Personal Insolvency Bil 2012: From the Seanad (Resumed)
The Dáil went into Committee to resume consideration of Seanad amendment No. 2:
Section 2: In page 11, subsection (1), between lines 6 and 7, to insert the following:
" "electronic means" includes electrical, digital, magnetic, optical, electromagnetic, biometric and photonic means of transmission of data and other forms of related technology by means of which data is transmitted;".
Seanad amendment agreed to.
Acting Chairman (Deputy Bernard Durkan)
Seanad amendments Nos. 3, 26, 27, 42, 44, 62, 64, 75, 76, 79, 116, 119, 128 and 131 are related and may be discussed together.
Seanad amendment No. 3:
Section 2: In page 11, subsection (1), between lines 7 and 8, to insert the following:
“ “excludable debt”, in relation to a debtor, means any:
(a) liability of the debtor arising out of any tax, duty, levy or other charge of a similar nature owed or payable to the State;
(b) amount payable by the debtor under the Local Government (Charges) Act 2009;
(c) amount payable by the debtor under the Local Government (Household Charge) Act 2011;
(d) liability of the debtor arising out of any rates due to the local authority (within the meaning of the Local Government Act 2001);
(e) debt or liability of the debtor in respect of moneys advanced to the debtor by the Health Service Executive under the Nursing Homes Support Scheme Act 2009;
(f) debt due by the debtor to any owners’ management company in respect of annual service charges under section 18 of the Multi-Unit Developments Act 2011 or contributions due under section 19 of that Act;
(g) debt or liability of the debtor arising under the Social Welfare Consolidation Act 2005;
“excluded debt”, in relation to a debtor, means any:
(a) liability of the debtor arising out of a domestic support order;
(b) liability of the debtor arising out of damages awarded by a court (or another competent authority) in respect of personal injuries or wrongful death arising from the tort of the debtor;
(c) debt or liability of the debtor arising from a loan (or forbearance of a loan) obtained through fraud, misappropriation, embezzlement or fraudulent breach of trust;
(d) debt or liability of the debtor arising by virtue of a court order made under the Proceeds of Crime Acts 1996 and 2005 or by virtue of a fine ordered to be paid by a court in respect of a criminal offence;”.
Seanad amendment agreed to.
Acting Chairman (Deputy Bernard Durkan)
Seanad amendment No. 4 has already been discussed with Seanad amendment No. 1.
Seanad amendment No. 4:
Section 2: In page 11, subsection (1), between lines 7 and 8, to insert the following:
“ “insolvency arrangement” means a Debt Relief Notice, Debt Settlement Arrangement or a Personal Insolvency Arrangement;”.
Seanad amendment agreed to.
Acting Chairman (Deputy Bernard Durkan)
Seanad amendments Nos. 5, 33, 38, 60, 114, 160 and 192 are related and may be discussed together.
Seanad amendment No. 5:
Section 2: In page 11, subsection (1), between lines 34 and 35, to insert the following:
“ “relevant pension arrangement” means:
(a) a retirement benefits scheme, within the meaning of section 771 of the Taxes Consolidation Act 1997, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1 of Part 30 of that Act;
(b) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784 of the Taxes Consolidation Act 1997;
(c) a PRSA contract, within the meaning of section 787A of the Taxes Consolidation Act 1997, in respect of a PRSA product, within the meaning of that section;
(d) a qualifying overseas pension plan within the meaning of section 787M of the Taxes Consolidation Act 1997;
(e) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004;
(f) a statutory scheme, within the meaning of section 770(1) of the Taxes Consolidation Act 1997, other than a public service pension scheme referred to in paragraph (e);
(g) such other pension arrangement as may be prescribed by the Minister, following consultation with the Ministers for Finance, Social Protection and Public Expenditure and Reform;”.
Seanad amendment agreed to.
Seanad amendments Nos. 6, 134, 135, 136 and 176 are related and will be discussed together.
Seanad amendment No. 6:
Section 2: In page 11, subsection (1), lines 36 and 37, to delete “security in or over property of the debtor” and substitute the following:
“security (other than a guarantee or pledge referred to in section 35(8) of the Credit Union Act 1997) in or over property of the debtor”.
Seanad amendment agreed to.
Seanad amendment No. 7:
Section 2: In page 12, subsection (1), to delete lines 10 to 15 and substitute the following
“ “specified creditor”, in relation to a protective certificate, means a person specified in a protective certificate as being the person to whom a particular debt is owed;
“specified debt”, in relation to a protective certificate, means a debt that is specified in that protective certificate as being subject to that certificate;”.
Seanad amendment agreed to.
Seanad amendment No. 8:
Section 2: In page 12, subsection (1), line 17, to delete “and apart”.
Seanad amendment agreed to.
Seanad amendment No. 9:
Section 2: In page 12, subsection (2), to delete lines 46 to 48.
Seanad amendment agreed to.
Seanad amendments Nos. 10, 29, 36, 111 to 113, inclusive, and 157 to 159, inclusive, are related and will be discussed together.
Seanad amendment No. 10:
Section 2: In page 13, between lines 2 and 3, to insert the following new subsections:
“(4) For the purposes of sections 24(2)(g)(i), 84(1)(g) and 116(1)(g), a debtor enters into a transaction with another person at an undervalue if he or she—
(a) makes a gift to, or otherwise enters into a transaction with, that other person on terms that provide for the debtor to receive no consideration, or
(b) enters into a transaction with that other person, the value of which, in money or money’s worth, is significantly greater than the value, in money or money’s worth, of the consideration provided by that other person.
(5) For the purposes of sections 24(2)(g)(ii), 84(1)(h) and 116(1)(h), a debtor gives a preference to another person if—
(a) the other person is a creditor of the debtor to whom a debt (other than an excluded debt or an excludable debt) is owed, or is a surety or guarantor for any such debt, and
(b) the debtor does any thing (including the granting of security), or suffers any thing to be done, which has the effect of putting that other person into a position which, in the event that the insolvency arrangement concerned is issued or comes into effect, as the case may be, would be better than the position in which that other person would have been if that thing had not been done or suffered to be done.”.
Seanad amendment agreed to.
Seanad amendments Nos. 11, 183, 230 to 242, inclusive and 245 are related and will be discussed together.
Seanad amendment No. 11:
Section 5: In page 13, lines 29 to 42, to delete subsections (2) and (3) and substitute the following:
“(2) The performance of the functions, and the exercise of the powers and jurisdiction, conferred by this Act on the Circuit Court shall be within the jurisdiction of the circuit of the Circuit Court in which—
(a) the debtor to whom an application under this Act relates is residing at the time of the making of the application or has resided within one year of the time of the making of the application, or
(b) the debtor to whom the application relates has a place of business at the time of the making of the application or has had a place of business within one year of the time of the making of the application.
(3) An application to the Circuit Court under this Act may be made—
(a) in such office of, or attached to, the Circuit Court within the circuit concerned,
(b) in such combined court office (within the meaning of section 14 of the Courts and Court Officers Act 2009) within the circuit concerned, or
(c) in such office of the Courts Service, within the circuit concerned, designated by the Courts Service for the purpose of this Act,
as may be prescribed by rules of court.”.
Seanad amendment agreed to.
Seanad amendment No. 12:
Section 8: In page 14, lines 10 to 17, to delete subsection (2) and substitute the following:
“(2) The Insolvency Service shall be a body corporate with perpetual succession and, without prejudice to the generality of the foregoing, may sue and be sued in its corporate name.”.
Seanad amendment agreed to.
Seanad amendment No. 13:
Section 8: In page 14, lines 35 to 39, to delete subsection (6) and substitute the following:
“(6) Any contract or instrument which, if entered into or executed by an individual, would not require to be under seal may be entered into or executed on behalf of the Insolvency Service by the Director or any person generally or specially authorised by the Director in that behalf.”.
Seanad amendment agreed to.
Seanad amendment No. 14:
Section 9: In page 15, subsection (1), between lines 12 and 13, to insert the following:
“(h) in accordance with Part 5—
(i) authorise individuals to carry on practice as personal insolvency practitioners,
(ii) supervise and regulate persons practising as personal insolvency practitioners,
(iii) perform such functions as are assigned to the Insolvency Service under that Part,
(i) prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses under section 23,
(j) arrange for the provision of such education and training, in relation to the performance by them of their functions under this Act, of approved intermediaries, personal insolvency practitioners and other persons, as it thinks fit,”.
Seanad amendment agreed to.
Seanad amendment No. 15:
Section 11: In page 15, lines 39 to 41, to delete paragraph (b) and substitute the following:
“(b) Subject to subsection (13),
the Director shall hold office for such period, not exceeding 5 years from the date of his or her appointment under this section, as may be determined by the Minister.”.
