Stephen Donnelly (Wicklow, Independent) | Oireachtas source

That is correct. I spoke about the issues address in the amendments in my contribution on Second Stage. It would be great if the Minister were to accept amendment No. 3 and disappointing if he were to choose not to accept it as it is technical in nature. As I outlined on Second Stage, the guidelines for putting in place a personal insolvency arrangement provide that the timeframe for doing so must be more than three months. The issue, therefore, is that this legislation gives the borrower and personal insolvency practitioner two months to reach a personal insolvency arrangement. To produce a personal insolvency arrangement, the personal insolvency practitioner must review the case, including the financial statement and submit an application for a protective certificate to the personal insolvency service. The personal insolvency legislation stipulates that a personal insolvency practitioner has 70 days to develop a proposal, have it voted on by the creditors and submit it to the court for assessment. The personal insolvency practitioner must also ensure that creditors representing 65% or more of the total debt agree to the proposal and record the creditors' meeting results, etc. The amendments propose a technical change because the two month timeframe provided for in this legislation appears to be contrary to the current guidelines. The purpose of the amendment is to ensure that if and when the court directs the borrower and lender to develop a personal insolvency arrangement, they will have sufficient time to do so. Two months does not appear to be a sufficient period and for this reason I ask the Minister to accept the amendment.

Amendment No. 7 relates to the costs and who pays for the personal insolvency arrangement. When the judge orders the borrower and lender to draw up a personal insolvency arrangement, a question arises as to who pays the cost of engaging a personal insolvency practitioner. This issue remains unresolved. We will have to wait and see how it plays out in the normal course of a personal insolvency arrangement, for which a market price has not yet been set. It may be the case that the fees for the personal insolvency practitioner will be paid from future payments made by the borrower and, as a result, the lender will de facto take the hit as this would manifest itself in lower debt repayments.

My specific concern is that where a bank moves for repossession, it is reasonable to assume the borrower who is about to lose his or her home will be in a distressed position and have virtually no means. The chances that he or she will have sufficient income in the subsequent few years are also slim. As there is no requirement on a personal insolvency practitioner to take on the case, I am concerned that personal insolvency practitioners will refuse to engage because they will realise that the banks have a veto and do not have to agree to anything. The banks will simply state they engaged in the process before returning to court to obtain possession of the borrower's house. This is how I believe the scenario will play out in most cases. There is a real fear that personal insolvency practitioners will decide that neither the bank nor borrowers will pay their costs and will refuse to draw up a personal insolvency arrangement. As a result, borrowers will either be unable to engage a personal insolvency practitioner or they will only find one who is not very good and is taking on work that others may not want to do. The proposed solution in this case is that the lender should pay the costs of the personal insolvency practitioner.