Mr. Lorcan O'Connor:

In fairness, Deputy Michael McGrath acknowledged that is an enhancement that perhaps could be made to the Bill, that is, to offer that holistic solution. Taking it in the context of how it would currently be dealt with within a personal insolvency arrangement, what the personal insolvency practitioner does when a debtor comes in his or her door and says he or she has difficulty paying his or her debts is to try to maximise as much as possible to go towards the mortgage, because clearly the number one priority is to try to keep people in their homes. If one tries to divert as much as possible of the income that a person has that way, then there is a better chance of him or her staying in his or her home.

The remaining debts tend to be unsecured such as credit cards, personal loans and so on. In effect, there would be a token payment or a relatively small payment to unsecured creditors in that scenario. One can see from the examples at the back of our submission that the kind of return those creditors could expect to receive within a PIA is a percentage return in single digits. A return of 4%, 5%, or 6% is likely. It is a relatively small amount, but they are then dealt with. Any balance remaining is written off. The debtor is left with only one debt, the mortgage, and therefore there is a much greater chance of finding a sustainable solution in that scenario.

In the cases appearing before us that others had previously attempted to fix, they had ignored the fact that, for example, the debtor had a credit union or credit card loan. They only examined how much money the debtor had to pay off the mortgage. They believed that it should work, but they forgot that, two or three months later, the credit union would be knocking on the door or the credit card company would be making a phone call. It is difficult on that basis.

The typical PIA candidate whom we deal with is a married person who is in employment, in his or her 40s, has children and has an average debt of €450,000 but, on average, has five debts in addition to a mortgage.