Seanad amendment agreed to.
Seanad amendment No. 16:
Section 11: In page 16, subsection (3), lines 14 and 15, to delete paragraph (a).
Seanad amendment agreed to.
Seanad amendment No. 17:
Section 11: In page 17, subsection (11), lines 1 and 2, to delete paragraph (a) and substitute the following:
“(a) dies, resigns or is removed from office, or”.
Seanad amendment agreed to.
Seanad amendment No. 18:
Section 11: In page 17, lines 17 to 19, to delete subsection (13) and substitute the following:
“(13) If, immediately before the establishment day, a person stands designated by the Minister under subsection (12)—
(a) the Minister shall appoint that person to be the first Director, and
(b) for the purposes of subsection (1)(b), the date of that person’s designation under subsection (12) shall be deemed to be the date of his or her appointment under this section.”.
Seanad amendment agreed to.
Seanad amendment No. 19:
Section 15: In page 19, lines 10 to 45 and in page 20, lines 1 to 21, to delete section 15 and substitute the following section:
15.—(1) Subject to this section, the Insolvency Service shall, in each year—
(a) prepare and adopt a business plan in respect of that year or of such other period as may be determined by the Minister, and
(b) submit the plan to the Minister.
(2) A business plan shall—
(a) indicate the activities of the Insolvency Service for the period to which the business plan relates,
(b) contain estimates of the number of employees of the Insolvency Service for the period and the business to which the plan relates, and
(c) accord with policies and objectives of the Minister and the Government as they relate to the functions of the Insolvency Service.
(3) In preparing the business plan, the Insolvency Service shall have regard to the strategic plan in operation at that time approved under section 14.
(4) The Insolvency Service shall submit to the Minister with a business plan a statement of its estimate of the income and expenditure relating to the plan that is consistent with the moneys estimated to be available to the Insolvency Service for the period to which the business plan relates.”.
Seanad amendment agreed to.
Seanad amendment No. 20:
Section 16: In page 21, subsection (6), lines 4 and 5, to delete “a report under this section,” and substitute “an annual report submitted under subsection (1),”.
Seanad amendment agreed to.
Seanad amendment No. 21:
Section 16: In page 21, between lines 9 and 10, to insert the following new subsection:
“(8) The Minister may, if he or she considers it appropriate to do so, cause a copy of a report submitted under subsection (3)—
(a) to be laid before each House of the Oireachtas, and
(b) where paragraph (a) has been complied with, published in such form and manner as he or she considers appropriate.”.
Seanad amendment agreed to.
Seanad amendment No. 22:
Section 19: In page 22, lines 22 to 27, to delete subsection (1) and substitute the following:
“(1) The Director shall, at the request in writing of a Committee, attend before it to give account for the general administration of the Insolvency Service as is required by the Committee and, for that purpose, shall provide the Committee with such information (including documents) as it specifies and as is in the possession of, or is available to, the Director.”.
Seanad amendment agreed to.
Seanad amendment No. 23, amendments Nos. 1 and 2 to Seanad amendment No. 23, and Seanad amendments Nos. 30, 34, 37, 77 and 129 are related and will be discussed together.
Seanad amendment No. 23:
Section 23: In page 24, before section 23, but in Part 2, to insert the following new section:
23.—(1) The Insolvency Service shall, for the purposes of sections 24, 60(4) and 95(4) and section 85D (as inserted by section 146) of the Bankruptcy Act 1988, prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses.
(2) Before issuing guidelines under subsection (1), the Insolvency Service shall consult with the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the Insolvency Service considers appropriate or as the Minister may direct.
(3) In preparing guidelines to be issued under subsection (1), the Insolvency Service shall have regard to—
(a) such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion as the Insolvency Service considers appropriate,
(b) such official statistics (within the meaning of the Statistics Act 1993) and surveys relating to household income and expenditure published by the Central Statistics Office as the Insolvency Service considers appropriate,
(c) the Consumer Price Index (All Items) published by the Central Statistics Office or any equivalent index published from time to time by that Office,
(d) such other information as the Insolvency Services considers appropriate for the performance of its functions under this section,
(e) differences in the size and composition of households, and the differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability, and
(f) the need to facilitate the social inclusion of debtors and their dependants, and their active participation in economic activity in the State.
(4) Guidelines issued under subsection (1) may provide examples of—
(a) expenses that may be allowed as reasonable living expenses, and
(b) expenses that may not be allowed as reasonable living expenses.
(5) The Insolvency Service shall make guidelines issued under subsection (1) available to members of the public on its website.
(6) Subject to subsection (7), the Insolvency Service shall issue guidelines under subsection (1) at intervals of such length, not being more than one year, as it considers appropriate.
(7) Failure by the Insolvency Service to comply with subsection (6) shall not render invalid for the purposes of this Act the guidelines most recently issued by it under this section.”.
Is amendment No. 23 agreed to?
No, Acting Chairman, I have tabled amendments to amendment No. 23.
The Acting Chairman was doing well.
Perhaps I should come in at this point. These amendments relate to the issue of reasonable living expenses. Amendment No 23 empowers the insolvency service to draw up guidelines in respect of a reasonable standard of living and reasonable living expenses for debtors. These guidelines are referenced in sections 24, 60(4), 95(4) and section 85D, as inserted by section 146 of the Bill, of the Bankruptcy Act 1988 and will be required for the information of all concerned in the new debt resolution processes.
The new section 23 sets out the principles and policies which will set the parameters for the guidelines on living expenses. The insolvency service will be required to consult the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the insolvency service considers appropriate or as the Minister may direct. Subsection (3) sets out the matters to which the insolvency service is required to have regard in the course of drawing up guidelines. These include poverty indicators as set out in Government publications on poverty and social inclusion, statistical information collated by the Central Statistics Office on household income and expenditure, and the consumer price index. The insolvency service may also consider other appropriate sources of information such as academic studies. A broad range of matters are required to be taken into consideration with regard to differences in the size and composition of households and the differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability. The insolvency service will be required to issue guidelines on reasonable expenses at intervals of no longer than one year. The insolvency service will work closely with the money advice and budgeting service, MABS, and other organisations with expertise and interest in seeking to devise broad, realistic and workable guidelines.
I ask Members to note a slight typographical correction to amendment No. 23, which is that the reference to "Insolvency Services" in subsection (3)(d) should read "Insolvency Service". I presume there is no difficulty in so amending it.
As for Deputy Mac Lochlainn's proposed amendments, the new section 23 was amended on Report Stage in the Seanad to take account of suggestions from Senators that the insolvency service also should have regard to other information or research sources such as academic studies when compiling the guidelines on reasonable standards of living and reasonable living expenses for debtors. I was happy to take on board this suggestion and have reflected this in the provisions of subsection (3)(d). However, it would not be appropriate to refer in primary legislation to an individual study or publication and therefore I do not propose to accept the Deputies proposed amendment to subsection (3)(a).
In respect of the proposed amendment to subsection (3)(e), I am satisfied that the existing provisions of the new section 23 are sufficiently broad to allow for differences in geographical location to be taken into account in the preparation of the guidelines where necessary - this was a provision that was introduced during the debate in the Seanad - and to the extent it is possible to so do. I should mention that each of the three new debt resolution processes provided for in the Bill requires the specific circumstances of the debtor to be taken into account and geographic location will of course be one such factor to be considered.
Amendment No. 30 refines the provisions of section 24(5) to better set out how "net disposable income" is to be calculated in the context of an application for a debt relief notice. Amendments Nos. 34 and 37 propose to amend section 24(7) and 24(14) to include a specific reference to the guidelines in regard to reasonable living expenses, which are to be issued under the new section 23. Amendment No. 77 proposes to replace section 60(4) with new text that takes into account the new provisions provided in section 23 in regard to reasonable living expenses in respect of the debt settlement arrangement process. Amendment No. 129 proposes a corresponding amendment to section 95, which applies to personal insolvency arrangements. I think that addresses all of the various amendments, including those tabled by Deputy Mac Lochlainn, that fall under this particular group.
I move amendment No. 1 to Seanad amendment No. 23:
In subsection (3)(a), after “inclusion” to insert “, and those articulated in the Consensual Budgeting Standards mechanism, and other mechanisms to assess relative income poverty”.
In respect of the amendments to which the Minister has referred, Sinn Féin welcomes that the Government took on board its proposals to ensure guidelines are produced that outline what exactly constitutes a reasonable standard of living. This is essential to ensure people are not driven into poverty. A consensual budgeting standards mechanism aims to develop a standard that is rooted in social consensus about goods and services that everyone can afford. The Vincentian Partnership for Social Justice has used this in much of its research and the methodology itself works using focus groups of people from differing socioeconomic backgrounds to identify the actual expenditure choices and judgments that are made by people in real life as well as how they manage their money. The mechanism establishes the cost of a minimum essential standard of living across lifecycles and covers a broad range of age groups, while also providing a more comprehensive picture of the needs of groups such as single adults of working age living alone, etc.
