Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

As this rolls out, some cases will be suited to going down the insolvency route. I suppose one welcomes the development of an insolvency service in the same way one welcomes the development of a cancer treatment centre. One does not want people to be in difficulty, but one welcomes the response to that difficulty.

There will be people who, when they go through that assessment, will not be insolvent. In fact, they may not even require debt write-down. What they may require is debt restructuring. I am not too sure I agree with Deputy Donnelly's comment about 30% of income going towards debt and nothing else. If one is living in a €2 million house and 30% of one's income is going to service the mortgage, one must look at living in a different type of house. I think the blanket approach of 30% across the board is a very simplified one and does not stand up. The vast majority of people who are meeting sustainable mortgages are not in that 30% category and are probably over it, but they are still meeting their bills.

There is a group of people who would have what one might call significant unsecured debt. It is a legacy of the Celtic tiger period, when a person would go to the credit union after a wage increase, be it through benchmarking or overtime, and use this to borrow more money instead of paring down debt. Because of the extra couple of grand a year, their credit union debt went from €5,000 up to maybe €25,000 or €30,000. The same person could have a credit card debt that went up because the ceiling on his or her credit card was increased from €5,000 to €15,000. Likewise, he or she probably got a holiday loan from a bank and a car loan for finance through a car agency. They have the bones of €50,000 or €60,000 out there. The difficulty with that debt is that it is short-term and high-interest debt that must be dealt with alongside mortgage debt. The real difficulty is the interest rate that applies to it in many cases. If that €50,000 could be put on an interest rate of 4.5% or 5%, people would be in a very steady position. In terms of insolvency packages, is any consideration given to using that approach, so that €50,000 could be restructured into an existing debt and some sort of purge could take place?