Frances Fitzgerald (Dublin Mid West, Fine Gael) | Oireachtas source

I move amendment No. 5:

In page 13, between lines 19 and 20, to insert the following:

“Amendment of section 91 of Principal Act

10. Section 91 of the Principal Act is amended—(a) in subsection (1), by the substitution of the following for paragraph (g):

“(g) that the debtor has made a declaration in writing declaring that he or she has co-operated for a period of at least 6 months with his or her creditors who are secured creditors as respects the debtor’s principal private residence in accordance with any process relating to mortgage arrears operated by the secured creditors concerned which has been approved or required by the Central Bank of Ireland and which process relates to the secured debt concerned and that—

(i) notwithstanding such co-operation the debtor has not been able to agree an alternative repayment arrangement with the secured creditor concerned, or that the secured creditor has confirmed to the debtor in writing the unwillingness of that secured creditor to enter into an alternative repayment arrangement, or

(ii) the debtor—

(I) has entered into an alternative repayment arrangement and has, in good faith, endeavoured to comply with that arrangement, and

(II) the personal insolvency practitioner has provided the debtor with a confirmation under subsection (2A);”,

and

(b) by the insertion of the following after subsection (2):

"(2A) A confirmation under this subsection is a confirmation in writing by the personal insolvency practitioner that, having regard to the financial circumstances of the debtor as disclosed in the Prescribed Financial Statement completed by the debtor, and the terms of the alternative payment arrangement referred to in subsection (1)(g)(ii), it is the belief of that practitioner that the debtor, if he or she were not to enter into a Personal Insolvency Arrangement, would be unlikely to become solvent within the period of 5 years commencing on the date of the personal insolvency practitioner giving that confirmation.”.”.

The amendment is designed to remove a potential bar to some insolvent borrowers being able to make a proposal for a personal insolvency arrangement and, therefore, to access the new court review under the Bill. It relates to people who were in mortgage arrears on their own homes and who have entered into an agreement to restructure their mortgage.

Under section 91(1) of the Act, a borrower must first co-operate with the mortgage lender under the mortgage arrears resolution process approved by the Central Bank before he or she can make a proposal for a personal insolvency arrangement. If the borrower does so but is not able to agree a restructure with the mortgage lender, he or she is then eligible to propose a personal insolvency arrangement. The question has arisen, however, as to eligibility where a borrower has co-operated with MARP and has entered a restructure, whether MARP or non-MARP, but the restructure has failed or is unsustainable, and the borrower remains insolvent.

It is important that a borrower in this situation should be eligible to make a PIA proposal. This amendment clarifies that this is the case by explicitly adding that a borrower is eligible to propose a PIA if he or she has co-operated with MARP and has entered a MARP or non-MARP mortgage restructure, which he or she has tried in good faith to comply with but remains insolvent. Insolvency is confirmed simply by their personal insolvency practitioner confirming that the person remains insolvent and is unlikely to become solvent within five years without being able to avail of a PIA.

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