Alan Shatter (Dublin South, Fine Gael)

Fees should be charged on a proper professional basis. Deputies may be aware that this issue has settled down in the context of the operation of the United Kingdom's individual voluntary arrangement which is similar, in practical terms, to our proposed debt settlement arrangement.

A number of Deputies raised queries about the debt relief notice, DRN. I am happy to offer further clarifications in this regard. Effectively, a DRN is a lower level, cost-effective alternative to judicial bankruptcy in respect of certain qualifying debts, primarily those involving unsecured credit up to a maximum of €20,000. A debtor will be able to make an application through an approved intermediary such as the MABS, setting out in detail his or her financial circumstances. On examination and verification by the insolvency service, this will be deemed to be in order and sent to the court for approval. Once approved, the debts covered by a DRN will be forgiven in full and no repayment will be required. This is the important point. However, in line with the revised period of automatic discharge from bankruptcy and also in view of the rights of creditors, there will be a supervision period of three years. If the debtor's circumstances improve during that period by whatever means, he or she may be required to offer repayments up to a total of no more than 50% of the full forgiven debt for the benefit of creditors. This is a very sensible and humane approach and will offer hope to those who have little prospect of getting out from under what seem to them to be crushing debt burdens. Strict conditions, including those relating to fraudulent behaviour, are prescribed.

The amounts applying in respect of allowable disposable monthly income, namely, less than €60 after payment of reasonable living expenses and assets with a value of less than €400, were criticised by Deputies as being too low. However, the purpose of a DRN is to specifically help those who have very little and not those who may have certain assets which could be sold in order to make some repayment to creditors. By assets, I do not mean essential household items required for normal living. We may ultimately be obliged to provide some indicative guidance in this regard but I am of the view that the range of such items can be easily comprehended.

Creditors will not only be financial institutions - I include credit unions in this regard - but may also be local supermarkets, co-operatives, tradesmen awaiting payment for goods or services or a wide variety of individuals whose own personal circumstances are threatened and detrimentally impacted upon by the failure of a debtor to make payments for work done.

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