Paschal Mooney (Fianna Fail)

I share Senator Hayden's idea of a third force being established. There should be a role for local authorities, so I would be interested to hear the Minister of State developing that idea. I also welcome proposals in the recent Social Welfare Bill which place an onus on banks to address mortgage-holders who are currently in distress. Prior to the law being passed, the mortgage relief supplement would have been given willy-nilly. The banks were happy not to negotiate with individual distressed mortgage-holders because they knew the Government was going to provide the money. Now, however, there is a 12-month moratorium during which they have to renegotiate and reschedule their debts. At the end of that period under the new scheme it will mean that the substantial amount of money the Government has been paying out will, hopefully, be saved and used in other areas for the benefit of the general public. The Minister of State made some reference to that but I would be interested to know what his views are.

I agree with the recommendations that have been approved concerning the reform of bankruptcy legislation. I cannot understand why we do not have a similar system to that in the UK, given the close proximity between the two countries. There have already been several high profile cases, as well as lower profile ones, whereby people went to the UK to avail of the bankruptcy laws there. Why can we not bring our legislation into line with our nearest neighbour in this regard? I do not understand the lack of logic in not doing so. Why is the bankruptcy law different here?

As regards the most recent initiatives that have been launched by NewERA, it was widely reported that a lady from Dublin managed to get her mortgage substantially reduced. I am sure everybody is familiar with it so I do not want to go into the details other than to say that the original cost of the property was substantially reduced so she ended up owing only €60,000. After the property was sold, the bank absorbed the losses which were over €100,000. She was then left with €60,000 to pay over six years. On the face of it, that seemed like a good development but the down side of it, as far as I am aware, is that individual will now be denied getting back into the credit area for a significant number of years. Her credit rating has gone through the floor and she will have to pay off the €60,000. At the end of it, there is no chance that if she ever wanted to borrow money again she would get it, or at least for a considerable length of time. Therefore there is a down-side to this somewhat compassionate view, as it was put across, that the banks were somehow adopting a humane approach. In an emotional radio interview, the lady herself more less thanked the banks for their humanity, when the reality was totally different.