Further to this, Sinn Féin also is calling for the insolvency service to examine geographic locations. Cost of living will vary depending on location and those who live in rural areas with no access to public transport will find it more difficult to get to work, bring children to school and so on in respect of transport costs. Sinn Féin welcomes that the Minister has defined more clearly what constitutes a reasonable standard of living. However, I ask him to consider the two amendments I have tabled. They complement what the Minister has done in this regard and I ask him to reconsider them.
I have one brief comment to make. Can the Minister confirm that when the insolvency service goes about drawing up its view of what constitutes reasonable living expenses, the consultation process will be open to the public? I note the Minister referred to other such bodies. Will the public in general be afforded an opportunity in this regard? In other words, will a public notice be published calling for submissions from the public, as well as the plethora of organisations that exist? While organisations such as MABS are an integral part of this legislation, will other organisations be afforded an opportunity to partake in the consultation process? How often will that be updated? Will it be annual, biennial or every three years?
The legislation envisages it as an annual review of what are reasonable expenses. The reality is it will be open to the insolvency service to consult as it deems appropriate and to consider a range of reports and publications that address this issue, as well as consulting with particular Departments. I do not expect it will be appropriate that on an annual basis the insolvency service will engage in some major public consultative process. It must have regard to all the expertise and statistical and financial information available.
When it comes to reasonable living expenses, guidelines will ultimately be published. In dealing with the individual circumstances of a seriously indebted person, the arrangement put in place will depend on particular issues relevant to the individual that must be taken into account. There will not be a set formula resulting in a set sum as applicable to every individual. There will be much variance in that regard.
I have no doubt the service will have regard to the expertise of the Money Advice and Budgeting Service and the manner in which it approaches this issue. I do not envisage an annual public consultative process but the director of the insolvency service would have sufficient expertise to engage in this process. When the guidelines are published, the service will be the body to which each non-judicial debt settlement will be furnished for oversight essentially to sign off on to ensure issues are being dealt with appropriately. When it comes to experience, I am sure the service will have insight into what arrangements are put in place with regard to the expenditure of different people. I expect that would feed into any annual review of reasonable living expenses. It will deal with real people in real debt in the context of a real debt settlement arrangement. Over a period, the service will develop its internal expertise in the area and may well identify issues that repeatedly arise that may not be covered with the first set of published guidelines. There is adequate discretion invested in the insolvency service to ensure that in putting these guidelines on reasonable living expenses in place, it will have available the maximum information.
For the reasons I previously outlined, I cannot accept Deputy Mac Lochlainn's amendments. We have added substantially to the provisions of the Bill as originally published. I am of the view that these additions cover everything about which Deputy Mac Lochlainn is anxious as it is open to the agency to access any source material that is of assistance in addressing the issues. In the circumstances I cannot accept the amendments being tabled.
Amendment No. 1 to Seanad amendment No. 23 put and declared lost.
I move amendment No. 2 to Seanad amendment No. 23:
In subsection (3)(e), after “households,” to insert “their geographic locations, ability to access services”.
Amendment No. 2 to Seanad amendment No. 23 put and declared lost.
Seanad amendment agreed to.
Seanad amendment No. 24:
Section 23: In page 24, before section 23, but in Part 2, to insert the following new section:
24.—Nothing in this Act shall be construed as preventing the Insolvency Service, in the performance of its functions under this Act, from sending or receiving documents or other information, or otherwise communicating, by electronic means.”.
Seanad amendment agreed to.
Seanad amendments Nos. 25, 28, 31, amendment No. 1 to 31, 32, amendment No. 1 to 32, 35, 39, 43 and 45 to 52, inclusive, are related and will be discussed together by agreement. Is that agreed? Agreed.
Seanad amendment No. 25:
Section 23: In page 24, to delete lines 27 to 31 and substitute the following:
“ “Debt Relief Notice process” in relation to a debtor, means the process that commences with the submission of a written statement by the debtor under section 25(1) and which concludes, as the case may be, when—
(a) the debtor’s application for a Debt Relief Notice is withdrawn, deemed to be withdrawn or refused, in accordance with this Chapter, or
(b) the Debt Relief Notice issued in relation to that debtor ceases to have effect in accordance with this Chapter;”.
Seanad amendment agreed to.
Seanad amendment No. 26:
Section 23: In page 24, to delete lines 32 to 41 and in page 25, to delete lines 1 to 16.
Seanad amendment agreed to.
Seanad amendment No. 27:
Section 23:
In page 25, to delete lines 31 to 33 and substitute the following:
“(b) subject to sections 32(9) and 43, may include a secured debt, and
(c) does not include an excludable debt, unless it is a permitted debt;”.
Seanad amendment agreed to.
Seanad amendment No. 28:
Section 24: In page 26, subsection (2), line 24, to delete paragraph (f).
Seanad amendment agreed to.
Seanad amendment No. 29:
Section 24: In page 26, lines 25 to 29, to delete paragraph (g) and substitute the following:
“(g) has not, during the period of 2 years ending on the application date—
(i) entered into a transaction with a person at an undervalue that has materially contributed to the debtor’s inability to pay his or her debts (other than any debts due to the person with whom the debtor entered the transaction at an undervalue), or
(ii) given a preference to a person that has had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference);”.
Seanad amendment agreed to.
Seanad amendment No. 30:
Section 24: In page 26, line 41 and in page 27, lines 1 to 11, to delete subsection (5) and substitute the following:
“(5) For the purposes of subsection (2)(b)—
(a) “net disposable income” means the income available to a debtor, calculated in accordance with paragraph (b), less the deductions referred to in paragraph (c),
(b) the following, in relation to a debtor, shall be taken into account in calculating his or her income—
(i) his or her salary or wages,
(ii) the welfare benefits (other than child benefit) of which he or she is in receipt,
(iii) his or her income from a pension,
(iv) contributions from other household members, and
(v) any other income available to him or her,
and
(c) the following (where applicable), in relation to a debtor, shall be deducted from the sum calculated under paragraph (b):
(i) his or her reasonable living expenses;
(ii) income tax payable by him or her;
(iii) social insurance contributions payable by him or her;
(iv) payments made by him or her in respect of excluded debts;
(v) payments made by him or her in respect of excludable debts that are not permitted debts;
(vi) such other levies and charges on the specified debtor’s income as may be prescribed.”.
Seanad amendment agreed to.
Seanad amendment No. 31:
Section 24: In page 27, subsection (6), between lines 31 and 32, to insert the following:
“(ii) one item of personal jewellery to a value not exceeding €750 or such other value as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a);”.
I move amendment No. 1 to Seanad amendment No. 31:
In line 1, to delete “€750” and substitute “€1,500”.
I am sure Deputy Michael McGrath would like to speak to this as well as he has pressed the issue throughout the debate. This deals with the item of ceremonial importance. There was mention of "bazookas" when we debated what would be an appropriate amount for a valuation in this regard. In fairness, I appreciate that the Minister has come some way, although there may be many women out there very aggrieved at the valuation of €750. The amendment would increase this to €1,500, which is a more realistic valuation for the average engagement or wedding ring over the past decade. I have determined this from consultation with people about the matter. Will the Minister consider the matter further, although I appreciate that he has come some distance? Nevertheless, €750 is not a realistic valuation for the typical item of jewellery of ceremonial importance.
It is an important matter, although there has been a bit of fun with this in the media. We must complete a Bill that strikes a balance between satisfying those who are owed money and not humiliating those who are unfortunate enough not to be able to repay debts. To leave a provision for a person's wedding ring to be taken from that person as part of the process would lead to humiliation. We must get to a valuation that is more realistic in reflecting the average value out there and I argue that €1,500 is much closer to that than €750.
I will deal with all this group of amendments, beginning with Seanad amendment No. 25. They provide for miscellaneous amendments to Chapter 1 of Part 3, which deals with the debt relief notice process. Seanad amendment No. 25 makes clear the debt relief notice process concludes when the debtor's application for debt relief notice is withdrawn, deemed to be withdrawn or refused or when the debt relief notice issued with regard to the debtor ceases to have effect. The text as currently presented in the Bill is not sufficiently clear and requires further refinement for the avoidance of doubt.
