Feargal Quinn (Independent) | Oireachtas source

I welcome the Minister and I appreciate the detailed explanation in his speech. There has not been enough recognition of entrepreneurship in Ireland. Senator Lorraine Higgins touched on that point. If Lord Alan Sugar lived in Ireland, he would not have been able to get out of bankruptcy. F.W. Woolworth went bankrupt three times before he built up his huge empire. There is a need for entrepreneurship and to recognise that, on occasion, people fail. We must get a balance between the two.

There are some improvements that could be made to the Bill. I am concerned about the lack of an independent arbitrator. Let us suppose a homeowner and a bank cannot come to agreement. Should they simply have the choice between the bank's will and bankruptcy? We must find a balance somewhere along the line. The Bill allows banks to reapply, through the courts, to add an extra five years to the initial three year bankruptcy term. That will mean an effective eight year term, which is far too long. It is only 12 months across the Border. We must bring this in line. Others have made the important point that people in businesses are closing down and moving across the Border, which is bizarre. The issue of resolving the mortgage crisis is not addressed fully in the Bill. We must find a way to get over the problem.

The problem of mortgage arrears must be resolved. Unsustainable mortgages must be addressed through loan modification, bankruptcy or non-judicial debt resolution. Debt settlement arrangements will be of little use to many families in trouble. Mr. Eoin Collins, writing in The Sunday Business Post, stated "a major flaw in the new legislation is that it will make it harder for people to go bankrupt because debtors will have to prove to the court that they've been engaged in a six month personal insolvency arrangement process with the bank before declaring bankruptcy". Can the Minister comment on that point?

Senator Crown raised an interesting point about bank accounts. One possible improvement which has been overlooked is to guarantee the right to operate a bank account. Surprisingly, this is a difficulty for many undischarged bankruptcies in the Republic, unlike in Britain and in the North. Life without a bank account in the modern world goes beyond mere inconvenience. One wonders at the public policy logic for compelling people, known to be in financial difficulty, to operate on a cash only basis. Senator Crown referred to having a debit card, if not a credit card. There must be some logical improvement in the Bill on that basis and I suggest the Bill be amended on Committee Stage.

There are many other areas we could cover. For instance, the Minister referred to Australia's bankruptcy system during the debate in the other House. There are concerns in Australia that the system is sometimes used by those who enter into agreements without proper consideration. They turn around and ask for relief. Can the Minister comment on the protection we have against such cases? I hope the legislation can make a real difference to businesses and individuals.

It is evident that we need to stem the tide of people crossing the Border to the United Kingdom to avail of a bankruptcy system. The Sunday Timesreported that confidential figures from the Bank of Ireland showed the harsh lifestyles it expected from home owners in return for leniency on their mortgage repayments. For instance, private health insurance is permitted, although the maximum budget is ¤166 a month. That would not even cover the cost of even VHI's most basic plan for families. How are the banks still calling the shots? How do they have a veto in this vital area?

The Bill provides that distressed borrowers should be left with enough to provide for a reasonable living. That seems to be a vague definition. Surely, it should be decided by an independent body. In Greece individuals have to prove in court that their income is not sufficient to continue paying their debts. Setting aside living expenses, equal repayments are made to both secured and unsecured creditors from remaining funds for several years. The Minister has seen what is happening in other countries and taken on board some ideas. However, he is coming up with an Irish solution to an Irish problem. The Bill can be improved in several areas on Committee Stage. The Minister has put his heart and soul into this legislation and I know he wants it to last a long time, to prove itself worthy and, when looking back, to have solved a problem.