Alan Shatter (Dublin South, Fine Gael)

I thank all the Deputies who contributed to what has been a very lengthy Second Stage debate. There were many and positive contributions spanning across a range of issues in respect of the legislation, in particular with regard to the serious difficulties many of our citizens are confronted by with regard to indebtedness. It is clear from the various contributions made by Members that they are often at the forefront of hearing of these difficulties and seeking ways to resolve them. n recent years every Member has had to deal with constituents under substantial financial pressure who cannot see any light at the end of the tunnel.

I am pleased to present the Personal Insolvency Bill which is significant and legally complex legislation providing for the comprehensive reform and modernisation of our insolvency law and practice. It provides for new and more flexible options to address the circumstances of insolvent debtors. It addresses in a balanced and proportionate way the obligations of debtors as well as the rights of creditors, having regard to the financial reality of individual circumstances. It will incentivise both parties to come to an agreed solution.

The Bill's purpose is to provide for the reform of personal insolvency law and introduce three non-judicial debt resolution processes, namely, the debt relief notice, the debt settlement arrangement and the personal insolvency arrangement. To protect the constitutional rights of all concerned, the Bill makes provision for enhanced oversight by the Circuit Court or the High Court in cases where the debts concerned exceed €2.5 million.

Deputies will appreciate reform of our personal insolvency regime is not a simple task. It is a very complex area of the law and one in which the consequences and implications of new policies need to be carefully assessed. We must get the balance right between the legal rights of the various parties involved. The system has to be fair to both creditors and debtors alike. Otherwise, we risk making worse a situation which is already difficult for the parties concerned. In this debate it seems it is always assumed creditors are financial institutions. The reality is that in many instances creditors are ordinary individuals owed money by other individuals in financial difficulties. Often, it also puts them into difficult financial circumstances, resulting in them being weighed down by debt. It is extraordinary how little of that aspect was addressed during the debate, with the sole focus instead being on financial institutions. The debt resolution process must provide solutions which are appropriate to the level of an individual's indebtedness and based on his or her ability to make payments.

A great number of Deputies contributed to the debate; certainly too many to be able to refer to every individual point raised. I hope those Deputies whose contributions I do not mention specifically will forgive me for not doing so. There are some Deputies' contributions to which I do intend to refer specifically. The issue of the bank veto was raised by many of the Deputies who criticised the Bill as giving an effective veto to banks which would impact on personal insolvency arrangements and debt settlement arrangements. This is a somewhat simplistic reasoning and misses a major point. While there is no denying that creditors can veto the reaching of a personal insolvency arrangement through the weighted provisions with regard to voting at creditor meetings, the new measures taken by the Government also give the debtor a veto. This comes in the form of a significant change to the bankruptcy law. This change has been gainsaid by some Members as not being a balancing factor. I very much suggest, however, it will be in the future operation of debt resolution and will be a very particular and important balancing factor to the benefit of debtors.

We have seen in recent times the so-called bankruptcy tourists travelling to the UK to be declared bankrupt there because bankruptcy in Ireland has been so harsh. By reducing the term of automatic discharge from bankruptcy from 12 years to three, it greatly strengthens the hand of debtors in their dealings with the banks. If a creditor refuses to engage fully and fairly where debts become unsustainable or refuses to agree a responsible personal insolvency agreement, then there is the option for the debtor to file for bankruptcy and, if successful, he or she can be relieved of the unsustainable debts within three years. The reality is this legislation will force financial institutions to take a more realistic view of how to address issues of unsustainable debt in circumstances where substantial sums are owed and individuals are simply unable to pay them. This seems to be a matter some Deputies are unable to grasp.

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