Michael Colreavy (Sligo-North Leitrim, Sinn Fein)

Within the last 90 minutes my office in Sligo was contacted by a middle-aged man in tears. He is a married man with a family. He had his own home with a mortgage and has worked very hard for over 20 years with a State agency. Last year he suffered an occupational injury at work but because it was psychological rather than physical, it was not classified as eligible for occupational injury benefit. When he first contacted my office, he had no income to live on because his employer's sick pay had been stopped. He applied for, and received, an invalidity allowance.

He is entitled to back money from the date he first applied but despite several calls to the Department of Social Protection, the arrears have not yet been paid. Meanwhile, his local bank has been telephoning him and sending him threatening letters for the amount of €1,600. The disability allowance arrears would be well in excess of the latter sum for which the bank is putting him and his family under such stress. Last night, his 16-year-old son took a knife to himself but, thankfully, survived with 16 stitches. He said he did it because he wanted to attend university but felt it was unfair because it was putting more financial pressure on his family. It is scandalous that any bank would do that.

The Bill is complex and ground-breaking, and I accept it is a genuine attempt by the Minister and the Government to assist many people such as the man who rang my office in tears. From their own clinics, every Deputy knows the pain that is being caused. Personal debt, which people are incapable of repaying through no fault of their own, is causing sleepless nights, ill health and stress. While the Personal Insolvency Bill will not fix the debt problem in society, it does attempt to fix part of the problem. For that reason this legislation is welcome, but it is just part of the process. While the Bill attempts to alleviate some of the existing debt problems, those who have most to fear are still very much afraid. I still do not know whether this legislation will help the man who contacted my Sligo office in tears earlier today. I have no doubt that many people are following this debate closely but depending on the final shape of the legislation there may be some disappointment with it. The last thing that already stressed people need now is false hope. We need to get this legislation right first time.

I will not go through all the proposals contained in the Bill because several speakers have already referred to them. There are three arrangements for dealing with insolvency. First, debt relief notices are aimed at debtors who possess almost no income or assets. They will be administered by approved intermediaries at no cost to the debtors. Second, debt settlement arrangements are aimed at those who do not fall within the strict criteria of debt relief notices. Third, personal insolvency arrangements will operate in a similar fashion to the debt settlement arrangements but will allow for the inclusion of secured debt.

The Bill will reform existing bankruptcy rules by reducing the period for bankruptcy from 12 years to three years. However, the eligibility criteria for debt relief do not make sense. The legislation, as currently drafted, requires that a debtor does not have a net disposable income of more than €60 per month or assets and savings greater that €400. What constitutes an asset? Would a wedding ring, television set, fireplace or a three-piece suit be counted as assets? Any of these items could well be worth over €400.

Is the Government proposing that people's homes must be stripped to the bare necessities in order to qualify for debt relief? We must re-examine this matter because there has to be a better way of determining qualification for this relief. We cannot give people relief while requiring them to be paupers. It must also be established how personal insolvency practitioners will propose the debt settlement arrangements and broker their terms. The Bill suggests many ways as to how they might deal with debt, but more work needs to be done on how those arrangements can be sorted out.

The personal insolvency arrangements have received most media attention. They will operate in a similar manner to the debt settlement arrangements but will also allow for the inclusion of secured debt. The voting rules needed to reach agreement are complex and I am not sure they will work in their current form. Those criteria need to be reconsidered.

The Bill states that a person must be in debt to at least one creditor holding security over an asset or property situate within the State and that the he or she must make a statutory declaration to the effect that he or she has co-operated with his or her creditors for the past six months in the context of dealing with any mortgage arrears on his or her principal private residence. In other words, he or she will have engaged with the mortgage arrears resolution process. I received a call in my office 90 minutes ago from a man who was in tears. Does that qualify as engaging in a mortgage arrears resolution process?

Another bone of contention in this legislation is the role which the banks will play in the decision-making process. Effectively, the banks are to maintain a veto over decision making. There is no legal obligation on them to comply with an offer, irrespective of how reasonable that offer might be. A robust independent appeals process to oversee bank activity in this regard must be put in place because we know that the banks cannot be trusted. We must ensure through this legislation that the taxpayer does not again become the fall-guy for the banks in terms of their transferring the amounts they have written off onto the shoulders of those who have already bailed them out. We must ensure the banks cannot use compliance with this legislation as yet another reason to burden taxpayers.

The real test in terms of whether this legislation is effective will become evident when we have evaluated if it has been of assistance to the hundreds of thousands of people who are struggling under mountains of debt. How many of these individuals will be able to avail of the provisions contained in this Bill? While this legislation has potential some important changes will need to be made to it. While Sinn Féin supports the Bill we will be submitting a number of important amendments to it, which will, it is hoped, be accepted by Government, leading to better legislation.

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