Joe Carey (Clare, Fine Gael)

I welcome this opportunity to make a contribution to the debate on the Personal Insolvency Bill 2012. This is very important legislation which has been eagerly awaited. The drafting of the Bill has taken some time, but that is understandable given its complexity. I compliment the Minister on presenting the heads of the Bill in draft format to the Joint Committee on Justice, Defence and Equality for debate. This process gave an opportunity to the members of the committee and interested parties to give their views on the legislation at an early stage.

Personal debt has become a major issue for many people in our country. This legislation provides a framework under which it can now be dealt with. The Bill establishes an insolvency service and provides for the licensing and approval of intermediaries and personal insolvency practitioners. These intermediaries will play a key role in advising debtors, negotiating debt settlements and administering the terms of such settlements.

I welcome the three types of voluntary debt settlement arrangements established in the Bill. These are debt relief notices which deal with unsecured debt of less than €20,000, debt settlement arrangements for unsecured debt greater than €20,000 and personal insolvency arrangements, which will be for secured debt of up to €3 million and other unsecured debt. I would like the Minister to clarify the qualifications he envisages are necessary for personal insolvency practitioners. Will there be a conduct of fitness and competency test for personal insolvency practitioners? Will there be a licensing procedure for personal insolvency practitioners?

Over recent years, and indeed this week alone in my clinics, I have heard a number of real life stories of families who are struggling with their debt problems. In many cases their lives lie in ruins and their marriages have often broken down under the stress and strain associated with the financial pressures they face. During the so-called Celtic tiger era, people could not buy property quickly enough and the banking system fed and promoted that desire. People bought houses off plans without even seeing the properties. There was little or no oversight or financial regulation, and this created a perfect storm of unsustainable debt. I very much welcome this Bill for that reason. It provides a mechanism whereby people who have fallen into the black hole of unsustainable debt- personal or mortgage debt or both - are finally being armed with a means to navigate their way out of the deep problems they face.

I want to recognise the role played to date by the money advice and budgeting service, MABS, in assisting families and people through their personal and mortgage debt issues. It is a wonderful organisation which has gained the respect of ordinary people and lending institutions alike. Its role to date cannot be understated. Will it receive extra funding, given the extra caseloads it will receive as a result of the introduction of this legislation?

Part 4 deals with the reform of the bankruptcy process contained in the Bankruptcy Act 1988, as amended. In particular, I welcome the reduction of the length of bankruptcy from 12 years to three. This change brings our State into line with other jurisdictions, is a welcome measure and, critically, will only come into play after a process of meaningful engagement and negotiation has failed. This is a very important aspect of the Bill.

This Bill is a step in the right direction and offers a ray of light where previously there was none. There is no silver bullet to debt resolution, but this Bill is welcome and I congratulate the Minister on his work.

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