Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

I acknowledge Deputy Howlin's role as a Minister in the Government that brought in this legislation. I also acknowledge the role of the then Minister for Justice and Equality, Alan Shatter. It was a priority in the civil law division of the Office of the Parliamentary Counsel and important legislation. I was thinking about our debate yesterday on the Private Security Services (Amendment) Bill and the mechanism for the enforcement of court orders to repossess property assets. What we are debating today is related to that and we speak about what we at one point referred to as "NAMA for debtors", the mechanism put in place by the State to help people who have got into difficulty with debt to avoid losing their assets or to restructure their personal finances in a way that helps them to retain some of those assets and move forward to the next stage of life with a greatly reduced debt burden.

The personal insolvency arrangement, PIA, regime is worthwhile and valuable. It incentivises debtors and creditors alike to restructure debts and distressed assets in a sustainable way without recourse to protracted litigation. Much of this is rooted in the housing and banking crises, as previous speakers have mentioned, the impact of both of which is still being felt more than 13 years after the crash.

Yesterday and again today, many Deputies have mentioned the need to have a competitive banking system in Ireland that mortgage interest rates were too high. We know from the Central Bank report yesterday that mortgage interest rates in Ireland are the highest in Europe which, coupled with the macroprudential limits on mortgage lending, makes life extremely difficult for first-time buyers and other mortgage holders. Mortgage holders must be aware that the extreme difficulty for banks to exercise their security in Ireland has significantly contributed to those high interest rates compared with Europe.

Those in mortgage arrears should be treated with compassion and given meaningful help. The PIA regime contributes to that, as do the Abhaile scheme and mortgage-to-rent schemes, all of which are designed by the State to protect the good faith person who cannot pay. Any insolvency regime must also be rigorous in order to ensure that it benefits only those people rather than those individuals who will not pay or indeed individuals who refuse to disclose assets. We know that they exist too. Most people in this situation are in modest circumstances and personal difficulties, including people with illnesses and people who sustained income loss and never managed to make it up because of circumstances. Most people are in modest and difficult circumstances, for example, older people with no opportunity to get new employment.

There are 25,000 mortgage accounts in long-term arrears at present but just 5,000 PIAs in place from the past eight years, with last year being the first year that we had 1,000 in a year. Why do we think that is when so many people are struggling with bank debt? Is it a persistent stigma? Is it a lack of information? Is it that bank letters themselves are terrifying and hard to read? Is it the transparency with which personal details are gone through in the courts? Is it unfamiliarity with the system generally? One gets a voucher from Abhaile to see a PIP and there is no other fee unless an arrangement is put in place. People need to know that this is available. I appreciate that this is in response to the effect of the pandemic and the loss of jobs and businesses. Those risks are considerable, notwithstanding the economic supports and efforts that the State has made to try to mitigate the risk involved. I accept that we have a good long way to go and it is important to deal with this in legislation now.

I want to raise the legal cost structures relating to the PIA regime. There is currently no real cost disincentive to taking a case or lodging an appeal on behalf of debtors, regardless of whether it is run. In each such instance, there is a fee to be taken by the PIP, solicitor and barrister involved. Creditors deal with their own fees. I would be interested to see what proportion of cases lodged or appealed by creditors are actually run compared with those taken by the representatives of debtors. There needs to be a more reasonable balance of risk. The State needs to be careful that it is not simply financing a small proportion of practitioners at the expense of the debtors they represent, with the State supporting them in restructuring their finances as they are entitled to do.

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