Aodhán Ó Ríordáin (Dublin North Central, Labour) | Oireachtas source

Amendment No. 1 seeks to delete text from an amendment to section 91 of the principal Act. The effect of the Senators' amendment is to remove the reference in the principal Act to co-operation with the MARP before a borrower makes a proposal for a personal insolvency arrangement. I thank the Senators for their amendment but I cannot accept it.

Under the existing section 91(1), a borrower must first co-operate with the mortgage lender under the MARP approved by the Central Bank, before he or she can make a proposal for a personal insolvency arrangement. If the borrower does so, but is not able to agree a restructure with the mortgage lender, he or she is then eligible to propose a personal insolvency arrangement. The current provision does not address the situation of a borrower who has been in mortgage arrears on his or her home, has co-operated with the MARP and has subsequently entered a restructure, whether MARP or non-MARP, but the restructure has failed, or is unsustainable, and the borrower remains insolvent. It is important that a borrower in this situation should be eligible to make a PIA proposal. This section of the Bill is designed to expand the categories of person who can apply under section 91 and to ensure that there is no bar to an insolvent borrower in such a restructured mortgage situation being eligible to make a PIA proposal. This section, therefore, already seeks to significantly enlarge the categories of persons who may apply for a personal insolvency arrangement and to ensure that a person in a restructured home mortgage will be able to do so. To remove the link to co-operation with the MARP for any borrower wishing to propose a PIA goes well beyond the scope of this amendment and would require very full policy consideration, not least due to its possible negative effects on incentives for borrowers to engage as early as possible with their lenders regarding any repayment difficulties.