Séamus Kirk (Louth, Fianna Fail)

I take this opportunity to thank my party colleague, Deputy Michael McGrath, for bringing this Private Members' Bill before the House and affording us the opportunity to speak on the matter.

This Bill is a new step in regard to debt settlement and mortgage resolution. I know from my constituency office and the number of queries and representations on this matter that this Bill is urgently needed. During the boom period many people who bought and built houses now find they are left with a depreciated value on their home and as unemployment increases, more issues in regard to debt repayment problems are coming to the forefront.

I welcome this Bill and it is a step in the right direction. With a collective cross-party approach, we can offer some help to a large number of people in need. We welcome the recommendations of the Law Reform Commission's Report on Personal Debt Management and Debt Enforcement of December 2010. We recommend the creation of an independent statutory office where distressed borrowers are treated fairly and the utmost discretion is shown in each case.

It also important to note that the establishment of a non-judicial debt settlement agency is a key recommendation of the Cooney report on mortgage arrears and the Keane report.

I will describe the principal provisions of the Bill. If debtors are not in a position to meet their personal debt commitments, there will be a process under the newly created debt settlement and mortgage resolution office, DSMRO, to apply for assistance from a licensed personal insolvency trustee to examine their financial affairs in detail and negotiate with their creditors under a debt settlement agreement. A debtor will only be able to enter into a debt settlement arrangement once in a ten year period unless his or her case is determined to be exceptional. A debtor who seeks to enter a debt settlement arrangement will also be able to apply for a protective order to prevent the enforcement of personal debts by creditors or enforcement agencies. If a debtor defaults on the arrangement for six months, the arrangement will be deemed to have failed.

Debtors deemed to be insolvent under the Minister's regulations will be able to obtain a debt relief order which may release them from some or all of their debts and liabilities. However, a debt relief order will not release an insolvent debtor from any secured debt, and a creditor will be able to object to the debtor's participation in the debt relief order process within 12 months by applying to the DSMRO for an investigation.

The Bill will allow a person who holds a mortgage to obtain a mortgage resolution order in respect of a family home mortgage. A mortgage resolution order will only be granted if the financially restricted mortgagee is the owner of the mortgaged property, has resided in the property for two years prior to making the application, provided written confirmation that he or she will not lease or sell the property and not previously been granted a mortgage resolution order. Once a mortgage resolution order is in place, any financial institution involved in the order will be prevented from initiating legal proceedings against the mortgagee. A financial institution will not be able take any action to secure repayments or seek repossession of a mortgaged property that has been included in a mortgage resolution order.

The debt enforcement office will be responsible for the general oversight and management of debt enforcement procedures carried out by debt enforcement officers, including putting in place an internal mechanism to handle appeals. The Bill will also reform the enforcement mechanisms to be used when handling debtor situations and explicitly emphasises the principle of proportionality, which simply means focusing on the least restrictive mechanism for the specific debtor. The individual enforcement mechanisms discussed in the Bill are instalment orders, attachment of debt orders, attachment of earnings orders, goods seizure orders for seizure and sale of goods and orders to receive and retain money due to debtors from future sale.

The Bill is urgently needed to assist the large number of distressed home owners and should be passed by this Chamber. I urge Members from all parties to support it in order to assist those who are struggling with debts and mortgage repayments. The importance of finding a solution to the problem of distressed mortgages cannot be overemphasised because the problem will have to be addressed before the domestic economy recovers. The House has an opportunity to embrace the Bill as a significant contribution to addressing a critical issue for many in the country.

See this speech in context