Personal Insolvency Bill

I welcome the introduction of this broad and comprehensive Bill and I want to thank the Minister, his officials and also the members of the Justice Committee for their painstaking work on it.

This is a complex and radical reform of our bankruptcy laws and forms one part of the many solutions that we are working on to deal with the problems of unsustainable mortgage and personal debt that affects households across the country and acts as a drag on the domestic economy.

Families and businesses are struggling with unsustainable debts and when the proposals in this law start working it will help a large number of people.

It is another major step towards fixing the problems this country faces.

The Government is delivering across a broad range of measures – renegotiating the bank debt, yesterday’s Stimulus Package investing in key infrastructure, the Action Plan on Jobs that has brought in measures such as the Credit Guarantee Scheme, Overhauling the HSE, delivering on the Croke Park agreement and setting up the Constitutional Convention.

All of these measures add up towards building confidence in our economy, Society and public services.

My Priority, and the Labour Party’s priority is keeping families in their home; and we are delivering on this commitment.

However it must be remembered that all of the provisions in this Bill have consequences for the people concerned and are not to be entered into lightly.

On the contents of this Bill I would be very concerned that a 5 year review of the measures is far too long. I would ask the Minister to seriously consider reviewing the entire package within two years to ensure that it is working as intended and that people are seeing a benefit – I know he changed the review of the Personal Insovlency Agreements (PIAs) from 10 years to 5 years

But it is safe to say that if the Debt Relief Notices, Debt Settlement Arrangements and Personal Insolvency Agreements are not working in two years, they won’t be working in 5 years. All the provisions should be examined at 5 years and not just the PIA’s.

In relation to Debt Relief Notice I also have specific concerns.

MABS have done excellent work in this area for many years, ploughing a lonely furrow with FLAC, helping people with unsustainable debts

The limit of €20,000 is too low, and should be increased to at least €30,000 if not €50,000. FLAC have published some excellent proposals on other specific issues related to Debt Relief Notices and I would ask the Minister to consider them carefully.

It does not make sense to push a lot of people who are already dealing with MABS and have debts above €20,000 into seeking a debt settlement agreement where they would have to engage with a personal insolvency practitioner (a PIP), one thing that can be said for this Bill is that it has been very good for the acronym industry.

MABS have a lot of experience in this area of managing small but unsustainable debts and have a national infrastructure in place

People trust MABS and it has a long record in the community.
This shouldn’t be about redesigning the wheel. We know MABS works.
Again, I would ask the Minister to look at this in Committee stage.
Finally, I also have serious concerns about the regulation of the personal insolvency practitioners (PIPS) and the way they will operate and how they will set fees.

It is not enough just for the Minister to delegate a person to regulate Personal Insolvency Practitioners (PIPs) and this area must be addressed at committee.

While doing this, I believe the regulation of debt management and debt collection companies should also be addressed in this Bill

In conclusion I commend the Minister for his excellent work on this long overdue Bill, and I look forward to this package of laws passing the house