David Norris (Independent) | Oireachtas source

The Bill is a step in the right direction, although it is not complete. The first thing I have to say following my compliment is that it is complex, as the Minister has noted, and this is why he has dealt with it in considerable and helpful detail. It is cumbersome and it is also astonishingly incomplete. The Minister stated:

Determination of appropriate guidelines with regard to the reasonable expenses that may be allowed to or negotiated by debtors in an insolvency process will require further consideration. There are no such guidelines readily available or agreed at this point. ... This is an area of work with which MABS is particularly familiar in the context of its current operations.

That is one lacuna in the legislation. The Minister also stated:

[I]t is my intention to bring forward comprehensive proposals on this matter on Committee Stage. There will be a new Part 5 to replace the current Part 5 ...

Although he does say that a substantial amount of work has been done on it - and I accept that - it is very curious to bring a Bill before the Seanad, particularly after it has passed through the Dáil, which is so substantially incomplete. The Minister speaks of introducing amendments on Committee and Report Stages. I hope that some of those may be amendments that have been suggested during discussion of the Bill in this House. Again, however, I maintain that Report Stage is very late and if we disagree with the Minister all we can do, instead of amending his legislation on Report Stage, is accept or reject amendments. The Bill is cumbersome, complex and incomplete in the sense that there is a considerable number of lacunae in it.

I have some concerns regarding the personal insolvency measures and the inclusion in the Bill of personnel who will assist and advise people. These will be professionals who will be licensed and so forth but I wonder if there will be enough of such people. I wonder also if provision is being made in the courts because the courts are part of this whole process. The debtor first goes through the Money Advice and Budgeting Service, MABS, then the Insolvency Service of Ireland and then the courts. It is a tripartite system, like Gaul - Omnia Gallia in tres partes divisa est. Everything is done in triplicate which seems extraordinarily bureaucratic. In Sweden they go straight for the money. They go straight into the State assistance service and I wonder if that approach was considered by the Minister.

I raised this whole issue, in a general sense, in this House about four years ago. At that time I suggested the development of a department of home security - not, I must stress, homeland security - so that the citizens of this State could be secure in their homes. This Bill may go some way towards this but I point out to the Minister that in very recent times one of the large UK banks has exited this country and sold its portfolio of mortgages at a 90% haircut. Why, in the name of God, was no mechanism provided whereby the bank could sell those homes to the people who are endangered by their mortgages? That seems to me to have been a logical thing to do.

I ask the Minister to explain to the House why the supervisory period is three years here, when it is one year in the United Kingdom. While I would think that even though there would be a lesser incentive for Irish people to obtain residency in the United Kingdom now that the period has been so reduced, a difference still exists. I have some difficulties and problems with the Bill. The Minister and I had a little joust about the fact that he said the Bill does not provide for any process whereby negative equity can be "automatically" written off. There is a substantial difference, in my opinion, perhaps not in the Bill but in the Minister's speech, between being written off, full stop and being written off automatically. If the negative equity is written off automatically it does not leave any room for manoeuvre.

As much information as possible should be provided on how the personal insolvency practitioner will work, on the funding available to make the process manageable and on whether there will be sufficient personnel in the courts. There has been no regulatory impact assessment provided by the Minister. I respectfully request such an assessment, which is a statutory requirement, because without it the debate is incomplete.

I am concerned that upfront fees must be paid by debtors before they submit an application and receive a judgment. If they are in financial difficulties already, presumably the fees paid to the personal insolvency practitioner will make that situation considerably worse, particularly if the debtor is not eventually granted a debt relief notice. The limit of ¤20,000 means that only 15% of the clients of MABS would qualify and in that context I suggest, in line with the recommendations of the Free Legal Advice Centres, FLAC, that the limit be raised to ¤30,000 to make it more realistic. The question of the net disposable income limit of ¤60 or less and the items that are excluded from that, also worries me. Reference is made to household items and equipment necessary for work but such items are not listed and the provision is very vague. We do not know categorically what can be excluded. We must examine that section of the Bill closely and ask the Minister to provide a list of the items concerned, which he has not done to date. The asset limitation of ¤400 needs to be increased because it is very miserly. The value of a debtor's motor car is set at ¤1,200 which seems extraordinarily low. My own car might just qualify but I am hoping not to become insolvent just yet. The Bill provides that if a car - or other goods - is part of a hire purchase agreement, it is affected by the application for debt relief. The treatment of hire purchase agreements should be flexible enough to allow MABS to apply to the Insolvency Service of Ireland to have the hire purchase agreement continued, notwithstanding the application for a debt relief notice. Under the legislation as drafted, the hire purchase agreement must be terminated and in that case, the debtor would then be without a car.

There are many aspects of this complicated legislation that require a good deal of teasing out. I do not always agree with my colleague, Senator Byrne, who, like myself sometimes has an abrasive manner but I agree with him that this is a very significant Bill. I have not had time to put anything like the degree of reservations or questions I have on it to the Minister. I look forward to further discussion of the legislation and I hope the Minister will be open to suggestions from all side of the House in terms of amending the Bill. I have put forward some of my reservations and I welcome the fact the Minister has stayed in the House for this discussion. I hope this House will be used to fill the lacunae that the Minister has acknowledged exist in the legislation. The Minister can make use of the Senate as a place where valuable ideas can be obtained and incorporated into the Bill to the benefit of everyone.