Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

Senator Norris said the Bill was not complete. I have always been of the view that both this House and the Dáil are engaged in a legislative process. The Bill has undergone a complex developmental stage. When they were published, the heads of the Bill were submitted to the Joint Committee on Justice, Defence and Equality. When the Bill was introduced, it was the subject of a Second Stage debate in the Dáil before being referred to the joint committee for further hearings. As we have proceeded, it has been developed further. With regard to personal insolvency practitioners, substantial regulatory provisions will be put in place. We have been engaged in a wide-ranging consultation process in respect of the different modalities which obtain. The amendments relating to that matter will - out of respect for it - be dealt with in this House. The Seanad is well equipped to deal with those amendments. When we have dealt with them, that part of the Bill to which they refer will have to be referred back to the Dáil.

A question was posed as to why the courts are involved. The courts are only tangentially involved. If, for example, a personal insolvency practitioner secures agreement among the proportionate number of creditors and the debtor and if the insolvency agency has checked all the paperwork and found everything to be in order, the matter will then go before the courts, which will have sign-off in respect of whether it is a debt relief notice, debt settlement arrangement or personal insolvency arrangement. These arrangements will have the authority of the courts and this will ensure that those who enter into them will not - in the years during which they are a party to them - be capable of being sued for any outstanding debts. These arrangements give debtors that protection. This will ensure that when the new regulatory framework is put in place in the European Union, the insolvency resolution process in Ireland will be a recognised court resolution process. In so far as it provides protection, a debtor will never need to appeal to the courts in the context of one of these new resolutions because he or she will have agreed to it. Protection will be provided for creditors who may have been excluded from or not notified of the process. A creditor who believes a debtor has concealed all sorts of financial assets and resources may go before the courts. By and large, the majority of these applications will be dealt with relatively speedily within the courts system and a protective mechanism will be provided.

Senator Quinn referred to a particular issue in the context of bankruptcy and I want to respond to this because it also involves the courts. This is the possibility that after three years, a person could have a further five years imposed on him or her. The legislation involves recognising that people make bad business decisions on occasion, that they get things wrong and that they get themselves into debt. When I became Minister, a person could be bankrupt for the remainder of his or her lifetime. In the 2011 Act, the term of bankruptcy was reduced to 12 years.

It is now coming down to three years. It is to give people an opportunity, because if one is an entrepreneur and one gets it wrong, one can eventually get one's life back on track again. There are very discrete circumstances in which bankruptcy can be extended for an extra five years. It is probably the only section to which I will have time to refer, namely, section 146, which inserts a new section 85A into the Bankruptcy Act. The circumstances in which that will happen is where an individual who has been made bankrupt either failed to co-operate with the official assignee on bankruptcy in the realisation of assets or hid from or failed to disclose to the official assignee income or assets which could be realised for the benefit of creditors. That is where it can be extended. It cannot be generally extended simply on a whim or discretion.

I am conscious that I have not had an opportunity to deal with a myriad of issues that have been raised. I apologise to Senators for not getting to some of them. I have no doubt that we will get an opportunity to address many of them as we take Committee Stage of the Bill and I would be very happy to do that.

I will conclude in a single sentence. This is complex legislation. It deals not simply with home mortgages and difficulties in that area but with insolvency generally. It is designed to bring our insolvency architecture into the 21st century. It is designed to give real hope to people who are currently mired in debt, that there is a structure through which they can work to resolve their indebtedness issues. It is designed to provide a mechanism to bring debtors and creditors together in circumstances where frequently they would normally be at arm?s length and many of them would end doing battle in the courts with each other. It is designed to do it in circumstances in which the costs are kept to a minimum.

The final point to be made, because it answers a question raised by a number of Senators, is that personal insolvency practitioners will not be paid simply by the person who is indebted. The personal insolvency practitioners may not get paid at all, unless they succeed in bringing about a debt resolution. Their payment will basically be appropriate fees for work done, as agreed by the debtor and creditor, because if there is a debt resolution, be it a debt settlement arrangement or personal insolvency arrangement, their fees will come out of the pool of money from which creditors themselves hope to benefit in recovering some of the debt due to them. There is going to be not just a debtor who has an interest in ensuring that fees are reasonable, there is going to be a creditor or perhaps a series of them, who are anxious to ensure they are kept reasonable. There is a similar procedure in place in the United Kingdom for our equivalent of the debt settlement arrangement. They do not have a personal insolvency arrangement equivalent in the United Kingdom. In the UK where they have been working this and now also in Northern Ireland the fees have reached a level that is reasonable and appropriate because basically they are under the microscope every time there is a meeting between debtors and creditors. It will find its own level but there will be some regulation and oversight. As Members will see when we get to Committee Stage there will be a substantial additional Part to be put into the Bill to deal specifically with the regulation of personal insolvency practitioners.