Alice-Mary Higgins (Independent) | Oireachtas source

I move amendment No. 8:

In page 10, between lines 7 and 8, to insert the following: “Amendment of section 99 of Principal Act

14.Section 99 of the Principal Act is amended—

(a) in subsection (2)(b), by the insertion of “in respect of secured debts less than €2,000,000” after “Personal Insolvency Arrangement”, and

(b) in subsection 2, by the insertion of the following paragraph after paragraph (b):

“(ba) the maximum duration of a Personal Insolvency Arrangement in respect of secured debts exceeding €2,000,000 shall be 120 months but a Personal Insolvency Arrangement may provide that this period may be extended for a further period of not more than 12 months in such circumstances as are specified in the terms of the Personal Insolvency Arrangement;”.”.

Effectively, this amendment seeks to extend the period of observation in respect of larger-scale insolvency. It would extend to ten years, rather than six, the period in which a person is still under observance in terms of their insolvency and in which there is continued liability to debtors. This relates to secured debt rather than unsecured debt. Effectively, if one has written off a mortgage of more than €2 million or made a personal insolvency agreement in respect of a mortgage of more than that amount, one would remain in the personal insolvency scheme, attempting to address and use all parts of one's income in excess of reasonable living expenses towards addressing that debt in respect of the mortgage for a period of ten years rather than one of six years. This is around recognising there is a difference of scale in insolvency. It is different if one has a family home and that home and its mortgage and so forth is placed in a situation of insolvency and that is secured debt. When we talk about secured debt, we are really talking about mortgages, properties and those kinds of assets. However, if, for example, one owned and was in debt relating to an apartment block of €2 million, in terms of having commercial properties or other business properties and so forth, where there is a mortgage of more than €2 million that is being written off.

We know that some family homes are worth more than €2 million. That is a very high-level asset for a family to have, especially at a time when so many are struggling for housing of any kind and may not be in the position of having secured debt at all because they do not even have secure housing of any kind. In that context, I am not seeking to remove access to the personal insolvency scheme in these cases.I am simply trying to suggest that where we are talking about a very large amount of debt and a very large asset which will be retained at the end of this scheme, then it is reasonable that there would be a ten-year period where all efforts are being made. I know that, in many cases, it is bankruptcies rather than insolvencies that can often be the problem, and I know this whole scheme is designed to encourage people from going that bankruptcy route. However, we have seen people who are incredibly wealthy, who are then insolvent or bankrupt, and then, somehow, five years later, they are incredibly wealthy again. In between, people who have been struggling the whole way along continue to struggle the whole way along. Families with small amounts of debt that has been building up, who are doing without the basics and who are cutting corners in their lives and in their health to pay their debts, continue to have that slow incremental drip of more debt on them. Many people will try to do that rather than seek insolvency.

This is really designed to have an assurance that where people are in a position to have been so wealthy that they have €2 million worth of a secured asset, they will be asked to make a little bit longer of an effort to pay back. That is why I propose extending this to 120 months, which is about three to four years longer than will apply to others with an asset of less than €2 million.