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

This is the first time a judge of the Circuit Court may, in specific circumstances, impose on lenders an insolvency arrangement which they voted down. That is a very important point to note. We are providing for a situation in which a borrower has only one creditor. I emphasised this point when I was introducing the amendment. Many people would be in that situation, with the bank having consolidated the loans and holding the mortgage. They can get the court review even if the one creditor is opposed to a deal. That is a very wide group of people As I have already said, we are raising the debt relief notice, DRN, limit from €20,000 to €35,000.

When we announced the review in May, one of the key points I made - I have also made it this evening when introducing the amendment - is that it would be based on the court examinership model. If there is absolutely no creditor support in an examinership, it is not feasible. The examinership concept is tried and tested in the courts in terms of constitutionality, which is very important when we are talking about imposing a solution for creditors. With this new measure, if there is no vestige at all of creditor support, even potentially from one of the creditors, the procedure cannot be invoked. That is correct. It is the examinership model. As in examinership, the court may only impose the PIA arrangement in a new court review where there is some degree of support evident from at least 50% of one class of creditors. Under the existing provisions of the Act, only three classes of creditor can be looked to regarding the PIA, as I have said. I have gone into the detail of that. However, in examinership, not only is just one class required, there is far more flexibility about what constitutes a class.

The measures are aimed at assisting people in long-term arrears. They are part of the overall Government strategy. The date of 1 January is there, and it is not intended to impact on new mortgages that have been taken out since that date. It is about targeting those people. Let us remember that 85% of people are paying their mortgages. We are talking about a group of people who have long-term arrears and who have not been able to come to a solution. In some instances, they have not made contact with banks and the agreements have been vetoed at the creditors' meetings. It is to deal with this particular group, which is the reason for the date of 1 January.

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