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

This amendment provides for the replacement of the current section 99 with revised text that seeks to simplify the provisions. Section 99 of the Bill sets out a number of protections for secured creditors in a personal insolvency arrangement. The claw-back mechanism provides that where secured debt has been written down under a personal insolvency arrangement, PIA, and the property that is the subject of the security for that debt is subsequently disposed of by the debtor for an amount or at a value greater than the value attributed to the security for the purpose of the arrangement, the debtor may be obliged to pay an additional amount to the secured creditor. In other words, some or all of the debt forgiveness that the debtor gained originally following a write-down of secured debt under a personal insolvency arrangement could, due to an increase in property values at the time of a future sale within a period not to exceed 20 years from the date of the PIA, be clawed back in favour of the secured creditor.

Subsection (9) is intended to ensure the claw-back only applies where the sale proceeds exceed the outstanding amount of the secured debt. As mentioned earlier, the claw-back is intended to prevent a debtor gaining a windfall at the expense of a secured creditor. However, no such windfall arises for the debtor in the case of what is known as a short sale, that is, where the sale proceeds of the property subject to the security are not sufficient to discharge the outstanding secured debt. The main purpose of the proposed replacement of section 99 with a new text is to improve the clarity of the provisions regarding the claw-back mechanism and to provide for situations where there is more than one secured creditor in respect of the same property.

I propose to withdraw amendments Nos. 85 to 97 which have been incorporated into the replacement section 99 that is proposed to be inserted by amendment No. 84b.