Joan Burton (Dublin West, Labour)

The best way to do that is to have the mortgage arrears resolution process managed by MABS. As the Deputy probably knows, most banks now have dedicated desks and sections to deal with customers in debt difficulties.

Some people seem to suggest that people should be able to walk into a social welfare office and get an arrangement, where the Department of Social Protection would simply pay over money to the banks without engagement in a resolution process. From my experience of business, I would not recommend that approach at all. I have worked in this area and I know that if someone is deeply in debt, the situation is often very complex. We must try to help people with their whole portfolio of debt so that they can stabilise the situation and get back on their feet and, most importantly, keep their family home. This is what the code of conduct on mortgage arrears does. While I am not the greatest fan of our two largest banks, in fairness to them they have worked hard at doing this and have built up dedicated staff to deal with the issues.

There will always be difficulty with regard to debt settlement arrangements, between getting a fair resolution that recognises the needs of the borrowers and their need to be kept in their homes and a recognition of the requirements of the lender. In many cases, to get that balance requires the wisdom of Solomon, particularly where people have lost their jobs. That is the reason for the work being done currently by my colleagues, the Minister for Finance and the Minister for Justice and Equality, on the creation of a new insolvency series of structures here to replace our old-fashioned bankruptcy laws. Previously, bankruptcy almost followed a person for life. Technically, bankruptcy is a 12 or 13 year process, but it follows a person for life. Other jurisdictions have a much shorter process. We have specific constitutional provisions with regard to property rights and lenders have property rights relating to mortgages. Therefore, it is a difficult issue to address in the context of the Constitution.

I am determined that the MABS Service and the €50 million plus that my Department spends are used in a way that ensure maximum engagement by lenders. At the same time, we must remember that the relationship of the Department is not directly with the lenders but with the individuals who have lost their jobs and suffered a loss of income. These people are entitled in law to receive support from the Department and the Department assists them. We want to do this in a way to ensure the banks will engage and in my view, this is a reasonable approach.

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