Áine Collins (Cork North West, Fine Gael)

I thank the House for the opportunity to speak on this Bill. As the Taoiseach has said, the Bill will not solve the mortgage crisis overnight. However it will bring a change in the relationship between customers and banks, which should give the customer more bargaining power. The period for bankruptcy is being cut from 12 years to three years, something which is long overdue. This will allow people who ended up in unsustainable debt, many through no fault of their own, to start again. We need to allow these people the opportunity to use their entrepreneurial skills and experience to get back into business. These are the people who will create jobs and help restore confidence in the economy. As a nation we must change our attitude towards business people who fail and encourage people who have an idea to try.

In sport people celebrate success and acknowledge failure and we need to do likewise in business. Without people who are prepared to take risks, the economy will not grow. This Bill provides such people with some protection should their business venture fail. In the US, England and other advanced economies this is a given. In the US, two former presidents went bankrupt, as did Donald Trump and many other prominent business people who are now contributing enormously to the economy again.

However, even for these people to succeed we must now in Ireland deal with our huge indebtedness from mortgages, credit cards and other general debt, such as credit unions loans and personal loans. Our personal debt grew by 245% over seven years, a level that is not sustainable. Without debt resolution for our people, our domestic economy will not recover, and that is why this insolvency Bill introduces other ways of dealing with debt.

These methods include a debt relief notice to allow for write-off of qualifying unsecured debt of up to €20,000, subject to a three-year supervision period, an agreed debt settlement arrangement for the unsecured debt and a personal insolvency arrangement for the agreed settlement of secured debt of up to €3 million. None of these options is easy and much of the Bill contains provisions to ensure that these new arrangements will not be abused. The underlying principle must be that those who can afford to pay must pay. Those who cannot pay must go through a vigorous process to ensure that they pay what they can over a specified period of time.

Another important provision is to encourage the banks to come up with their own innovative proposals to facilitate a debt resolution for their customers. I understand that banks are now seriously looking at ways to offer resolutions to their customers, which is very welcome. This Bill will ensure that if the banks are not sufficiently flexible with their customers, at least their customers can opt for a solution offered in the Bill.

The fundamental problem for very many taxpayers is that money gets written off or written down. This money must eventually be paid by someone, ultimately the taxpayer. People who did not get themselves into debt or those who have already paid off difficult mortgages find it very difficult to understand why they will now have to contribute to this debt forgiveness, either by paying tax or having to pay higher bank charges so the banks can make adequate profits to accommodate debt write-offs. This is unfortunate, but the reality is that hundreds of thousands of people in the country were encouraged by the then Government, in co-operation with a reckless banking system, to borrow way beyond their ability to pay back. However, the borrower must take his or her share of the responsibility, which is why the Bill contains such strict provisions.

From a national point of view we all agree we cannot have hundreds of thousands of individuals and households with this level of debt. It effects confidence and prevents the economy from returning to growth. We must allow these people space to recover so they can play a part in our economic recovery which will eventually benefit all society.

The resolution of the mortgage crisis was always going to be a difficult task. The Government has always obliged banks to limit the amount of foreclosures. It is hoped the recent changes in mortgage supplement will force the banks to deal more promptly with distressed mortgages. The scene whereby people can remain in a house and pay rent should also be of assistance. We will resolve the mortgage debt crisis quickly for the good of the economy. It is in the best interest of customers and lending institutions to try and deal fairly and reasonably without necessarily having to resort to the legal provisions contained in the Bill.

The legislation is very welcome. I hope it will give many the chance to avail of a shorter time period of bankruptcy should it be needed. In particular I hope the Bill will help the negotiation possibilities between borrowers and lenders so a more favourable solution can be found for both parties. I commend the Minister and I have no hesitation in commending the Bill to the House.

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