Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank Mr. O'Connor for that reply. He is saying that the banks will realise that it is in their commercial interests to sign up to a PIA in certain circumstances because the debtor holds the ace card of the bankruptcy option in reserve.

However, that is contrary to the spirit of what was intended in the legislation. We do not want debtors threatening to go down the road of bankruptcy or to have thousands of bankrupts in Ireland because banks have been unwilling to co-operate with the spirit of the legislation. Given the fact that the two main lenders have made it clear that they have no truck with personal insolvency arrangements, PIAs, we have a serious problem.

It is early days in the service's life. While the numbers are low, the witnesses have stated their expectation that thousands of people will avail of it within the next year or so, which is welcome. However, it is not good enough to assert that, if people threaten bankruptcy, the banks will realise it is in their interests to sign up to PIAs. That is not what was envisaged. In some cases, the banks have given two fingers to the State and the new Insolvency Service of Ireland, ISI, by refusing to sign up to one of the main options provided for in the legislation.