Seanad debates

Wednesday, 22 June 2011

5:00 pm

Photo of Lorraine HigginsLorraine Higgins (Labour)

I endorse the views of my party colleagues, who have all presented fair and reasonable arguments for addressing the current crisis affecting up to 200,000 homeowners. As we are all very aware in this House, people are under enormous pressure owing to their mortgages, unemployment and, in many cases, the Revenue Commissioners. However, people in financial difficulty with their homes usually have the same difficulty with their personal loans, credit cards, car loans, etc.

I want to make two related points on the motion that I believe should be considered. First, I propose that we legislate as soon as possible to address the findings in the recent paper by the Law Reform Commission on personal debt management and debt enforcement. In particular, I would like to see an examinership-style relief being made available to individuals. This relief is available to limited companies experiencing short-term problems meeting their debts as they fall due. Generally they are afforded court protection for up to 100 days from their creditors pending a decision of the courts with regard to their long-term financial viability. Individuals should be afforded almost a year's protection, if at all possible. We must act as this is a matter of urgency. There are many innovative and skilled people who are currently struggling to make ends meet in this crisis and they will not survive. Legislation of this nature needs to be drafted and implemented as soon as is reasonably practicable.

The taxpayers of Ireland have bailed out both AIB and Bank of Ireland to the tune of billions of euro, yet these are the same people who are pushed to the brink by these institutions when their mortgages are in arrears. If we are in arrears, we are threatened with repossession. If our property is repossessed, it ends up on the market for sale, generally at a lower price than the amount owed thereon. If the market is aware that the property is repossessed, the property will attract a lower price. We should stop this practice and consider ways of helping people who are in financial difficulty. I propose that both the aforementioned banks consider the possibility of remortgaging their properties at today's market prices. This would be a win-win situation as it would ease the burden for the mortgagor and eliminate bad debt from the banks' balance sheets and crystallise their losses. We need to take such steps sooner rather than later because there are people who do not have time on their side.

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