Written answers

Thursday, 28 January 2010

Department of Finance

Personal Debt Management

5:00 pm

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)
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Question 43: To ask the Minister for Finance the work that has been completed in view of the revised Programme for Government; the new initiatives that will be announced in relation to helping persons with personal debt management problems and helping households who find themselves in mortgage arrears; and if he will make a statement on the matter. [4256/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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There have been a number of developments relating to the Government's commitments in the renewed Programme for Government on protecting the family home and helping those in debt. I particularly refer to the recent Government decisions on matters relating to indebtedness, mortgage arrears, personal debt management and enforcement. I approved the establishment of an interdepartmental mortgage arrears review group, chaired by my Department, for the purpose of collecting information and examining options, including initiatives in other jurisdictions, in relation to mortgage arrears and repossessions. This group has met on a number of occasions. Work has commenced on bringing forward options for dealing with these matters. In addition, in my budget speech in December, the Government refocused mortgage interest relief on those who bought their homes at the peak of the market, many of whom find themselves in negative equity. A home owner whose entitlement to mortgage interest relief would have expired in 2010 or after will now continue to receive it up to the end of 2017. The Deputy will be aware of other supports in place, including the code of conduct on mortgage arrears, the mortgage interest subsidy scheme and the services provided by the Money Advice Budgeting Service, all of which I have spoken about extensively in this House over recent months. Since my budget speech, I have written to the Financial Regulator to ask that consideration be given to extending the moratorium on mortgage arrears from six months to 12 months for all mortgage lenders.

The Law Reform Commission's consultation paper on personal debt management and debt enforcement, which was published in September 2009, contains an extensive list of provisional recommendations for reform of the law on personal debt that includes provision for a system of non-judicial debt settlement. The Commission has indicated that the date for completion of submissions on its paper is the end of January 2010. It is aiming to have its Final Report available by end of August 2010. The Government has also approved the establishment of an interdepartmental working group on personal debt management and enforcement, chaired by the Department of Justice, Equality and Law Reform to consider the commitment under "Helping those in Debt" envisaged in the renewed Programme for Government. In addition, the working group will agree a plan for implementation, where appropriate, of the Law Reform Commission's recommendations, assist in the development of a coherent and comprehensive administrative and legislative response to the issues arising, and determine those administrative and legislative measures that can be implemented in a cost efficient manner for early effective results. The Enforcement of Court Orders (Amendment) Act 2009, provides that certain safeguards will apply to the provisions under which a court may hear an application or grant an imprisonment order against a debtor who has failed to comply with an instalment order. The Act ensures that the court will not imprison the debtor unless it is satisfied that he has the means to pay and may also postpone the execution of an imprisonment order until such time as it thinks just. In addition, the court will inform a debtor of the risk of imprisonment and of his entitlement to apply for legal aid. The Act gives the court a clear power to vary the terms of an order to pay by instalments or alternatively to refer the parties for mediation.

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