Darragh O'Brien (Fianna Fail) | Oireachtas source

As my colleague, Senator Byrne, said earlier, we support this Bill. I acknowledge the complexity of the situation and there was no way that the Minister, with the best will in the world, could have drafted legislation that would have been a silver bullet for everybody's debt issues. It does not cover everything and I am disappointed with some areas in it, but I believe the Oireachtas can work on it to get to a stage where we will have something meaningful. That is not to say that the Bill and what the Minister is proposing to do are not meaningful. They are meaningful.

I endorse much of what Senator Healy Eames said. I will not go over old ground but we cannot talk about this personal insolvency legislation without considering the people who are just about surviving, the mortgage resolution measures that have been submitted to the Central Bank - I accept the Minister is not the Minister for Finance - and trying to move our lenders to a situation where they ease the debt burden on people. I am not necessarily referring to debt write-down but to proposals that I and others have suggested here previously. One is zeroisation of interest. What is the point of charging people penalty interest when they already cannot pay the mortgage? It makes the situation far worse. There is also the option of extending the mortgage term.

The Government brought forward initial measures through the Department of the Environment, Community and Local Government to deal with housing and, for example, buy-to-let mortgages. I do not like the idea of handing over a house to a local authority but that is the position. The Government passed the measure with broad support, but most local authorities will not operate it. I realise this is not within the Minister's jurisdiction but I simply offer it as an example. Should this legislation be passed, the issue is what oversight the Minister will have. When it is passed in whatever guise, a very hands-on approach will be required from the Government.

I echo the comments on what we thought would be non-judicial arrangements being required to go to the Circuit Court. Will the Minister clarify why somebody with a debt relief notice for unsecured debt of up to ¤20,000 might have to go to court to get that notice? We could work on improving that. Will it be in public? That question was asked previously. I have grave concerns about the creditor's veto. The Minister has stated previously that he might be open in the future to considering an independent appeals mechanism. I suggest, and we will table an amendment in this regard on Committee Stage, that there should be an independent appeals mechanism. Even if the Minister states now that he will do that but it does not form part of this legislation, that will be fine. The reason is the 70% veto of creditors. The only person who can appeal is a creditor. A debtor cannot appeal under the Bill. If more than 70% of the creditors do not agree, that is the end. The next step is bankruptcy. The Minister has stated that this is the stick one would hold over the financial institutions. However, bankruptcy is the nuclear option and most people do not wish to reach that stage. It is striking, nevertheless, that the only person who can appeal is the creditor where it does not agree. Perhaps the Minister would clarify that.

The regulation of personal insolvency practitioners has already been mentioned. I worked in the financial services sector before I became a Member of the Oireachtas in 2007. Regulation is crucial with regard to independent financial advice. Will the practitioners be insurance brokers, accountants and solicitors and will they be regulated by the Central Bank? We must also remember that if it is a mortgage broker, for example, it will probably be the same individual who organised the mortgage in the first instance. There is work to be done in this area as regards potential conflicts of interest where an independent broker, who might have been one of the best performers for a mortgage company, is now trying to cut a deal with the same mortgage holder for whom it wrote the mortgage in the first instance. We will have to consider providing that a personal insolvency practitioner cannot be the same person who introduced the loan in the first place. Perhaps the Minister would clarify that as well.

I have examined the debt relief notices and the limits set for subsistence in so far as what disposable income somebody can have at the end of the month. The sum of ¤60 is far too low. The asset amount of ¤1,200 as the maximum value of the debtor's vehicle in order to qualify is also too low. I have no wish to see somebody driving around in a BMW X5 jeep but one would be hard pressed to find somebody who has a vehicle that is worth less than ¤1,200. There must be flexibility in that regard.

This Bill is welcome and is a step in the right direction. The independent appeals mechanism must be a part of personal insolvency legislation, although perhaps not at this stage. However, if the Minister would give a clear indication that if the banks are not playing ball he would have no difficulty with bringing forward an independent mechanism or independent debt settlement office by way of arbitration, that would send a signal. We will have to watch this very carefully into the future. The appeals mechanism is the crux issue in respect of the creditors' veto.

If the institutions do not play ball, well-meaning legislation such as this may not have the impact the Government wants. I ask the Minister to encourage the banks to expedite mortgage resolution measures. The more we can do for people who are not yet in a grave financial situation, through getting banks to be reasonable, to extend mortgage terms and to introduce the zeroisation of interest rates and split mortgages, the better. We need to see it happen.