Friday, 30 April 2021
Personal Insolvency (Amendment) Bill 2020: Report and Final Stages
I am very conscious of what Senator McDowell has said about not pushing his amendment and the basis for that. I know that the amendment is well intentioned but I feel that it would be appropriate to mention my concern. To pass this amendment would be to put on a statutory basis a need for the debtor to engage with the lender before ever going to a personal insolvency practitioner or to seek the independent advice that comes with that process. All of the legislative framework behind this Bill that has led us to this point has been put in place to facilitate a circumstance where debtors are, invariably, in dire circumstances. Sometimes when considering insolvency legislation there is a danger that we think insolvency is an easy way out or it can be perceived as an easy way out. I do not think that anybody who has been through the process would think that, nor should anyone be under the misapprehension that bankruptcy, insolvency or whatever term one wants to use is in any way an easy solution to a very difficult problem.
My understanding of all of this legislation is that it is designed to aid people who are in a dire circumstance and seek to get out of it. One of the fantastic measures that has been put in place by the Government is the existence of personal insolvency practitioners. They are people who are independent from the creditors in this matter, independent from the banks and who offer independent advice to people in a dire circumstance. I would have a difficulty with the notion that debtors would be statutorily obliged to engage with the banks at a time when they are very vulnerable, and when there is a real danger that banks can put pressure on them that may not be helpful in this situation. We know that the banks prefer the mortgage arrears resolution process as it suits their purposes better.One of the small victories, if I can put it that way, or one of the small safeguards that is in place for the person who is in a debt hole, where he or she almost cannot see the way out, is that he or she can turn to somebody who can give that person that impartial and independent advice to help him or her find their way out of that hole and to see the light at the end of the tunnel, which invariably will be difficult in any event. I feel that if we were to pass this amendment, it would redress that balance in the wrong direction. It would mean the debtor, who is already in a difficult position, vulnerable and subject to huge pressure, would now be obliged to go to his or her creditor and engage with them at a point when he or she is very vulnerable in the process. I think the legislation is saying the debtor should be turning to an independent adviser who can give him or her impartial advice on how he or she can find his or her way out of the situation he or she has got into. That is why, in all the circumstances we should be providing a clear path for people in difficulty to a personal insolvency practitioner who can help advise them in an impartial way towards finding a way out of their debt.