Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

A personal insolvency arrangement shall not require that the debtor dispose of his or her interests in the debtor’s principal private residence or cease to occupy such residence, lest the provisions of section 104(3) apply. If one takes the first principle, which involves a rental property, a family home and a proposal for a PIA, one will have to work out a proposal where it is a practical financial proposal to allow the debtor stay in his or her home, unless it is a mansion. One starts off on that premise. It cannot be the case that one forces someone to sell his or her home and the rental property and leaves them homeless. The bias and the purpose of the PIA is to protect the person in the home. That applies whether or not there is a rental investment.

Section 104(3) outlines the circumstances in which the home can be sold under a PIA. In section 104(3)(a) of the Personal Insolvency Act the debtor confirms in writing to the personal insolvency practitioner that the debtor does not wish to remain in occupation of his or her principal, private residence. That is straightforward. In the second case the personal insolvency practitioner has, having discussed the issue with the debtor, formed the opinion that taking account of the matters referred to in 104(2) – I can list them if members wish – the costs of continuing to reside in the debtor’s principal private residence are disproportionately large. That is what I describe as a very large home, someone living in a home that is not essential for them to have a roof over their head. It is a very nice home, it is large but it is not practical in the current financial circumstances. Those are effectively the factors.

Section 104(4) outlines that personal insolvency arrangements should not contain terms providing for the disposal of the debtor’s interest in the principal family residence – this is even where they agree to it - unless the debtor has obtained independent legal advice on such disposal or having been advised by the personal insolvency practitioner to obtain legal advice and declined to do so. One also has to have regard to the protections for family homes that apply under the Family Home Protection Act and the Civil Partnership Act 2010.

I will conclude on this point. In Deputy Donnelly’s example, the particular provision he suggested be included is not needed because the protections are within the insolvency legislation. Where there are difficulties with an investment property and there is a family home and where the background indicates there is a reasonable PIA that can be entered into, it may produce a sale of the investment property but it will not produce the sale of the family home unless it is extraordinarily large and then clearly the arrangement will envisage some funds being made available to the debtor for a smaller home.