Thursday, 17 December 2015
Bankruptcy (Amendment) Bill 2015: Second Stage
I welcome the Minister of State to the House and generally welcome this legislation. We debated the original changes to our bankruptcy laws in this House under the stewardship of the former Minister for Justice and Equality, Deputy Shatter, two or three years ago. We had a very substantive debate on that occasion. Indeed, the record shows that a more substantive debate took place in this Chamber than in the Lower House. The main element of the legislation before us was presented to the then Minister by many Senators at the time as the preferred option, that is, a one year rather than a three year bankruptcy term. In fairness to the former Minister, he presented a very firm and balanced view as to why he felt that the three year option was more desirable. He forced all of us to reflect on the fact that while bankruptcy might be a partial solution for some people, once the bankruptcy process has taken place, there are still creditors who are owed money and that side of the equation should not be ignored.
Bankruptcy is not a lifestyle choice. It is not an option which people taking out loans, engaging in financial transactions or setting up businesses aspire to. It is an option of last resort and if it can change the lives and livelihoods of people in a positive way, then we must support it. Sometimes we can be a bit simplistic when we talk about bankruptcy. We often compare this country and much of western Europe with the United States. It is argued that in the United States, one is not a successful business person until one has failed many times. It is also suggested that in the US people can engage in enterprise, fail, run up huge debts, leave them all behind them and start again. A balance must be struck between flexibility, compassion and humanity on the one hand and personal and business responsibility on the other hand.
When one strips away the party political broadcast element of Senator Cullinane's comments, one must acknowledge he made a very valid point regarding the fact that the majority of people in serious debt in this country will not come under the provisions of this legislation. People with massive debts across various sectors must be given serious consideration. We must look at other solutions for them. As the country recovers from a profound recession and as we look forward to the outcome of the banking inquiry, we must ask ourselves how such high levels of debt were allowed to be accumulated by so many people. We must ask why massive amounts of credit were extended by financial institutions in such a very carefree and casual fashion. That is part of the problem too.
Hopefully, this legislation will provide a solution for a significant number of people but it will not help everybody whose indebtedness is profound. I commend Deputy Penrose for presenting his legislation and would point out that Deputy Mathews was an almost daily advocate for this type of approach. He made numerous interventions on the Order of Business in the Dáil in that regard. There is a general consensus that the Bill strikes the right balance between the desirability of allowing people to get on with their lives while ensuring that people do not abuse the system. It certainly appears that such a balance is being struck here, although I am not an expert on bankruptcy law. The message that we must send to the public is that there can be a new beginning and a fresh start. However, looking beyond those who will benefit from the new bankruptcy regime, we must debate and then devise a legislative response to the broader issue of debt in this country. Debt is holding back so many people and so many communities at the moment. Such debt includes credit card debt, personal loans and so forth and is of very significant proportions. It must be debated and new solutions brought forward.
Again, I welcome the legislation before us. We had a substantial debate on this issue a number of years ago. The fears and concerns which were expressed so well by the then Minister for Justice and Equality about the broader knock-on effects of bankruptcy on second-level and third-level creditors must not be forgotten. Hopefully, there are sufficient safeguards built into our bankruptcy legislation in that regard.