Mr. Lorcan O'Connor:

That is correct. The legislation includes this as an option in a non-exhaustive list; therefore, it is disappointing that certain creditors are saying that under no circumstances will they entertain that kind of solution. I would distinguish some comments from others made before the committee in April. Certainly I acknowledge that there is a very big difference between secured and unsecured debt. Were we to blur the lines, we could end up with a scenario where we would all be paying our mortgages at credit card level interest rates. Clearly, that is not something we want.

Secured debt brings with it certain rights and options. It is also important to say the write-off of debt is not the be all and end all. When an insolvent debtor comes through the door of a personal insolvency practitioner, he or she is tasked with finding a solution that will return the debtor to solvency. In many cases, that may not require a secured debt to be written off. There is what is called by many a waterfall set of solutions. Extending the term of a loan, reducing the interest rate on a loan or carrying out other tweaks could return the person to solvency. If that is the case, there is no need to look at or even consider the potential to write off debt. However, there will be situations where, having exhausted all of these points, there is still a difficulty or an issue to be addressed to return the person to solvency.

The final point I will make in distinguishing between some of the comments made is that a number of creditors said they would regard it as extremely unusual or have difficulty in foreseeing circumstances where they would be required to write off debt because their other forbearance measures are so generous. I see this as very different from a creditor saying that, irrespective of forbearance measures, it does not contemplate ever agreeing to a secured debt being written off.