Thursday, 17 December 2015
Bankruptcy (Amendment) Bill 2015: Committee and Remaining Stages
I noted the Minister of State's response on the transitional periods but I am no more enlightened than was the case when I asked the question. He stated he is satisfied that the transitional period will work smoothly. The specific question I asked relates to the approximately 1,000 people who have already been in bankruptcy from more than 12 months. As I understand it, they will become eligible to be discharged six months after the Bill comes into force. Will they all become eligible on that date and will the Insolvency Service of Ireland then be obliged to work through each of the individual cases and be satisfied that the bankruptcy is appropriate and that they should not be extended to a longer time limit or will it start working immediately after the Bill is passed and use that six-month period to deal with people, in chronological order perhaps, starting with those who have been in the process the longest and start letting people go on a week by week basis rather than ensuring that all cases fall due on the same date?
I have a question on the same point. It is my understanding, and perhaps the Minister will put me right on this, that the purpose of the six months was to allow the official assignee to determine whether there was, in fact, any reason the bankruptcy term should be extended, in other words whether there was any hiding of assets or fraud. My understanding of the six-month period is that it will simply be to allow the assignee to determine whether the bankrupt should be discharged.
I reiterate the point that under the transitional provisions, assuming there are no grounds for extension an existing bankruptcy which was due to terminate three years after adjudication, if it is already due to terminate less than six months after the commencement date, will terminate on its due date. Otherwise, it will terminate one year after adjudication or six months after commencement if that is the later date.
Will the Minister of State to confirm, as Senator Hayden outlined, that the six months will be used to go through the files so the body of work has been done during the transitional period? Will the six months being used for this purpose, so that in six months time some people will be let go on day one, day two and day three? With respect, it has taken a lot of tick-tacking between the Minister of State and the officials for him to understand the position.
I have just come to make this comment. However belatedly, I welcome the Bill and, as others have done, I commend Deputy Willie Penrose on his initiative in pushing this issue. However, it is a sad reflection on this Administration that it has taken until the dying days of the current Oireachtas for it to be introduced. Many people in the House, particularly on this side, argued from the time the Government came into office that there was a blatant need to address the position regarding discharge from bankruptcy, which then stood at 12 years. The neighbouring island addressed it with a one-year term but we were still at 12. It took the former Minister, Deputy Shatter, three years to bring it to the House before he was sacked. When he did come forward with legislation, it was inadequate and only made provision to reduce the term to three years.We argued at the time that it should be reduced to one year. I recall making the point that we were facing unprecedented economic circumstances. I heard people criticise those who got into financial difficulties. Obviously, over-leveraging was the cause of many of our problems but there was tremendous economic growth during the period that led to it. The one thing this country now needs is investment and risk-takers. It is simply not good enough that all the cards were given to the banks in regard to this. Nothing has been done about insolvency. We introduced insolvency legislation, which was highlighted here as manifestly inadequate in that power of veto was given to the banks in respect of our proposals. Of course, we see that it has not functioned at all in the manner in which everybody in these Houses would have liked.
In the current economic circumstances, a bankruptcy term of one year is appropriate before one is discharged. In normal economic circumstances, one year may well be too short. The term of one year is needed for an interim period but, once the economy is stabilised and credit is flowing in the normal way, unlike at present, a three-year term should be considered as the optimum. However the proposed period is definitely needed and I commend those concerned on its introduction, however belatedly. I give no credit to the Government but to one Member of the Houses, Deputy Willie Penrose, for producing the Bill. The Bill has forced us to consider this issue and it shows that Private Members' efforts do work effectively, certainly in this instance.