Timmy Dooley (Clare, Fianna Fail)

I am disappointed the Government is not prepared to work with us.

We recognise the importance of taking a non-judicial and non-adversarial approach to debt settlement. This is the appropriate and sensible approach to the problem, as recognised in the Keane report. It is critical, however, that the solution adopted addresses personal debt and mortgage debt together because any attempt to deal with them in isolation would be a recipe for disaster. The proposals we have made provide a platform for addressing personal and mortgage debt. The debt settlement arrangement is important. The independent insolvency trustee we propose would have the authority to manage both aspects of the problem. Negotiating with creditors will not be an easy job because when creditors are not paid it impacts on the wider economy and those to whom the creditors owe money. We recognise, however, that if one continues to kick the can down the road by failing to address the issue, the economy will ultimately be the loser. The option of applying a five year restructuring term gives people the capacity to work through the immediate crisis, while giving the creditor some expectation that if the circumstances of the individual concerned improve, he or she will have the capacity to have their debt repaid. It also provides for an option of writing off or writing down the debt where it is clear that there is no hope that the individuals concerned will pay.

The Bill takes a balanced approach by providing that agreement would have to be reached with 60% of creditors in terms of value. This is a good solution. The debt settlement order provided for will bring finality and avoid a scenario in which the goalposts are continuously moved.

The proposal that individuals experiencing difficulty with their mortgage could apply to the new debt settlement and mortgage resolution office is a workable solution. The office would then work with the bank and the mortgage holder would be taken out of the mix for the time being. It is also vital that a binding order be issued to ensure the banks also know where they stand.

The principal flaw in the Keane report is that it places banks at the front and centre of the entire process. The failure of the banks to face up to the problem of the speculative and commercial debt associated with the property boom necessitated the establishment of the National Asset Management Agency to unbundle this debt from the banks' balance sheets.

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