Seanad amendment No. 28 proposes the deletion of paragraph (f) of section 24(2). This deletion arises as a consequence of Seanad amendment No. 35, which proposes the deletion of section 24(8), regarding the treatment of goods on hire purchase in the context of the debt relief notice process. Having considered the comments made in the Seanad on the matter, as well as comments from relevant organisations, and having consulted with the Parliamentary Counsel, I have decided to remove the provision from the Bill to offer greater flexibility to debtors.
I am advised by Parliamentary Counsel that the matter can be left to the provisions of the Consumer Credit Act 1995 and there is no requirement for an explicit provision in the Bill.
Amendment No. 31 is in response to concerns raised by Deputies and Senators on items of personal jewellery. Deputies will be aware that setting a value for such items is difficult and invidious to a degree. I am now providing an exemption from the asset test of €750 for one item of personal jewellery, provided the application does not seek to settle the purchase cost of the item as a qualifying debt. The Minister may, by regulation, review the amount of the value of the item.
I listened to Deputy Mac Lochlainn's contribution on this matter, on which I recall there was an inordinate focus in the House previously. I note this particular issue attracted the attention of Deputy Healy-Rae who has not exactly been engaged in the heavy lifting in the discussion of the details of the legislation. It is, however, an issue that is always good for a headline. No matter what figure was included in the Bill, Deputies would have tried to raise it. I am sure Deputy Niall Collins will correct me if I am wrong but it is my recollection that it was in an exchange with him or his colleague, Deputy Calleary, that a figure of €500 was suggested to me.
Deputy Stephen Donnelly suggested the figure of €500.
Somebody suggested a figure of €500. We must remember that what we are doing under the debt relief notice is allowing an individual to have €20,000 of debt written off over a period on the basis that he or she has very limited means and is incapable of paying his or her debts. I remind Deputies again that the creditors may be the local shop which, to remain open, depends on people paying their debts, the local credit union whose members, to maintain the financial viability of the credit union, require that those who borrow money pay their debts, or a local self-employed painter and decorator who did work on someone's home for two or three weeks and may be dependent on getting paid for the work he has done to feed his spouse and children. Let us be realistic about this. One cannot expect individuals who are genuinely owed money and may be placed in financial difficulty if a series of other individuals do not pay to them what they are owed for the supply of services or products to regard as acceptable that the individuals in question are permitted to retain items of substantial value. What we are doing in this area is a good deal more considerate of debtors than what is done in other jurisdictions. Deputies should be clear that no such exemption exists in any other jurisdictions. We have provided an exemption for a single item of personal jewellery of €750 and I have no doubt that if I had inserted a value of €1,500, an amendment would have been tabled proposing a value of €3,000. I cannot go any further on the issue or accept the proposed amendment.
Amendment No. 32, like the previous amendment on jewellery, recalls our debates on the valuation of the exempt motor vehicle in section 24. I remind Deputies that the-----
I did not realise we were discussing a series of amendments.
I will put each amendment individually.
We are taking the amendments together. On the exempt motor vehicle, I believe a vehicle with a value of £1,000 is exempt under a similar debt mechanism in Northern Ireland. The relevant legislation was enacted in Northern Ireland in 2011 and Sinn Féin was part of the legislative process. We originally proposed a figure of €1,200 but I undertook to give consideration to Deputies' comments on the issue, including with regard to the safety of vehicles and a range of other matters. Having given the matter consideration, we have increased the value to €2,000. This refers to an exempt motor vehicle that is not included as part of a debtor's assets. It must be recalled that the debtor may keep the vehicle while having €20,000 of debt wiped out. There are some creditors who will regard it as entirely unreasonable that someone should retain a motor vehicle valued at €2,000 in circumstances where they will not be paid anything in the event that the debtor owes them €2,000. There has to be balance in this matter. The exemption is subject to the application not seeking to settle the purchase cost of the item as a qualifying debt. In other words, if I have a vehicle valued at €2,000 and I owe €1,800 on the vehicle, the vehicle cannot be made exempt from the debt process in circumstances where the person who sold the vehicle or funded its acquisition is left to hang and is not being paid. That is the exception and again the Minister may, by regulation, review the amount.
I do not propose to accept Deputy Mac Lochlainn's amendment, which proposes a value of €3,000. One could conclude that we are in some kind of bidding war on this issue. Deputies should remember that for every exemption, one is dealing with creditors who may be owed small but important sums of money. Where one is dealing with reasonable living expenses, a person who cannot have a vehicle cannot drive. The reason other jurisdictions do not provide for this type of exemption is that they take the view that a car is luxury if a person owes others money. It is a luxury not only in the context of retaining the car but also given all of the expenses that have to be incurred to keep it on the road, including petrol, car insurance and tax and maintenance costs. We are doing something here that many other jurisdictions do not do. In the circumstances, the Deputy's amendment proposing to increase the value of the car cannot be accepted.
Amendment No. 39 proposes to set out more clearly the information the debtor is required to provide to the approved intermediary in support-----
On a point of order, would it not be more practical to dispose of each amendment before moving onto the subsequent amendment?
The order of the House was that all of these amendments would be taken together because they are interrelated. Obviously, Deputy Mac Lochlainn should be entitled to speak on the issue related to the value of the car. It may be helpful, therefore, to allow me to complete my contribution on this series of amendments because there is a connectivity between them all. They have been grouped for this reason and also because it facilitates discussion rather than a piecemeal debate.
I was dealing with amendment No. 39 which proposes to set out more clearly the information the debtor is required to provide to the approved intermediary in support of his or her application for a debt relief notice. It also includes at paragraph (a)(iv) additional text which places a notice on the debtor to inform the approved intermediary as to what efforts the debtor has made to reach alternative repayment arrangements with creditors prior to seeking a full write-off in the debt relief notice. While this may not be of significant concern as such, it serves as a useful indicator and could lead to a current or future Money Advice and Budgeting Service client for a debt relief notice being potentially diverted into an acceptable repayment arrangement with creditors, thereby avoiding the process and some of its consequences. This approach would complement current MABS strengths and involvement in debt resolution.
Amendment No. 43 is a drafting amendment to require a debtor who applies for a debt relief notice to make a statutory declaration as to the completeness and accuracy of his or her prescribed financial statement.
Amendment No. 45 provides that an application for a debt relief notice may be withdrawn by the approved intermediary at any time prior to the issuing of a debt relief notice by the insolvency service under section 28. This potential situation is not currently addressed in this part of the Bill and is required for the avoidance of doubt.
Amendment No. 46 proposes the amendment of section 28 to address a lacuna in the existing text. The new text makes provision for circumstances where a debt relief notice application is referred to the insolvency service but the service is dissatisfied with the application. Subsection (1)(b) provides that in such cases the service is required to inform the approved intermediary.
Subsection (2) provides for circumstances in which the court refuses an application for a debt relief notice. Subsection (3) makes provision for the appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), to hold a hearing on the matter. Subsection (4) makes provision for the hearing not to be held in public unless the court decides otherwise. Subsection (5) requires the court to notify the insolvency service of its decision on the application.
Amendment No. 47 is a drafting amendment which amends the cross-referencing in regard to core notification arising from the new text in section 28. Amendments Nos. 48 and 49 are technical drafting amendments to improve the presentation of the Bill.
Amendment No. 50 provides for the replacement of the current subsections (3) and (4) in section 33. The amendment essentially improves the text by making clear how the debtor's income is to be calculated for potential repayment where there has been an increase in such income. It also takes account of the new provisions regarding excluded and excludable debts and how these are to be treated in this scenario.
Amendment No. 51 is a drafting amendment. The previous provision concerned in section 34 is now to be dealt with by a revised section 35 provided for by amendment No. 52, which improves the text of the existing section 35 with regard to the situation of the debt relief notice process when a possible payment to creditors becomes available. The primary change is to mirror the now possible inclusion of certain previously excluded debts in a debt relief notice. In recognition of that possibility, such creditors deemed to hold permitted debts, which are those excluded debts the creditors have agreed to include and write off, will receive priority over other creditors if some funds become available. Realistically, I do not expect such repayments will be a major feature of the debt relief notice process, given its nature and the likely economic position of applicants for a debt relief notice.
Amendment No. 1 to amendment No. 31, which we are discussing as part of this group, is in the name of Deputy Mac Lochlainn.
May I seek a clarification?
I call Deputies Niall Collins and Healy-Rae in that order.
Can the figures of €750 and €2,000 in respect of jewellery and vehicles, respectively, be revised upwards by ministerial order?
I raised my issue with the Minister previously. I appreciate from where he is coming when he refers to creditors, as I know what it is to be a creditor. Perhaps unlike him, my other work often entails my being owed money by people who find themselves in a position of being unable to pay. I can view the issue from both sides of the coin.
