John Crown (Independent) | Oireachtas source

During my brief contribution, I have made a couple of points that are probably not germane to the legislation, although I will be making a few editorial comments on it. As regards those who find themselves facing catastrophic, unsustainable, house-losing, bankruptcy-threatening debt, but who have money locked in pension funds that they cannot touch for many years until they are retired, long after the damage is done, and they have lost their homes and been forced into bankruptcy, one wonders if there is not some way they could be enabled to access that money to try to discharge their debt and restart their lives. I know that is not something the Minister can legislate for here, although I have mentioned it on a number of occasions to his Cabinet colleagues with financial responsibility.

Similarly, the Minister will be aware that in some jurisdictions they have non-recourse mortgages. The deal basically is that a person buys a house which is collateral, and if the person cannot service the debt they throw the keys at the bank and it is the bank's house. The bank thought that this house was sufficient collateral for the loan. While I understand that it is retrospectively hard to impose something like that on people who have entered into contracts, one wonders if the enforced prudence that that kind of restriction would place on people who sell debt in future might not be a wise strategy.

In addition, is there any way, even within the confines of the current Bill, to look at that aliquot of the money owed, which represents the amount borrowed in excess of what would have been prudent guidelines, namely, in excess of 2.5 times the salary or in excess of 80% of the value of the house, so that there could be some consideration of a degree of non-recourse for people who find themselves in that situation?

I will now get on to some of the more specific, technical amendments. In the interests of fairness, I must acknowledge my friend and colleague from the Lower House, Deputy Stephen Donnelly, who provided invaluable assistance to me in trying to come to grips with some aspects of this complex and very necessary Bill. As regards the issue of referring to the bankruptcy payment orders, one section of the Bill seems to allow that after the three years of bankruptcy protection has passed, the banks can still - in response to changed circumstances perhaps - come after people for up to five years following completion of the bankruptcy date. In truth, this goes against the spirit of what the Minister is trying to do with this Bill, which is to limit the period of bankruptcy liability. Perhaps the Minister could reconsider that.

It has been brought to my attention that there are people in various jobs in the country, many of whom work for multinationals we are so desperately trying to incentivise to come here. Some of them work in different parts of our public service and they are prospectively barred from taking employment if they are engaged with any part of the legal insolvency process. As regards those who are not in the bankruptcy phase, but in the protection phases early on - who are going through the insolvency arrangements with or without the personal insolvency professionals - can we have a specification in the Bill that those persons could not be in any sense handicapped in their attempts to get employment of this type?

There are a few other practical issues. Over the years, nearly Dickensian strictures were applied to those who could not face their debts. When we got rid of debtors' prisons and brought in bankruptcy laws, the issue arose concerning people who lost many of what were then considered to be the luxuries of financial services, like credit cards and bank accounts. It is essentially impossible to live in our modern society without access to financial instruments such as bank cards and credit cards. Should we state that in bankruptcy cases it would not be permissible to deny people access to a bank account, although perhaps not to an overdraft, as well as ensuring they can have a debit card, if not a credit card? In the absence of such facilities, it is difficult if not impossible to pay some bills and meet some current ongoing household exposure.

Another rather more complicated issue is at stake which concerns those in the insolvency protection process who are making payments to people who are not bankrupted. It appears that it is entirely possible for some individuals in the low or middle income groups, who are going through rescheduling as part of this process and who are having mandatory transfers made to their banks, to end up having less than 20% of their income available to them as disposable income when one factors in tax plus the bank transfer.

For many of the most important, productive and socially worthwhile sectors of our employment economy, including nurses, teachers, social workers and business people - in many cases, disproportionately, women who also have child care responsibilities - it begins to approach a stage where there is an actual disincentive to work if that little of one's income is retained for one's own use. It is in no one's interest if these people decide that it is better for them not to work. It is not in the bank's interest, their own interest or society's interest.

I agree with some of the concerns that have been raised by my colleagues on the Fianna Fáil benches. I hope we will have ample opportunity to tease through a number of amendments we will be proposing on Committee Stage. I thank the Minister for his attention.