Seán Sherlock (Cork East, Labour) | Oireachtas source

Amendment No. 1 is a drafting amendment made by the Parliamentary Counsel to the Long Title of the Bill so as to properly reflect the amendments to be made subsequently to the Personal Insolvency Act 2012. Amendment No. 6 inserts new section 9. The Bill amends a number of sections to the Personal Insolvency Act 2012 in regard to the determination of applications for a debt relief notice, DRN, and to facilitate the processing of these applications by the Money Advice and Budgeting Service, MABS, which provides the relevant approved intermediary for this process. The debt relief notice instrument is one of three new debt resolution processes in the Personal Insolvency Act 2012. It provides, subject to relevant criteria, for the write-off of qualifying debt up to €20,000, subject to a three year supervision period for debtors with essentially "no income and no assets".

The first amendment is to section 25 of the Personal Insolvency Act 2012 where it is proposed to delete the reference in the definition of debt that the debt must be payable within three years from the date of application. The effect of this deletion will be to allow the debtor to propose the inclusion of debt which does not become due until future dates such as term loans in the debt relief notice. The primary objective of the proposed amendment is to assist the MABS and its approved intermediaries in operating the debt relief notice process. The amendment is intended to respond to the following operational difficulties: first, calculating the exact amounts owing under term loans, hire purchase and lease arrangements and instalment orders which may have more than three years to run; and second, that a certain interpretation of the previous definition would appear to allow settlement of up to three years of such debts but then allow continuation of payments to creditors to resume in year four onwards. Such an outcome would run counter to the policy intention that all of the debts, other than the four categories of excluded debt, owed by the debtor must be included in a potential debt relief notice. Neither was there an intention of allowing differential payments to creditors, as all must be treated equally. The change to the definition of debt would capture all of the debts owed by the debtor. If these debts total less than €20,000, the debtor should qualify for a debt relief notice which, if approved by the court, is effective immediately. At the end of the three year supervision period associated with the debt relief notice, all debts are written off, no matter what the original term of a debt may have been.