The figure is set too low. I appreciate the Minister's remarks to the effect that, regardless of what figure he decided on, be it €2,500 or €3,000, people would claim it was wrong. Sure, I may as well be talking to the wall.
I beg the Deputy's pardon.
I genuinely believe the figure the Minister has set is too low. There is a groundswell of opposition. People outside the Houses know which figure is being chosen and are unhappy with it. Anyone can run into financial difficulty in the current economic climate. Regarding the point on which Deputy Niall Collins sought clarification, it is good the figure can be raised at a future date, but I do not know why the Minister would not accede to the request to increase the figure to at least €1,500. Items became more expensive while times were good and people might have bought items with which they would not like to part. The flat rate figure set by the Minister in respect of personal jewellery is too low and should be increased.
I appreciate how he has moved on the question of vehicular transport. When I raised this issue previously, he missed my point. He believed I was referring to one type of vehicle when I mentioned "jeeps". Where I come from, a "jeep" is a work vehicle, not something that can be seen swanning around the suburbs of Dublin or taking children to school. There is a difference. The work vehicles are used by contractors and farmers. If they want to get their legs back under them, return to work and try to get to a better place after running into financial trouble, strong, suitable and sound vehicles are a basic necessity. These are not fancy or elaborate. They are ordinary, common work vehicles that any farmer, contractor or so on needs. They are not the type of vehicle that someone like the Minister might have. I hope he will take on board my opinions.
How does one follow that? Spot on. Deputy Healy-Rae has conveyed the difference between urban and rural mindsets.
I appreciate that the Minister has moved some ways and pushed the value of the item of ceremonial importance to €750. In fairness, he also pushed the vehicle's valuation to €2,000. I welcome this. He may believe we are being churlish in our amendments, but he knows the typical engagement ring purchased in the past decade would rarely have cost as little as €750. I appreciate that a Deputy provided him with a valuation. I was alarmed when I heard it.
I do not want the Minister to believe this is a token amendment. It is a practical measure that reflects the reality of the value of people's engagement and wedding rings. No one involved in the process wants to see legislation the practical interpretation of which permits someone's engagement ring to be taken. We will press the amendment if the Minister does not accept it. Clearly, the Government will win this debate, given the numbers in the House, but I ask the Minister to reflect on the question put to him by Deputy Niall Collins. There may be an opportunity to amend this measure at a later stage if he cannot do so today.
The second issue is that of the car valuation. The Minister used the term "luxury". I agree with Deputy Healy-Rae, in that having a vehicle in rural Ireland is no luxury. If one lives in rural parts of the Inishowen Peninsula or in north or west County Donegal, public transport will rarely pass one's way during the day. If one wants to have a job or participate in the life of the community in any meaningful way, one must have a car. I appreciate that the Minister has moved towards €2,000, as it is a step in the right direction.
The State benefits from VRT. Against all European directives, we choose to have a high VRT rate, increasing the cost of our cars. What one would get for £1,000 in the North differs greatly from what one would get for €1,200 in this State.
My amendment reflects reality. With all due respect, we are rural people and we know a basic car or vehicle, to take Deputy Healy-Rae's point on board, is necessary to survive in areas where the public transport system of many years is now absent. All the Minister needs to do is ask one of his rural colleagues what constitutes a basic car for the people in question.
I appreciate what the Minister has stated. A local business, credit union or so on will seek to strike a balance; no one wants people to be humiliated. The people under discussion are in financial hardship. Through this amendment, we want those in rural Ireland in particular to have the chance to return to the world of work.
Our amendments are practical and are not intended to disrespect the fact that the Minister has taken on board our points. I commend him in that regard, as he has not maintained a stubborn position. I appreciate the ring valuation came from an Opposition Member's recommendation. In the Minister's heart of hearts, though, he knows he probably has not gone far enough with either valuation. He may, however, insist on not accepting these amendments.
Will he at least offer an assurance that he will review these matters in the near future, in the context of his ministerial rights under the legislation?
I did not say that I regarded a car as a luxury. I merely observed that the view is taken in other jurisdictions that where a person is in serious debt and that debt is to be written off, it is not reasonable that the individual should continue to run a car. It is not merely the question of excluding the car as an asset of value; consideration is also given to all of the inherent expenses involved in keeping a car on the road.
Northern Ireland is as much a rural community as the Republic of Ireland, so we should not look in two opposite directions on exactly the same issue. Whatever the difference in vehicle registration tax as between the two jurisdictions, the Deputy cannot seriously suggest that a car valued at £1,000 in the North is of necessity far superior to any vehicle one might purchase for €2,000 in the Republic. The Deputy knows that is a nonsensical claim. In fact, a car valued at €2,000 in this State will invariably be in better condition than a car valued at only £1,000 in Northern Ireland. Moreover, the Deputy's party was satisfied with a valuation of £1,000 being included in the legislation enacted in the North.
It is the reality. In the context of insolvency legislation in Northern Ireland, there was no issue for Sinn Féin in fixing a threshold of £1,000 on the value of a vehicle which can be exempted from the asset base for the purpose of determining whether an individual will qualify for a debt resolution mechanism similar to our debt relief notice.
Bankruptcy is a different matter in the North, however, given that it applies for a much shorter period.
We are providing greater relief in the Republic for individuals who are in debt. In any case, no matter what figure I put on it, the Deputy would seek to cap it.
In regard to the jewellery issue, it was like pulling teeth when I asked Deputies opposite to indicate what value they had in mind. To use a good old Yiddish-American term, everybody looked at me and stayed schtum for quite a long time.
The Minister does not realise that we know he knows it all.
When the tooth was finally loosened and a member of the Opposition suggested a figure of €500, there was furious nodding in my direction from that side of the House.
There was not a single dissenter. Even Deputy Michael Healy-Rae did not dissent because he did not have a figure in mind himself.
I made my misgivings regarding this provision clear when we discussed it on Committee Stage. As I recall, I pointed out both in this and the other House that in practice, in the 30 or so instances of bankruptcy that are decided in this country every year, creditors do not ask about the bankrupt individual's wedding ring. It is not part of the conversation and is not perceived as an issue creditors would wish to address. In the case of a husband who becomes insolvent, for example, it is not the case that his wife's wedding ring will be brought into play. Where an individual becomes insolvent, his or her personal assets are normally part of the consideration, but I am not aware of the jewellery issue having created a problem for anybody in reality. This particular issue has grown legs because it is all very interesting and makes a great newspaper headline. I acceded to the wishes of Deputies to designate one item of personal jewellery - which does not have to be ceremonial - as exempt from the consideration of a person's assets. I continue to have misgivings that this measure might actually encourage creditors to seek valuations in future in circumstances where they would not heretofore have approached the issue at all. In other words, it is my concern that we are not necessarily travelling a route that will be helpful to individuals in serious debt who resort to this particular debt resolution mechanism.
To be clear, my view on this does not come from any ideological perspective, and I have huge sympathy for individuals who find themselves in serious debt. This legislation is about introducing mechanisms to assist people in debt to work their way through it and to facilitate that debt being written off. As it stands, there is no statutory mechanism whereby a person in debt can, without going into bankruptcy, have that debt or some portion of it written off. When this legislation is enacted, we will have, under the debt relief notice, the possibility of €20,000 of debt being written off within a short number of years, after which individuals can get on with their lives. Creditors, no matter how meritorious, will effectively be burnt in this situation. In fact, they may end up getting absolutely nothing while the debtor walks away. This will be of considerable assistance to people with very limited assets and income who made financial mistakes. It is important to bear in mind that not everybody is a victim here. Indeed some of those who benefit will have arrived in their predicament simply by spending money they did not have or spending it unwisely. As a consequence, creditors who might, from the best of motives, have given these people credit will get burnt. We must be balanced in this regard.
As I said, we have included, on the urging of Deputies opposite and their colleagues in the Seanad, a provision which exempts jewellery up to a particular value from being counted as an asset in the context of the debt relief notice mechanism. The measure has been deliberately designed, with provision for the amount to be amended by way of regulation, to ensure we can keep a watchful brief on how it works in practice. This was done for a series of reasons. It is important, for example, when financial limits are set in primary legislation, where it is appropriate to do so, that provision is made to deal with issues of inflation.
I cannot go any further than that on this issue. I reiterate my reservations regarding the inclusion of the measure. I remain of the view that in a broad range of circumstances in which people are in financial difficulty, creditors would not seek to pursue this issue at all. Unfortunately, however, it seems to be the only aspect of the legislation in which the media were interested. If a person has an item of personal jewellery worth hundreds of thousands of euro - before Deputy Healy-Rae shouts at me that nobody has such items of jewellery, I challenge him-----
Only somebody like the Minister.
