Oireachtas Joint and Select Committees
Wednesday, 11 February 2015
Select Committee on Justice, Defence and Equality
Personal Insolvency (Amendment) Bill 2014: Committee Stage
The effect of the Deputy's amendment is to reduce the proportion of debt required to approve a personal insolvency arrangement, from 65% to just 30%. That proposal, as the Deputy says, was made on Report Stage of the Bill in 2012 and it was opposed at that point on the basis that it seems unlikely that creditors would accept or agree to be bound by a solution which was only approved by a minority - the Deputy is saying 30% - of value of the overall debt. There would be a situation where, out of all of those creditors, it would only require 30% of them to agree that the arrangement was acceptable.
I am aware of the issue the Deputy is trying to deal with and I believe there are other avenues open to us which we will be considering as a result of the review. The courts might be able to play a further role, for example, and be in a position to make further interventions. There are obviously different definitions of "unreasonable" for different people. A court might make a call where there had been a particular situation in which a solution was being refused by a creditor. We are concerned here with striking a delicate balance between the rights of creditors and debtors.
I agree with the Deputy that we have to be clear that the banks must and should engage constructively on these issues and help people come to resolutions. That is a key issue. Although the solution suggested here is not the right solution and I am not in a position to accept the amendment, I intend to bring forward changes and proposals for the Personal Insolvency Act and will be considering very carefully the range of possible approaches, also in the context of any legal advice. There will be some constitutional property rights, for example, that would impact on this type of decision. I would point out that in the UK, the percentage is 75%. We have 65% here and the Deputy is suggesting going down to 30%. I understand the problem he is trying to deal with but it is a very dramatic reduction in the percentage where agreement is needed in order for it to be accepted. In the circumstances, I am not in a position to accept the amendment but there may be other ways of dealing with this issue.