Patrick Nulty (Dublin West, Labour)
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Question 104: To ask the Minister for Justice and Equality if he will bring forward legislation to ensure that it is compulsory for banks to engage with debt resolution processes in relation to distressed household mortgage debt; and if he will make a statement on the matter. [28710/12]

Alan Shatter (Dublin South, Fine Gael)
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I would refer the Deputy to my reply to Question No. 353 of 7 February, 2012, which was as follows:

"The reform of personal insolvency law, the Heads of Bill which I have published, will involve the introduction of three new non-judicial debt settlement systems, subject to relevant conditions in each case. These are as follows:

· A Debt Relief Certificate to allow for the full write-off of qualifying unsecured debt up to €20,000, after a one-year moratorium period for debtors with "no assets – no income";

· a Debt Settlement Arrangement for the agreed settlement of unsecured debt of €20,001 and over with two or more creditors;

· a Personal Insolvency Arrangement for the agreed settlement of both secured and unsecured debt of €20,001 to €3 million with one or more creditors.

The Personal Insolvency Bill will also continue the reform of the Bankruptcy Act 1988, begun in the Civil Law (Miscellaneous Provisions) Act 2011 will include, critically, the introduction of automatic discharge from bankruptcy, subject to certain conditions, after 3 years in place of the current 12 years.

It is not for me to speculate as to the future conduct of any of the participants in an insolvency process. However, I am of the view that new personal insolvency laws, including the bankruptcy law reform, should provide a significant incentive for financial institutions to develop and implement realistic agreements to manage or settle debt with their customers. Such agreements should in time become the norm as the most sensible and cost-effective arrangements, particularly where the issue is one of dealing with repayment difficulties for a single major debt, secured or otherwise. These agreements could include measures to address mortgage arrears."

I have nothing further to add to that response.