Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to the debate. I welcome the Bankruptcy (Amendment) Bill 2015 which is being introduced as a result of the report of the Joint Committee on Justice, Defence and Equality on bankruptcy reform. The Bill will further improve and modernise bankruptcy law and take into account the changes to bankruptcy law proposed by Deputy Willie Penrose in a Private Members' Bill published in March. I thank the Deputy for the work he has carried out on bankruptcy law and congratulate him on the amendments and improvements he has made to this very important legislation. I have no doubt that his contributions have enhanced the Bill.

The Bill will make many changes to existing bankruptcy law, including the reduction of the bankruptcy term from three years to one in all new bankruptcy cases. It will provide for those already in bankruptcy for one year when it comes into force to be discharged from bankruptcy after a six-month transitional period. It will reduce the maximum duration of bankruptcy payment orders from five years to three. These orders require a bankrupt person to pay specified amounts from their income or assets to the official assignee for the benefit of creditors. The Bill will enable the bankruptcy term to be extended to up to eight years in cases where the bankrupt person is concealing income or assets or refusing to co-operate with the official assignees. In such cases a bankruptcy payment order can still be made for up to five years. In very serious cases of non-co-operation or concealment, it will give the court power to extend the bankruptcy term up to a maximum of 15 years. It will provide for the bankrupt person's interest in his or her home to be revested in him or her three years after adjudication if the official assignee has not applied to court within the period for its sale. It will give the official assignee power to disclaim onerous assets. Under Irish law, he or she is obliged to take over legal liabilities on assets owned by the bankrupt person. This can result in the official assignee having to cover expensive costs of urgent repairs and make safe unfinished sites at the taxpayer's expense, while the profits from these assets go exclusively to a small number of creditors. The change will reflect the position in the United Kingdom in order that the beneficiary of the asset will, effectively, take over the liabilities.

As a result of our economic crisis many of those now entering bankruptcy, or already in bankruptcy, have been struggling with unsustainable debt for the past six or seven years. The background to the economic crisis is the disastrous economic policies of the previous Fianna Fáil-led Government. A reduced bankruptcy term and shorter duration for bankruptcy payment orders will provide people in serious debt and no disposable income with an early return to normal economic activity. These changes also constitute a practical boost for entrepreneurs, particularly small entrepreneurs. At the same time, the proposals include strong measures to ensure that a bankrupt who tries to conceal resources from creditors, or to evade his or her obligations, will be liable to a longer bankruptcy term and a longer bankruptcy payment order.

Other changes to the legislation will streamline and modernise key bankruptcy procedures and strengthen the powers of the official assignee. These changes will free up the resources of the official assignee to focus on the small minority of bankrupts in respect of whom there are issues of fraud and concealment. The changes will also save unnecessary bankruptcy administration costs to the State, creditors and debtors and will free up court time. The provisions in the Bankruptcy (Amendment) Bill 2015 complement the reforms which the Government has already introduced, from enactment of the Personal Insolvency Act 2012 onwards. They represent a more modern, less costly, and better balanced approach to a return to solvency for people in debt.

Before entering politics, I ran an electrical wholesale business. More than most, I understand the difficulties faced by people who run into financial difficulties, in many cases through no fault of their own. During my time in business and more recently as a Deputy, I have dealt with many people who have run into financial difficulties. The amendments being made to the Bankruptcy Act 2015 will help those who cannot free themselves from unsustainable debt. The changes being introduced will allow those people make a fresh start from the unsustainable debt that up to now has been a noose around their necks.

I would like to put on the record of the House my support for the amendments to the Bankruptcy Act, which I believe will be a great assistance to those whose debt is unsustainable and want to make a real and genuine effort to break free from that debt. I also welcome that this legislation will act as deterrent to those who do not want to honour their debts or believe that by hiding their assets they can get away with paying those debts.

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