Michelle Mulherin (Mayo, Fine Gael)

I join colleagues in welcoming the Bill, which will radically reform insolvency law in this country. Many of our citizens will now be able to breathe a sigh of relief and begin to sleep soundly in their beds as a consequence of the introduction of this legislation. We have all heard of the so-called new poor, people who are working hard but unable to keep their heads above water. Many of them are savaged by debt, afraid to open their doors or read their post. Theirs is an existence of dark isolation. People burdened with unmanageable mortgage and personal debt cannot avail of the safety net of our social welfare system. They have struggled to endure under the weight of their burden, with nowhere to turn for relief or support. I take this opportunity to thank the staff of MABS who have offered a lifeline to people in desperate straits.

A significant aspect of the Bill is the reduction of the discharge period for bankrupts from 12 years to three. By changing the status quo so fundamentally, this legislation sends a message to beleaguered people who are worn down by the persistent and insurmountable nature of their debt that there is hope and that their lives are worth more than their debts. People genuinely want to work their way out of debt and this Bill offers them a way to do so. I particularly welcome the onus it will place on banks finally to take a realistic approach in arriving at debt settlement arrangements and workable solutions with individuals. These are the same banks which offered 100% loans on overinflated properties, encouraged customers to finance car purchases by amalgamating the debt with their mortgages so that the payments were spread over 30 years, and offered increased credit card limits week after week. Unfortunately, many succumbed to the temptation.

I welcome the development of concepts and solutions by the Department of the Environment, Community and Local Government, housing agencies, housing associations and various lending institutions. Initiatives such as trade-down mortgages, split mortgages and mortgage to rent schemes offer the possibility that people can retain their family home while simultaneously addressing their debt obligations.

I also welcome the provisions allowing for non-judicial debt resolution processes, which represent a modernisation of our law. I am sure the Minister has noted the recommendation by MABS that the limit of €20,000 in respect of the write-off of debt under the debt relief notice process should be increased. I urge him to consider increasing the limit for agreed settlements in respect of the personal insolvency arrangement from €3 million to €5 million to ensure we have a meaningful process. The numbers facing this type of financial distress are not known because it is a private matter which people will only talk about as a last resort. There are many in white collar professional jobs and many entrepreneurs who were running good enterprises but who are now left with defunct businesses due to the change in our economy's fortunes. They have given personal guarantees and are up to their necks in personal debt. An increase in the threshold to €5 million would offer a realistic prospect of addressing a problem which they themselves are anxious to address.

I have concerns in regard to what body will be authorised to make the assessment as to what is essential income for an individual to live on. That can make all the difference as to whether we are offering a solution, because people have to live at the end of the day and we want them to be able to work this through.

I am also concerned as to how personal insolvency trustees will be funded and paid. I have concerns that such payment would not be necessarily or solely on a commission basis and that people would not be thrown to the wolves in that process. I also compliment the Minister for Justice and Equality, Deputy Shatter. One cannot underestimate the complexities involved in arriving at a correct legislative item that balances the need for people to pay their bills and dues when they can do so with providing people with a lifeline and a hope that in cases in which one will never be able to pay one's debt or bill, there is hope and a solution is at hand. Such a solution may not be easy because ultimately, regardless of what anyone thinks, bankruptcy is not an easy road to take. However, this is a solution and I greatly welcome it.

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