I wish the Deputy would not be always so personal. It is not necessary to get a headline to be either abusive or personal. He, however, cannot resist taking that approach every time he comes into the House.
It was the Minister who got personal.
The Deputy had his opportunity to speak. He must remain silent while the Minister replies.
The Deputy cannot resist such outbursts because they might get him a headline.
The Minister started it and he knows he started it. If he cannot take it, he should not give it out.
This is not a parish pump. I ask the Deputy to have regard for the House.
It is unfortunate that we were having a serious debate in this House until Deputy Healy-Rae decided to pop up to address the jewellery issue. He has made no contribution of any description to the rest of the legislation.
The Minister is wrong again.
Nor has he contributed to any of the serious engagement which resulted in major amendments to the Bill. It is unfortunate that it is this particular issue, as opposed to the very substantial measures that are designed to be of genuine assistance to persons in debt, which catches a headline.
Returning to the car valuation, in the context of this issue not being addressed in certain jurisdictions and in the context of the value that is attached in similar circumstances in adjacent jurisdictions, I am of the view that increasing the threshold from €1,200 to €2,000 is appropriate. An increase of €3,000, however, is a step too far in the context of the balance that must be fairly struck in the interests of creditors. Again, this is an issue, because it can be dealt with by way of regulation, that is open to review. I do not want to be misunderstood in this regard.
I share the view that a car is a necessity depending on where one lives in this State. For some it is a necessity for social interaction and contact with family and friends, while for others it is essential to get to work and for taking their children to school. We have taken that into account, but there must be a balance. I cannot accept the amendments in the context of that balance.
Amendment No. 1 to Seanad amendment No. 31 put and declared lost.
Seanad amendment No. 31 agreed to.
Seanad amendment No. 32:
Section 24: In page 27, subsection (6)(c)(ii)(I), line 35, to delete “€1,200 or less” and substitute the following:
“€2,000 or less, or is worth such other amount as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a)”.
I move amendment No. 1 to Seanad amendment No. 32:
In line 1, to delete “€2,000” and substitute “€3,000”.
Seanad amendment No. 34:
Section 24: In page 28, subsection (7), lines 10 to 15, to delete paragraphs (a) to (c) and substitute the following:
“(a) the current liabilities of the debtor,
(b) the contingent and prospective liabilities of the debtor and (insofar as is ascertainable) the times at which such liabilities will become due for payment,
(c) the current and prospective assets and income of the debtor, and
(d) guidelines issued under section 23*.”.
Seanad amendment No. 39:
Section 25: In page 30, subsection (1), lines 15 to 17, to delete paragraph (a) and substitute the following:
“(a) such information as may be prescribed in relation to—
(i) his or her creditors,
(ii) his or her debts and other liabilities,
(iii) his or her assets, and
(iv) the efforts made by him or her to reach an alternative repayment arrangement with his or her creditors, and”.
Amendment No. 1 to Seanad amendment No. 32 put and declared lost.
Seanad amendment No. 32 agreed to.
Seanad amendment No. 33:
Section 24: In page 28, subsection (6), to delete lines 4 to 7 and substitute the following:
“(iv) any interest in or entitlement under a relevant pension arrangement unless subsection (14) applies.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 35:
Section 24: In page 28, lines 16 to 28, to delete subsection (8).
Seanad amendment agreed to.
Seanad amendment No. 36:
Section 24: In page 28, lines 29 to 47, and in page 29, lines 1 to 5, to delete subsections (9) and (10).
Seanad amendment agreed to.
Seanad amendment No. 37:
Section 24: In page 30, between lines 11 and 12, to insert the following subsection:
“(14) In determining what constitutes reasonable living expenses or a reasonable standard of living for the purposes of this section, regard shall be had to guidelines issued under section 23*.”.
Seanad amendment agreed to.
Seanad amendment No. 38:
Section 24: In page 30, between lines 11 and 12, to insert the following subsections:
“(14) Where this subsection applies and a debtor has an interest in or entitlement under a relevant pension arrangement which would, if the debtor performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income,
in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that debtor shall be considered as being in receipt of such income or amount of money.
(15) Subsection (14) applies where the debtor—
(a) is entitled at the date of the making of the application for a Debt Relief Notice,
(b) was entitled at any time before the date of the making of the application for a Debt Relief Notice, or
(c) will become entitled within 6 months of the date of the making of the application for a Debt Relief Notice,
to perform the act or exercise the option referred to in subsection (14).”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Acting Chairman (Deputy Bernard Durkan)
Seanad amendments Nos. 40, 41, 54, 55, 58, 59, 170 and 180 are related and may be discussed together.
Seanad amendment No. 40:
Section 25: In page 31, lines 28 to 46 and in page 32, lines 1 to 3, to delete subsections (9) and (10) and substitute the following:
“(9) Where an approved intermediary resigns from the role of approved intermediary as respects a debtor, he or she shall notify the Insolvency Service of that fact, which notification shall be accompanied by a statement of the reasons for his or her resignation.
(10) Where, at any time during the Debt Relief Notice process after the debtor has made the confirmation referred to in subsection (3), the approved intermediary concerned (“original approved intermediary”)—
(a) dies,
(b) becomes incapable, through ill-health or otherwise, of performing the functions of an approved intermediary as respects the debtor,
(c) resigns from the role of approved intermediary as respects the debtor, or
(d) is no longer entitled to perform the functions of an approved intermediary under this Act,
the debtor shall, as soon as practicable after becoming aware of that fact, appoint another approved intermediary to act as his or her approved intermediary for the purposes of this Chapter.
(11) (a) Where paragraph (a), (b) or (c) of subsection (10) applies, the debtor concerned shall, as soon as practicable, inform the Insolvency Service of that fact.
(b) Where an approved intermediary has been appointed under subsection (10), the approved intermediary shall, as soon as practicable, inform the Insolvency Service and the creditors concerned of that fact.”.
These amendments provide for situations where an approved intermediary or personal insolvency practitioner resigns or becomes unable to act, and a replacement intermediary or practitioner is appointed.
Amendment No. 40
improves the text of the provisions of section 25 dealing with situations where an approved intermediary resigns or otherwise becomes unavailable to continue acting as such for the debtor. Essentially, the required notifications to be made by the parties concerned are set out in a clearer fashion. Subsection (10) now provides that if an approved intermediary resigns from the role in respect of a debtor, the intermediary shall be required to notify the insolvency service. A replacement approved intermediary must inform the insolvency service of his or her appointment. I ask the House to note a slight correction of alignment in amendment No. 40, which is that in the new subsection (10), the text after paragraph (d) should be aligned to subsection level. That will be dealt with in the final printed form of the Bill.
Amendment No. 54
amends the existing provision so as to empower the insolvency service to
prescribe the criteria for authorisation of persons as authorised intermediaries.
Amendment No. 55 provides that the authorisation of a person to act as an approved intermediary may be withdrawn, as provided for in regulations, when they no longer meet the criteria for authorisation.
Amendment No. 58 replaces subsections (4) to (6) of section 46 with new text regarding notification and reporting responsibilities relating to the resignation and replacement of personal insolvency practitioners. These amendments are required to improve the overall presentation of the section for clarity and for consistency of approach with the amendments to section 25 regarding approved intermediaries.
Amendments Nos. 41, 59, 170 and 180 are
technical drafting amendments to further refine the text.
Seanad amendment No. 43:
Section 25: In page 32, subsection (2)(c), line 31, to delete “section 25;” and substitute the following:
“section 25 and a statutory declaration made by the debtor confirming that the statement is a complete and accurate statement of the debtor’s assets, liabilities, income and expenditure;”.
Seanad amendment No. 48:
Section 32: In page 37, subsection (1)(g), line 18, after “debtor,” to insert “other than a security agreement,”.
Seanad amendment No. 53:
Section 41: In page 42, subsection (4)(e), line 35, to delete “as the court thinks fit” and substitute “as it deems appropriate”.
Seanad amendment agreed to.
Seanad amendment No. 41:
Section 25: In page 32, subsection (11), lines 4 and 5, to delete “subsection (9)” and substitute “subsection (10)”.
Seanad amendment agreed to.
Seanad amendment No. 42:
Section 26: In page 32, before section 26, to insert the following new section:
26.—(1) A Debt Relief Notice shall be issued in respect of an excludable debt only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the issue of such a Debt Relief Notice.
(2) Where a debtor who wishes an application under section 26 to be made on his or her behalf wishes the Debt Relief Notice concerned to be issued in respect of an excludable debt, the approved intermediary concerned shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by—
(a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and
(b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the Debt Relief Notice being issued in respect of the debt.
(3) A creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(4) Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the issue of a Debt Relief Notice in respect of the debt concerned.
