Alan Shatter (Dublin South, Fine Gael)

Many Deputies spoke about developing some form of non-judicial independent agency or process to adjudicate, arbitrate or act as an appeals process in a binding fashion in regard to debt settlement between creditors and debtors. However, the new debt resolution processes are designed to operate on a voluntary basis with common sense and enlightened self-interest in mind rather than coercion. I know of no such example of the type of body that appears to be demanded by some Members or suggested in a recent Private Members' Bill existing in any jurisdiction. No Deputy has been able to give an example of such a body. There is good reason for that. Such a body would be struck down by the courts as a gross interference in the rights of parties to conduct their affairs. Perhaps those preparing Committee Stage amendments in this regard will enlighten us in due course.

They might also address what they now propose will impact on individuals who are creditors and entitled to moneys outstanding and due to them as a consequence of work they have carried out, services they have provided or products they have manufactured or sold. That is a point which no Deputy who raised this issue attempted to address at any stage. The State cannot impose a settlement on parties to a private contract involving the provision of goods, services or capital. The concerned parties must seek agreement. The only potential State involvement is in the provision of the judicial bankruptcy process. Either agreed arrangements are entered into or we have a courts system in which adjudications can take place in the context of bankruptcy. It is not possible to have something that is both agreed and compelled simultaneously.

Reference was made to personal insolvency practitioners. These individuals will have a key role to play in the negotiation of realistic, workable and mutually acceptable agreements between debtors and creditors. I expect that when the new debt settlement arrangement and personal insolvency arrangement processes are up and running, there will be a very high agreement rate. Why will this be the case? It is because it makes sense and is the best option likely to be available. The alternative option may be bankruptcy. I am sure most persons involved in debt resolution processes would agree that the latter is best avoided.

When financial institutions finally come to address the position of debtors in a serious way, they may discover that they will recover greater sums through agreeing personal insolvency arrangements rather than forcing them into bankruptcy. The benefit of the personal insolvency arrangement for debtors revolves around the specific provisions contained in the legislation which will facilitate homes being retained and debtors being allowed to reside in them, with the prospect - after a period of years - of finding themselves back in a sustainable and viable financial position. In that context, the Bill specifically provides for enhanced protection for a debtor in regard to his or her principal private residence. Many speakers who were critical of the provisions contained in the Bill appear to have missed this point. In fairness, it was addressed by the majority of Members who fully understood the important implications of that particular provision. In the case of the Opposition, Deputy Stephen Donnelly did valuable work in producing a Private Members' Bill relating to this matter and has recognised that what is proposed is a genuine and real protection for those who have homes, are in financial difficulty and require assistance. The provisions contained in the legislation send a very specific and particular message to financial institutions.

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