Kathleen Lynch (Cork North Central, Labour)

It is good to see Bills being introduced by Opposition Members. Some of us on these benches were engaged in that process for a long period.

The debates taking place in the House this week on this Bill and the Keane report give all Members an opportunity to contribute their views on the issue of personal insolvency and mortgage indebtedness. This is an important issue which requires thorough consideration by the House. The problem of personal over-indebtedness is one with which so many of us have become well acquainted in the course of our constituency work. Many of the Deputies who have contributed to the debate on the Bill have given some further insight into the levels of stress and difficulty faced by ordinary individuals as a result of their financial circumstances. For many, indebtedness has not arisen as a result of reckless spending but rather as a direct consequence of the economic downturn, whereby an income shock - through reduced income or job loss - has impacted seriously on their capacity to pay their debts. In my experience, the people concerned want to pay their debts but simply cannot manage to do so within their existing means. They worry constantly about the next bill or demand from a creditor. Many are threatened with the prospect of court action. This is a problem which must be addressed in order that we can adopt a more humane approach to the resolution of the issue of personal debt for those who genuinely cannot pay.

As the Minister for Justice and Equality, Deputy Shatter, stated, the Government will not be opposing the Bill on Second Stage. We very much value the contributions of all Members to this debate and the search for viable solutions. The Government is fully committed to the reform of insolvency law and practice. I welcome the fact that the Minister's proposals for a personal insolvency Bill are in the course of being finalised on the basis of intensive consultations with the relevant Departments and interest groups. I have no doubt that he will be in a position to produce a coherent and comprehensive Bill which will take account of all of the significant issues involved.

I am sure Members will agree that the Law Reform Commission has done valuable work which has been of great assistance in informing our debate. The Government will be taking into account the recommendations made by the commission in its December 2010 report on personal debt management and debt enforcement. However, it will also have the benefit of the findings of the Cooney and Keane reports on this issue.

As has been borne out by the discussions to date on Deputy Michael McGrath's Bill, reform of the personal insolvency regime is not a simple task. This is an extremely complex area of the law, in the context of which the consequences and implications of new policies must be carefully assessed. There is a delicate balance to be struck between the various legal rights of the parties involved. We must design a system which is fair to both creditors and debtors alike. Not to do so would make worse a situation that is already difficult for the parties concerned. The new debt resolution system must offer workable solutions to those who genuinely cannot pay their debts, while also building in appropriate mechanisms to deal with those who will not pay their debts. Any new debt resolution process must have at its core solutions which are appropriate to the level of the individual's indebtedness and which are based on his or her ability to make payments.

Much of the recent debate in the media and this House has been debtor focused and failed to mention the rights of creditors - particularly smaller unsecured creditors - in any debt resolution process. While the ideal situation for many would be to reach agreements with their creditors that would be acceptable to both sides, this may not be an option in some circumstances. It would leave court-based solutions as the only remedy. As everyone is aware, court based processes are costly and for most people are best avoided. The development and introduction of new workable, non-judicial debt resolution processes would offer additional solutions without costly legal fees. While it would be naive to suggest this will solve all debt problems in their entirety, it will provide a framework within which a mediated solution can be worked out if that is appropriate to the individual circumstances involved.

It is incumbent on us, as legislators, to ensure our response to the issue of personal indebtedness is not clouded by mortgage debt alone. While mortgage-related indebtedness is a significant problem, personal indebtedness has a wider context and any new personal insolvency system must address this. In itself, this presents a difficult challenge. In view of the complexity of the issue, the Government has agreed that Deputy Michael McGrath's Bill should not be opposed. However, as the Minister made clear, the Government will progress its own legislative plans in this area. This approach should allow Members on all sides to contribute to the best possible examination of a range of solutions to the problem of personal indebtedness and should ultimately result in the development of a better legislative framework.

I thank all the Deputies who have contributed to this extremely worthwhile debate.

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