Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

The legislation will, hopefully, reach new levels in addressing the crisis endured by so many people over the past number of years. It will amend the Bankruptcy Act 1988 by reducing the automatic period for discharge from bankruptcy from three years to one year; reducing the term of bankruptcy payment orders from five years to three years; providing that where the family home has not been sold by the official assignee after a three-year period, it will revest in the bankrupt person; increasing the sanctions for those who fail to adequately co-operate with the official assignee during the bankruptcy process; and abolishing the practice of the statutory sitting, whereby a bankrupt person was obliged to attend court after the adjudication of bankruptcy and make a full disclosure of his or her property.

Many of the proposals contained in the legislation follow the submissions made by my colleagues on the Joint Committee on Justice, Equality and Defence, which was mentioned earlier by its chairperson. The committee received a significant number of submissions in the area and published a report, which stated there was "overwhelming support for reducing the term". I was struck by two submissions by the Association of Personal Insolvency Practitioners, APIP, and the Free Legal Advice Centre, FLAC. APIP stated:

We believe that where debtors have fully cooperated with the Official Assignee and make a full and honest disclosure of all their assets and liabilities, there is no public good served by delaying a debtor's discharge beyond one year... [T]he stigma of bankruptcy and the restrictions associated with it are onerous and harsh and where the bankruptcy arises from no fault of the debtor or through their misfortune, we believe providing a discharge for the bankruptcy after one year is proportionate.

In a similar vein, FLAC stated: "For consumers, unexpectedly faced with massive, unexpected over-indebtedness, the three year term of being bankrupt is a long one and the label and connotation of bankruptcy can be a heavy burden for them and their families to face." It was clear that many stakeholders who made submissions to the committee felt the current regime was too onerous. It was also pointed out by a number of them that a reduction in the bankruptcy period, as well as a reduction in the terms of income payment orders, would bring Ireland into line with the United Kingdom and, therefore, make our debt restructuring system more competitive. The legislation, thankfully, follows that line, which is significant.

One of the reasons for Ireland's economic success and for our thriving cultural and social life is the fact that we are a small, flexible and open society and economy acting as a bridge between the US and the EU. There are many benefits to this. However, this model also shines a bright and intense light on weaknesses within our economy. One of those weaknesses includes our outdated legislative instruments for dealing with debt, which place too onerous a burden on those seeking a fresh start. As a result of the weaknesses in how we dealt with debt, many Irish debtors opted to file for bankruptcy in England instead of the state in which they had most of their business dealings. European legislation facilitated this easy reorganising of affairs to qualify for UK bankruptcy, often putting businesses here at a loss. By reforming our laws, we, as a country, will become competitive in how we deal with the business people who find themselves in this tough position and, hopefully, will provide a solution to the problems many people still face here.

It is important, however, to ensure that the new debt restructuring system is not left open to abuse by individuals who are simply seeking to game the system and leave other businesses at a loss. After all, bankruptcy often leaves other functioning businesses facing bills left unpaid by those granted bankruptcy. There is a need for the new legislation to ensure those who decide to opt for bankruptcy to show the utmost good faith. Failure to do so should disqualify them from any settlement under these proposals. It is up to both the courts and the executive to guard against any abuses which may become apparent following the enactment of this Bill.

We have a duty to all citizens, not only those in debt. We must offer a path forward for those who find themselves engulfed in debt, while at the same time protect the interests of those hard-working people who engage in businesses across the country and pay their way. There is a need for a balance to be struck and one area where a balance has not been struck is dealing with the mortgage and housing crisis. It is unlikely that the Bill will significantly address this problem, yet it appears that the Government is seeking to declare that the mortgage arrears crisis will be resolved through bankruptcy, but nothing could be further from the truth. The shocking reality is that more than 38,000 families have been in mortgage arrears for more than two years and bankruptcy will not be an effective remedy for them. In a significant admission, the Minister for Finance stated earlier in 2015 that approximately 70% of those who were declared bankrupt would lose their family home. They become homeless and as a result have to seek social housing from their local authority. That policy does not make sense to me or other Members in the Chamber. By repossessing homes, the banks are simply shifting the problem from their balance sheets to social housing lists, which causes massive distress and trauma for families across the country.

While there are many things for which the Government can be lauded, its failure in dealing with the problem of housing and homelessness and in the health service will be a black mark against any of the achievements it tries to claim. While listening to the radio today, I heard that 1,000 children would spend Christmas in a hotel because of the failure of the Government which has prevented the construction of affordable houses in cities in order to drive up NAMA's revenues. It has slashed local authority budgets, resulting in full social housing waiting lists. It has sold off thousands of housing units to US vulture funds as citizens sleep rough on the streets. It has ended the dream of home ownership for many generations with its rules for mortgages and caused many families across the country to be evicted because of its repossession rules. Its legacy in the area of housing will be to its great shame.

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