Trevor Ó Clochartaigh (Sinn Fein) | Oireachtas source

Tá céad fáilte roimh an Aire, mar is Bille iontach tábhachtach é seo agus is mór agam deis a fháil labhairt air, mar go bhfuil an oiread daoine sin ins an bpobal atá faoi chruachás airgeadais de bharr an méid a tharla sa tír le roinnt blianta anuas.

The publication of the Bill was much anticipated both by legislators and the public at large. I have come across quite a number of people struggling with distressed mortgages who were anxious about what this legislation would contain. In my time in the House I can recall few other examples of legislation which attracted as much interest. The Bill has attracted such interest naturally because it could materially affect so very many people. There are tens of thousands struggling with distressed mortgages and the situation is likely to remain serious for several years. Many people extended themselves and borrowed more than they could afford for houses which were extravagantly overpriced out of the fear that if they did not, they would never get on the property ladder. Many of them are now on lower incomes because of job losses and wage cuts and paying off a mortgage on a house which is only worth a fraction of its original price. People are being brought to the brink.

The legislation will, however, come as a disappointment to many of those who were eagerly awaiting it and the primary reason is simple. The Bill provides for the banks having complete power over personal insolvency arrangements.

Regrettably, I fear that when the bank has the whip hand, resolutions which might have worked otherwise will now not be contemplated. However, we will not be voting against the legislation. Sinn Féin welcomed its publication and the need for some action to be taken in this area is long overdue. While we believe it is deficient, we welcome its publication as a starting point but, in itself, it does not achieve what the debtors of Ireland need it to. Anyway, we will be supporting the legislation and submitting amendments on Committee Stage, just as my colleague, Deputy Pádraig Mac Lochlainn, did in the Dáil to try to remedy the deficiencies as we see them.

We have engaged with this legislation constructively from the outset. We warned against the banks having a veto. When the scheme was published we stated that it was essential for the proposed insolvency service to be independent, that a more humane approach to bankruptcy was needed and that the banks would have to compromise as well. I regret that this has not been taken on board and that the Bill provides for the banks to have complete power in respect of personal insolvency arrangements. We will table amendments to remove the bank veto capacity. While the debt settlement proposals will help some, they will not help large numbers of families who are struggling with high levels of personal debt. We will also table an amendment to reduce the amount in the eligibility criteria for a personal insolvency arrangement from ¤3 million to ¤1 million. The Bill should not cater for those who were reckless commercial buy-to-let landlords or those who took excessive risks; it should protect those who are struggling with debts with regard to the family home. We have called for an independent agency to be empowered to enforce legally binding settlements on debtor and creditor. The only other option open to people in serious arrears is bankruptcy. There are changes in this regard and it is welcome that the bankruptcy term has been shortened from 12 years to three years. Given the drastic effect it can have on people's lives, bankruptcy should be the last resort. Anyone entering bankruptcy stands to lose all of his or her assets, including the home, and we must do what we can to prevent people from being forced into that situation unnecessarily. People should be helped to remain in their homes and the independent agency should examine how to make mortgage debt sustainable on a case-by-case basis.

Other speakers have alluded to the three new forms of voluntary debt settlement arrangement that will be brought about by the Bill. Debt relief notices are aimed at debtors who possess almost no income or assets. They aim to provide a low-cost alternative to bankruptcy and would involve the eventual write-off of debt after a three-year moratorium. Debt settlement arrangements are aimed at those who do not fall within the strict eligibility criteria of the debt relief notices but cover only unsecured debt. A debt settlement arrangement is proposed by a personal insolvency practitioner and voted on at a creditors' meeting. It involves the periodic distribution of payments to creditors and a write-off of the remaining debt after a maximum period of five years. The personal insolvency arrangements are related to the debt settlement arrangements, but these allow for the inclusion of secured debt. Once there is agreement from a majority of both secured and unsecured creditors the arrangement is capped at ¤3 million unless otherwise agreed by the secured creditors.

These new formulae are positive and we hope they can assist families who are under pressure. Like the Free Legal Advice Centres, we share concerns that the five-year period for review of personal insolvency arrangements is too long and we are inclined to agree that there is a need for an annual review. At any rate, the primary difficulty of the bank veto remains. The reality is that there will be no legal obligation upon the banks to accept reasonable applications from customers in arrears, nor will there be a legal obligation upon any bank to accept an application for one of these resolution options for customers in arrears. Further, there will be no right to appeal a bank's decision, potentially leaving a debtor with no option but to apply for bankruptcy.

It is those who stand to lose their homes whom we need to protect most. We are not in the business of facilitating buy-to-let landlords who made foolish investments. We believe that an independent body, properly appointed and set up, would be in a position to distinguish in this regard and could make it a priority to ensure that the backs of ordinary homeowners are not broken in trying to repay mortgages that were never fair or realistic in the first place and were in any case merely a function of the banks' reckless lending and of the property boom. The Government is in control of several of the banks but it has failed to put them in their place. There is no recognition that it should be the creditors rather the banks who call the shots on these issues. We believe there should be an independent body which can deal with mortgage arrears and debt resolution and we call on the Government to recognise this.

Sin ráite, táimid ag fáiltiú roimh an méid atá déanta go dtí seo. Tá súil againn, nuair a bhéas na leasaithe á thabhairt chun cinn ar an chéad chéim eile go mbeidh an t-Aire sásta éisteacht leo sin.