Mr. Ross Maguire:

In terms of bankruptcy, we already have the stick since earlier this year, so we do not need anything else. It would be better to have a one-year stick but it is strong enough as it is. What I am trying to get across to people - it is almost an educational issue - is that they do not necessarily lose their home in a case of bankruptcy. What happens is that the assignee takes over one’s legal interest in the property. For example, in the case of a couple, if the husband were to go bankrupt, the house would now be owned by the non-bankrupt wife and the assignee. The assignee does not want to sell the house and he repeatedly says that. He will sell if it is in positive equity and the mortgage is unreasonable, but other than that he is very happy for people to continue to pay their way. If the house is in negative equity he will want to get out, so he has to come up with a formula whereby he asks the non-bankrupt spouse to buy him out for a nominal sum - a figure of €5,000, which might seem like a lot but could potentially be paid over a long period. That means the house is taken out of bankruptcy. With all the other unsecured debt gone, and a reasonable mortgage, those people will stay happily in their house.

There are bankruptcy cases in which a person will lose their house, but they would lose it anyway. The difference here is that they could potentially get more time in the house, but also, all the negative equity is gone. The idea that one loses one’s house in bankruptcy is simply not the case. That is what we want to try to get across. People say they will lose everything, but they will not. For example, in the law at the moment one is allowed to retain the normal assets of life. The value put on that is €6,000. We went through a case recently with a person who was a high earner who was looking at bankruptcy and when he looked around at the various things he had, knowing that his wife owned half of the table and half of the chair, he did not have anything that would be worth more than €6,000. He had an old car and it was needed for work, so in fact there was no down side for him in terms of the assets he would lose, even though his interests in the family home would transfer to the assignee. He would go to work in the normal way, the assignee would take part of his income for a period if an excess was available, and life would go on.

Part of what we are doing on the tour is trying to educate people to the effect that bankruptcy does not involve losing everything and in many cases there is no down side. It allows one to reboot and the debt is gone. Ms Fanning is in a better position to answer the other question.