience, the banks are doing what they are supposed to be doing on paper. They enter into a MARP, mortgage arrears resolution process, agreement with borrowers but lump more arrears on top of it which puts the payment completely out of the reach of the borrower.

The provisions relating to a debt settlement arrangement or a personal insolvency arrangement are specifically designed, as far as is practicable, to facilitate a debtor's continued ownership and occupation of his or her principal private residence unless the debtor does not wish to do so. We do have a duty to ensure the language used in the legislation is distilled down so that people will know what it means to them. Part of our role in this debate is to use accessible language. While I accept there needs to be legalese and words are chosen carefully when drafting legislation, people need to be able to filter out the provisions that affect them.

The Bill introduces three new non-judicial debt resolution processes. The debt relief notice will allow for the write-off of qualifying unsecured debt up to €20,000, subject to a three-year supervision period. The Bill provides for a debt settlement arrangement for the agreed settlement of unsecured debt over five years. The personal insolvency arrangement will enable the agreed settlement of secured debt up to €3 million, although this cap can be increased with the consent of all secured creditors, and unsecured debt over six years.

The Bill outlines several avenues that can be pursued by people in debt. The inclusion of both secured and unsecured debt, through personal insolvency arrangements, is seen as placing Ireland to the forefront of states seeking to address the devastating impact of unsustainable debt by providing for settlement arrangements of both types of debt at the same time. It must be remembered that unsecured debt of credit cards and cheap credit is a significant burden to many families across the country and causes much stress.

Labour has consistently and clearly promised that it would introduce legislation to assist those struggling to pay their mortgage, deal with their credit card debt or other personal debt. This legislation is delivering on this promise as outlined in the programme for Government. It is not, however, a blanket debt forgiveness scheme. It has been put in place for those making an honest effort to pay their debts but can no longer afford their repayments. A key principle of the Bill is that it is not about the size of the debt but rather the affordability to service it.

There is no one-size-fits-all solution and each case will be dealt with on an individual basis. The legislation addresses the obligations of debtors and the rights of creditors in a proportionate and balanced way while taking into account the financial reality of individual circumstances. I look forward to working with the Minister and my other colleagues in government to ensure the speedy passage of this Bill so its provisions can assist the many families across the country affected by debt.

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