Thursday, 21 June 2012
Department of Justice, Equality and Defence
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 and will include, critically, the introduction of automatic discharge from bankruptcy, subject to certain conditions, after 3 years in place of the current 12 years.
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.
The Personal Insolvency Bill is currently being drafted by my Department in cooperation with the Office of the Attorney General and Parliamentary Counsel. I can assure the Deputy that the Bill remains a legislative priority for the Government and the revised time frame for publication of the Bill is now the end of June with the strong intention to commence Second stage in the Dáil prior to the Summer recess to facilitate early passage of the legislation through the Oireachtas in the Autumn session.