(5) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 44:
Section 25: In page 32, subsection (2)(d), to delete lines 34 to 37 and substitute the following:
“(i) the amount of each debt due to that creditor,
(ii) whether the creditor concerned is a secured creditor and, if so, the details of any security held in respect of the debt concerned, and
(iii) where the debt is an excludable debt, whether that debt is a permitted debt within the meaning of section 26;”.
Seanad amendment agreed to.
Seanad amendment No. 45:
Section 25: In page 33, between lines 26 and 27, to insert the following subsection:
“(5) An application under this section may be withdrawn by the approved intermediary at any time prior to the issue of a Debt Relief Notice under section 28.”.
Seanad amendment agreed to.
Seanad amendment No. 46:
Section 28: In page 34, lines 38 to 45 and in page 35, lines 1 to 8, to delete subsections (1) to (3) and substitute the following:
“28.—(1) Where the Insolvency Service, following its consideration under section 27—
(a) is satisfied that an application under section 26 is in order, it shall—
(i) issue a certificate to that effect,
(ii) furnish that certificate together with a copy of the application and supporting documentation to the appropriate court, and
(iii) notify the approved intermediary to that effect, and
(b) is not so satisfied, it shall notify the approved intermediary to that effect.
(2) Where the appropriate court receives the application and accompanying documentation pursuant to subsection (1)(a), it shall consider the application and documentation and, subject to subsection (3)—
(a) if satisfied that the criteria specified in section 24(2) have been satisfied, shall issue a Debt Relief Notice in respect of the debts specified in the application under section 26 which it is satisfied are qualifying debts, and
(b) if not so satisfied, shall refuse to issue a Debt Relief Notice.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the approved intermediary concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) The registrar of the appropriate court shall notify the Insolvency Service where the appropriate court—
(a) issues a Debt Relief Notice under this section,
(b) refuses an application under subsection (2)(b), or
(c) decides to hold a hearing referred to in subsection (3).”.
Seanad amendment agreed to.
Seanad amendment No. 47:
Section 30:
In page 35, subsection (1), line 21, to delete “section 28(3)” and substitute “section 28(5)(a)”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 49:
Section 32: In page 37, subsection (1)(g)(ii), lines 22 and 23, to delete “, or a forfeiture of a term,”.
Seanad amendment agreed to.
Seanad amendment No. 50:
Section 33:
In page 38, lines 29 to 35, to delete subsection (3) and substitute the following:
“(3) Subject to subsections (4) and (5), a specified debtor whose income increases by €400 or more per month during the supervision period concerned shall surrender to the Insolvency Service 50 per cent of that increase.
(4) The reference in subsection (3) to a specified debtor’s income is a reference to his or her income as stated in the information provided, or documents submitted by him or her, or on his or her behalf, under section 26, less the following deductions (where applicable):
(a) income tax;
(b) social insurance contributions;
(c) payments made by him or her in respect of excluded debts;
(d) payments made by him or her in respect of excludable debts that are not permitted debts;
(e) such other levies and charges on the specified debtor’s income as may be prescribed.”.
Seanad amendment agreed to.
Seanad amendment No. 51:
Section 34: In page 39, lines 13 and 14, to delete subsection (4).
Seanad amendment agreed to.
Seanad amendment No. 52:
Section 35:
In page 39, lines 15 to 31, to delete section 35 and substitute the following:
35.—(1) The Insolvency Service, on receipt of a sum under subsection (2) or (3) of section 33 or under section 34, shall deal with that sum in accordance with this section.
(2) On receipt of a sum referred to in subsection (1), the Insolvency Service shall, subject to subsection (3)—
(a) apportion that sum, on a pari passu basis, among the specified creditors to whom a specified qualifying debt that is a permitted debt is owed, and
(b) within one month of such receipt, transmit to each such specified creditor payment of the sum apportioned to that creditor under paragraph (a).
(3) Where, following a payment or payments to specified creditors under subsection (2) or subsection (4), as the case may be, all of the specified qualifying debts referred to in subsection (2) have been paid in full, the Insolvency Service shall, in relation to a sum referred to in subsection (1)—
(a) apportion that sum, on a pari passu basis, among the remaining specified creditors concerned, and
(b) within one month of such receipt, transmit to each such specified creditor payment of the sum apportioned to that creditor under paragraph (a).
(4) Where the Insolvency Service—
(a) has apportioned a sum to a specified creditor under subsection (2)(a) or (3)(a), as the case may be, and
(b) after reasonable efforts, is unable to locate that specified creditor,
it shall apportion the sum referred to in paragraph (a) among the specified creditors referred to in subsection (2)(a) or (3)(a), as the case may be, whom it has succeeded in locating and, within one month of doing so, shall transmit to each such specified creditor payment of the sum so apportioned.
(5) Where a specified qualifying debt is secured, the Insolvency Service, in apportioning a sum to the specified creditor concerned under subsection (2)(a), (3) (a) or (4), shall disregard the value of the security held by the specified creditor for that debt.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 54:
Section 44:
In page 44, subsection (5), line 9, to delete “The Minister may” and substitute the following:
“The Insolvency Service, with the consent of the Minister, may and, if directed by the Minister to do so and in accordance with the terms of the direction, shall, following consultation with any other person or body as the Insolvency Service thinks appropriate or as the Minister directs,”.
Seanad amendment agreed to.
Seanad amendment No. 55:
Section 44:
In page 44, between lines 16 and 17, to insert the following new subsection:
“(6) Regulations under subsection (5) may provide for the withdrawal of an authorisation of a person where he or she no longer meets the criteria for such an authorisation prescribed in those regulations.”.
Seanad amendment agreed to.
Amendments Nos. 56, 57, 61, 63, 65 to 67, inclusive, 117, 118, 120 to 122, inclusive, and 177 to 179, inclusive, are related and may be discussed together.
Seanad amendment No. 56:
Section 46:
In page 44, lines 29 to 35, to delete subsection (1) and substitute the following:
“46.—(1) A debtor to whom section 45 applies shall submit to a personal insolvency practitioner a written statement disclosing all of the debtor’s financial affairs, which statement shall include—
(a) such information as may be prescribed in relation to—
(i) his or her creditors,
(ii) his or her debts and other liabilities,
(iii) his or her assets, and
(iv) guarantees (if any) given by the debtor in respect of a debt of another person,
and
(b) such other financial information as may be prescribed.”.
These amendments address matters relating to an application for a protective certificate in the debt settlement arrangement and personal insolvency arrangement processes.
Amendment No. 56 substitutes the existing text of section 46(1) with new text regarding the information which the debtor is required to provide to the personal insolvency practitioner about his or her financial affairs. It also now includes a requirement for the disclosure of details of any guarantees given by the debtor. The amendment is intended to improve the clarity of the provision.
Amendment No. 57
is a technical drafting amendment to further refine the text to include a reference to the provision of the personal insolvency practitioner’s advice in writing.
The purpose of
Amendment No. 61
is to make clear that where the advice of a personal insolvency practitioner is that a debtor should not make a proposal for, or enter into, an arrangement, the personal insolvency practitioner is required to notify the insolvency service of that fact, and the appointment of the personal insolvency practitioner shall come to an end.
Amendment No. 63 inserts a
new subsection (3) in section 53 to provide that a proposal for a debt settlement arrangement should only concern debts which are in default for a period of more than six months prior to the application. Amendment No. 118
provides for a similar amendment to be made to section 88 regarding a proposal for a personal insolvency arrangement.
Amendment No. 65
extends the provisions of
section 54(2)(e) with new text to provide that the schedule of debts and creditors that must accompany an application for a protective certificate relating to a proposal for a debt settlement arrangement should also contain any other information that may be prescribed. Amendment No. 120
provides for a corresponding amendment to section 89(2)(e) regarding an application for a protective certificate relating to a proposal for a personal insolvency arrangement.
Amendment No. 66 inserts two new subsections in section 54 to improve the text. The new subsection (3) provides that an application for a protective certificate may be withdrawn by the personal insolvency practitioner at any time prior to the issue of the certificate. This is not made clear in the Bill as it currently stands. The new subsection (4) places an obligation on the personal insolvency practitioner to notify the insolvency service as soon as practicable after he or she becomes aware of any inaccuracy or omission in an application for a protective certificate. The insolvency service is required to have regard to any such information provided under subsection (4) for the purposes of its consideration of the debtor’s application. Amendment No. 121
provides for the same amendments to be made to section 89 in relation to the personal insolvency arrangement.
Amendment No. 67 will replace the current section 56 with improved and extended text regarding the process whereby the insolvency service refers an application for a protective certificate in respect of a debt settlement arrangement to the court. The new elements concern situations where the insolvency service is dissatisfied with the application and may require a revised application or where a court requires further information. Where a court decides to hold a hearing, it may hold it otherwise than in public.
