Robbie Gallagher (Fianna Fail) | Oireachtas source

Cuirim fáilte roimh an Aire go dtí an Teach tráthnóna. I welcome the Minister of State to the House to discuss this very important legislation. On behalf of the Fianna Fáil Party, I very much welcome the Bill which reforms personal insolvency legislation to help borrowers hit by Covid-19 and offers those borrowers whose income has been severely affected the protection of the personal insolvency Acts. The measure will also help borrowers at risk of losing their homes and that is vitally important. I am delighted there is a commitment in the programme for Government that the Government will address the issue of personal insolvency with a view to bringing in reforms. I welcome the Government standing over that reform.

The burden of debt is a huge issue for many families, causing great stress, not just on the borrower but on the entire family household, including children, both from an mental health and physical health perspective. I have recently seen figures from the Insolvency Service of Ireland. Since that service was launched, almost 11,000 protective certificates have been issued and 7,659 settlements have been reached with individual borrowers. That is very much welcome as it allows them to get their lives back on track. As Senator Ward outlined in his contribution, it will stay with borrowers forever, but at least it gives them a second chance to get up and running and to lift the stressful burden of debt that hangs over them and the entire household.

The Personal Solvency (Amendment) Act 2015 introduced a key protection for insolvent homeowners who were struggling to pay their mortgage debt. It allowed them the right to seek a review by a court of a mortgage lender, or other creditors, where they refused even a proposal for a personal insolvency arrangement. That was very much welcome. However, the protection currently only applies to home mortgage arrears dating from 1 January 2015. This Bill will address that particular condition in that mortgage arrears must predate 1 January 2015. Post-Covid, that condition means a person who now finds himself or herself insolvent and in home mortgage arrears arising from a unforeseeable loss of income will be shut out from accessing this vital core protection. The last thing in the world we want to do is close the door to any debtor or family who find themselves in this position. The Bill also removes an obstacle for an insolvent person with very little income, or assets, to resolving their debts under the personal insolvency Acts by means of a debt relief notice.

It has a number of other conditions, one of which is in line with Covid, where meetings will be allowed to take place remotely. That is a sensible, realistic step based on the times that are in it. It helps to move that process on and that is very much welcome. It also adjusts the asset ceiling for an insolvent person applying for a debt relief notice, the debt restructure designed for people with very little income or assets to remove an obstacle for recipients of lump sum payments under some social protection allowances - for example, fuel allowance, carers support and so on.

This Bill has, thankfully, been welcomed by the Insolvency Service of Ireland which has been very complimentary about it. It stated that the Bill will assist many people who are struggling with unsustainable debts, which the economic impact of Covid-19 has only exacerbated as well as creating a new debt problem for many families.Many families were struggling with debt burdens prior to Covid-19 but this has been further exasperated by Covid-19, with a reduction in income for these unfortunate individuals.

The Bill has also been welcomed by the Citizens Information Board, which is very happy with it, particularly in the context of the increase in the asset threshold from €400 to €1,500 for a debtor. This will make the threshold more accessible to many people who have debts up to €35,000 written off.

There are other provisions in the Bill. Section 2 increases the personal assets ceiling for a debtor to be eligible for post-debt relief from €400 to €1,500. Again, this is sensible and a practical step forward and I welcome it. In addition, a debtor must also have total debts not exceeding €35,000 and net disposable income not exceeding €60 per month, including social welfare payments other than child benefit but excluding reasonable living expenses, and no likelihood of the financial situation improving in a three-year period. In a case where the financial situation improves in a three-year period, there is a mechanism in place whereby it can be revisited.

Senator Ward touched on the burden of unsustainable debt and the effect it has on debtors. Earlier, I provided some statistics. Behind every one of these statistics is a family who, I can only imagine, is stressed out beyond comprehension in trying to lift this burden of debt that is upon them.

An aspect that has been brought to my attention, and on which I would welcome the comments of the Minister of State when he is summing up, is with regard to debt that is not attached to a principal private residence. The family holding of a farmer could be incorporated in the farmland. There may be no debt attached to someone's principal private residence but, nevertheless, there is debt attached to the land and the land is the only form of income the farm family may have. This particular situation is not addressed in the Bill and I would welcome an amendment at a later date. I am sure there are many others outside of the farming community who have debts and whose principal private residence might not be burdened, as such, with debt but perhaps other debts that need to be addressed are a burden to the particular borrower and family. I would welcome if this issue could be looked at with a view to bringing forward an amendment at a later date to try to address it.

I compliment the Minister of State on bringing forward the legislation and I look forward to its speedy passage through the House.