Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I welcome Mr. O'Connor and his colleagues and thank them for their presentation. I will address a couple of points. Regardless of whether the witnesses like it, the average person does not want to declare bankruptcy.

Regardless also of the process entered into, once they declare bankruptcy the family home becomes part of the equation. The purpose of the process is to protect the family home. That is one of its key ingredients. I would be nervous about the bankruptcy route as an option.

I have had only a quick look at the figures provided. The devil is in the detail. I accept the insolvency service is still a relatively new entity. Appendix 2 of the documentation provided includes data for the first quarter of 2014 and the period from 2011 to 2013. Based on these figures - Mr. O'Connor can correct me if I am inaccurate - 54% of people who entered bankruptcy during the first quarter of 2014 lost their homes, which equates to 37 out of 69 people. A person who enters bankruptcy has at least a one in two chance of losing his or her family home. Equally between 2011 and 2013, some 58%, or 70 people, in bankruptcy lost their family home.

On the PIAs, according to the first quarterly report only four PIAs were entered into and the secured debt write-off in this regard was 19%, which strikes me as low. As things stand the person who goes the bankruptcy route has, at least, a one in two chance of losing his or her home. Even where the banks provide restructures and write-downs under the PIAs, only 19% of the value is being written off. Mr. O'Connor stated that the banks should be buying into the PIAs because they are to their benefit. An issue which arose at a recent meeting of this committee is that of positive equity. The perception is that people who are in positive equity but in mortgage arrears are more vulnerable than people who are in negative equity. In other words, because a property is in positive equity and a person is in arrears with his or her mortgage payments a bank as opposed to providing a write-off will opt to sell the property. Why would a bank opt to provide a write-off when a property is in positive equity? In these cases, family homes are being sold and risky assets are being removed from the banks' balance sheets. I would welcome some commentary from Mr. O'Connor around the issue of positive equity.

In regard to the 523 applications received by the service in the first quarter, the result was 70 protective notices, 44 debt relief notices, seven debt services arrangements and four PIAs. Reference is made on page 5 of the presentation to recent comments made by the banks. Two institutions have stated that over their dead bodies would they allow write-offs in terms of mortgage debt in PIAs. Mr. O'Connor said earlier that if a creditor stands in the way of a solution there are mechanisms available to debtors to deal with this. Perhaps he would outline those mechanisms. As in other countries in the world, in terms of home ownership, in Ireland, the family home is of emotional significance. Bankruptcy should be a measure of last resort. We want the mechanisms to work. Perhaps Mr. O'Connor would respond.