Finian McGrath (Dublin North Central, Independent) | Oireachtas source

I thank the Leas-Cheann Comhairle for the opportunity to speak on this important legislation, the Personal Insolvency (Amendment) Bill 2014. This is an urgent Bill and I hope it assists the many families under stress with mortgages and other major financial problems. Our duty as legislators is to support and assist these families as well as to come up with solutions, by which I mean solutions that are feasible and sustainable. There has been much talk in the past four years and it is about time we saw action and about time these people got adequate help. In the past four years we have seen an increase in poverty, the number of people losing their jobs and the number of families under stress. This is the reality for many people and that is why the Bill is urgent.

The Personal Insolvency (Amendment) Bill amends the Personal Insolvency Act 2012 in respect of the procedures for the approval of debt settlement arrangements and personal insolvency arrangements. Moreover, it makes supplementary provision for more detailed procedural aspects in respect of a DSA or PIA. It aims to clarify, where necessary, the detailed procedures which apply in respect of both processes. That is essentially what this legislation is about.

The broader humanitarian issue is about families and people who are in distress. There are families suffering and worrying about making repayments and it is a difficult time for them. The situation impinges on relationships and children going to school and college. It puts people under severe stress. We need to face up to these realities in the debate.

Let us consider the current situation and what is going on in the broader society. In its first year of operation, a little over 300 people were granted one of the three options open to them by the Insolvency Service of Ireland. A similar number declared themselves bankrupt. Given that more than 100,000 people are in long-term mortgage arrears and thousands are struggling with unsecured debt, we expect that approximately 10,000 would have gone through the service or have been declared bankrupt by the courts in the same period. A total of 100,000 is a significant number of people to have been affected by this issue.

Many families are really struggling. Many people are in debt but are not seeking help and this is something we must deal with as well. These people are living below reasonable living standards because of a commitment to pay off their debt. These brave people are suffering and scraping together every euro and cent to pay their mortgages. Along with a lack of awareness of the solutions available this may be the reason for the lower-than-expected numbers seeking help. This is something we must examine. It is an important issue. Many families are very proud and do not like to get into financial difficulties. They want to pay every cent that they are perceived to owe to financial institutions. We should remind them that it was not their fault if they lost their job or if they got hit in the economic downturn. We should remind them that there are procedures and legislation in place to assist them. It is important to say that to them. There are many brave people who are very shy and reserved and for whom the term "in debt" is almost a bad word. These are fine people - we know many of them ourselves - and they should be encouraged to get assistance and supports.

The most recent quarterly report from the ISI states: "So far this year, the ISI has dealt with insolvent debtors with an aggregate debt of almost one billion euro." As of 22 October 2014, there were 140 personal insolvency practitioners and 43 approved intermediaries authorised by the ISI. These are the figures we are dealing with. These are the statistics and the realities. I emphasise the importance of supporting the families. According to the ISI the total debt in approximately 1,200 cases is close to €520 million. It is important that we emphasise the importance of knowing the detailed facts and what is going on in broader society.

Many people say the legislators in this House are out of touch and living in a bubble. We are not out of touch. Deputies meet these families every day in our constituency offices and at local public meetings. We are very much in touch. There is one thing about Irish politics: one could never accuse Members of being out of touch. There is a relationship between the local Deputy, as a public representative, and the people. They know the real issues. This is not a party statement; it applies across the board in all political parties and particularly among my Independent colleagues. It is important that we make these points in respect of the Bill.

Let us dig deeper into the legislation. As I said earlier, the main purpose of this legislation is to resolve an urgent consideration. Legal advice, confirmed by the Office of the Attorney General, has identified that the drafting language used in two provisions governing voting by creditors on a debtor's proposal for a statutory debt deal, a debt settlement arrangement or a personal insolvency arrangement could possibly be open to an alternative interpretation to that intended by the Oireachtas. The effect of this alternative interpretation would be to impose an extra requirement on the debtor, potentially making it more difficult to gain creditor agreement, even to a reasonable proposal. This is the main purpose of the Bill. I accept that there has been no court challenge so far or decision on the possible alternative interpretation and, were this to occur, the court may well uphold the established interpretation. However, given the importance of the matter, the Attorney General's office has advised that it appears preferable to make a prudential amendment as a matter of urgency and to put the wording beyond doubt. I support this view. It is sensible and I commend the Attorney General on the matter. The relevant sections are sections 4 and 12. This measure will avoid any risk of uncertainty or delay pending a court decision arising from parties to statutory debt deals. Furthermore, it will preserve the intention of the legislation. The advice of the Attorney General on sections 4 and 12 is important in view of the possibility of uncertainty and delay. We cannot allow that to happen. We need to be prepared and we need to be strong on this issue. This is why I welcome these changes to the legislation.

A second point in respect of this legislation is important. The Bill includes a supplementary provision to clarify the more detailed procedures which apply where creditors are deciding on a debtor's proposal for a debt deal, debt settlement arrangement or personal insolvency arrangement in two specific scenarios. This may not be urgent but it has been included in the Bill on the advice of the Attorney General since it arises in the same sections of the legislation. Effectively, the Act provides for a standard decision-making procedure by a vote at the creditor's meeting. Alternative decision-making procedures may arise only in specific scenarios. The Act sets out detailed procedures for these scenarios, including notice periods, time limits for decision, procedures for varying any decision and documents to be provided to the Insolvency Service of Ireland and the court.

Overall, this is important legislation. I welcome the publication of the Personal Insolvency (Amendment) Bill. I hope families gain from this legislation and I hope they will be assisted in a strong way because many of them have been suffering for too long.

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