Amendment No. 122 is similar in purpose to
Amendment No. 67
and
proposes the replacement of section 91 relating to the process for referring an application for a protective certificate in respect of a personal insolvency arrangement to the court.
Amendment No. 117 removes the requirement for a debtor applying for a personal insolvency arrangement to make a statutory declaration as to his or her co-operation with secured creditors in regard to the principal private residence and replaces it with a requirement for a declaration in writing. At present, section 131 requires the Minister for Justice and Equality to prescribe the form of the prescribed financial statement to be used in applications for the new debt resolution processes provided for in the Bill. For flexibility, amendments No. 177 and 178 propose instead that the insolvency service should carry out this function. Amendment No. 179 is a technical drafting amendment to improve the presentation of section 131.
Seanad amendment No. 61:
Section 48: In page 48, between lines 12 and 13, to insert the following new subsection:
“(5) Where the advice of a personal insolvency practitioner under subsection (1) is that the debtor should not make a proposal for, or enter into, an arrangement, the personal insolvency practitioner shall notify the Insolvency Service of that fact, and the appointment of the personal insolvency practitioner under section 46(3) shall come to an end.”.
Seanad amendment No. 66:
Section 54: In page 51, between lines 9 and 10, to insert the following subsections:
“(3) An application under this section may be withdrawn by the personal insolvency practitioner at any time prior to the issue of a protective certificate under section 56.
(4) Where a personal insolvency practitioner becomes aware of any inaccuracy or omission in an application under this section or any document accompanying such an application, he or she shall inform the Insolvency Service of this fact as soon as practicable and the Insolvency Service shall have regard to any information provided under this subsection for the purposes of its consideration of the application.”.
Seanad amendment agreed to.
Seanad amendment No. 57:
Section 46: In page 44, subsection (2)(c), line 43, after “arrangement,” to insert the following:
“which advice the personal insolvency practitioner shall confirm in writing to the debtor,”.
Seanad amendment agreed to.
Seanad amendment No. 58:
Section 46: In page 45, lines 15 to 39, to delete subsections (4) to (6) and substitute the following:
“(4) On being appointed under subsection (3), the personal insolvency practitioner shall—
(a) confirm in writing to the debtor that the personal insolvency practitioner has consented to act in the role of personal insolvency practitioner as respects the debtor, and
(b) notify the Insolvency Service of his or her appointment.
(5) Where a personal insolvency practitioner is appointed under subsection (3), he or she shall stand appointed, and the debtor concerned shall not appoint another personal insolvency practitioner under that subsection, until such time as—
(a) the debtor concerned requests him or her to resign from the role of personal insolvency practitioner as respects the debtor, or
(b) the personal insolvency practitioner resigns from that role, on his or her own initiative.
(6) Where a personal insolvency practitioner resigns from the role of personal insolvency practitioner as respects a debtor, he or she shall notify the Insolvency Service of that fact, which notification shall be accompanied by a statement of the reasons for his or her resignation.
(7) Where a personal insolvency practitioner appointed under subsection (3) (“original personal insolvency practitioner”)—
(a) dies,
(b) becomes incapable, through ill-health or otherwise, of performing the functions of a personal insolvency practitioner as respects the debtor,
(c) resigns from the role of personal insolvency practitioner as respects the debtor, or
(d) is no longer entitled to perform the functions of a personal insolvency practitioner under this Act,
the debtor shall, as soon as practicable after becoming aware of that fact, appoint another personal insolvency practitioner to act as his or her personal insolvency practitioner for the purposes of Chapter 3 or 4, as the case may be.
(8) (a) Where paragraph (a), (b) or (c) of subsection (7) applies, the debtor concerned shall, as soon as practicable, inform the Insolvency Service of that fact.
(b) Where a personal insolvency practitioner has been appointed under subsection (7)*, the personal insolvency practitioner shall, as soon as practicable, inform the Insolvency Service and the creditors concerned of that fact.”.
Seanad amendment agreed to.
Seanad amendment No. 59:
Section 46: In page 45, subsection (7), line 41, to delete “subsection (5)” and substitute “subsection (7)”.
Seanad amendment agreed to.
Seanad amendment No. 60:
Section 48: In page 46, between lines 20 and 21, to insert the following new section:
48.—(1) Subject to subsection (4), in relation to Debt Settlement Arrangements and Personal Insolvency Arrangements, where a debtor has an interest in or an entitlement under a relevant pension arrangement, such interest or entitlement of the debtor shall not be treated as an asset of the debtor unless subsection (2) applies.
(2) Where this section applies and a debtor has an interest in or entitlement under a relevant pension arrangement which would, if the debtor performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income, in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that debtor shall be considered as being in receipt of such income or amount of money.
(3) Subsection (2) applies where the debtor—
(a) is entitled at the date of the making of the application for a protective certificate,
(b) was entitled at any time before the date of the making of the application for a protective certificate, or
(c) will become entitled within 6 years and 6 months of the date of the making of the application for a protective certificate in relation to a Debt Settlement Arrangement or within 7 years and 6 months of the date of the making of the application for a protective certificate in relation to a Personal Insolvency Arrangement, to perform the act or exercise the option referred to in subsection (2).
(4) Nothing in subsections (1) to (3) shall remove the obligation of a debtor making an application for a protective certificate to make disclosure of any interest in or entitlement under a relevant pension arrangement in completing the Prescribed Financial Statement.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 62:
Section 48: In page 49, between lines 9 and 10, to insert the following new subsections:
“(4) (a) A Debt Settlement Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt.
(b) A proposal for a Debt Settlement Arrangement shall not include any terms that, if contained in a Debt Settlement Arrangement that came into effect, would contravene paragraph (a).
(5) Unless otherwise expressly stated, a reference in this Chapter to a debt is a reference to an unsecured debt and a reference to a creditor is a reference to an unsecured creditor.”.
Seanad amendment agreed to.
Seanad amendment No. 63:
Section 53: In page 50, between lines 21 and 22, to insert the following new subsection:
“(3) A debtor shall not be eligible to make a proposal for a Debt Settlement Arrangement where 25 per cent or more of his or her debts (other than excluded debts and secured debts) were incurred during the period of 6 months ending on the date on which an application is made under section 54 for a protective certificate.”.
Seanad amendment agreed to.
Seanad amendment No. 64:
Section 54: In page 50, before section 54, to insert the following new section:
54.—(1) An excludable debt shall be included in a proposal for a Debt Settlement Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal.
(2) Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Debt Settlement Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by—
(a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and
(b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Debt Settlement Arrangement.
(3) Subject to subsection (6), a creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(4) Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Debt Settlement Arrangement.
(5) Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Debt Settlement Arrangement, that creditor shall be entitled to vote at any creditors’ meeting called to consider that proposal.
(6) Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 58(1) in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
(7) An excludable debt shall not be the subject of a Debt Settlement Arrangement unless it is a permitted debt.
(8) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.”.
Seanad amendment agreed to.
Seanad amendment No. 65:
Section 54: In page 50, subsection (2)(e), to delete lines 39 to 44, subsection (2)(e), and substitute the following:
“(e) a schedule of the creditors of the debtor and the debts concerned, stating in relation to each such creditor—
(i) the amount of each debt due to that creditor,
(ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and
(iii) such other information as may be prescribed;”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 67:
Section 56: In page 52, lines 26 to 48, in page 53 lines 1 to 44, and in page 54 lines 1 to 8, section 56 deleted and the following section substituted:
56.—(1) Where the Insolvency Service, following its consideration under section 55—
(a) is satisfied that an application under section 54 is in order, it shall—
(i) issue a certificate to that effect,
(ii) furnish that certificate together with a copy of the application and supporting documentation to the appropriate court, and
(iii) notify the personal insolvency practitioner to that effect, and
(b) is not so satisfied, it shall notify the personal insolvency practitioner to that effect and request him or her, within 21 days from the date of the notification, to submit a revised application or to confirm that the application has been withdrawn.
(2) Where the appropriate court receives the application for a protective certificate and accompanying documentation pursuant to subsection (1)(a), it shall consider the application and documentation and, subject to subsection (3)—
(a) if satisfied that the eligibility criteria specified in section 53 have been satisfied and the other relevant requirements relating to an application for the issue of a protective certificate have been met, shall issue a protective certificate, and
(b) if not so satisfied, shall refuse to issue a protective certificate.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) Subject to subsections (6) and (7) and section 71(2), a protective certificate shall be in force for a period of 70 days from the date of its issue.
(6) Where a protective certificate has been issued pursuant to subsection (2)(a), the appropriate court may, on application to that court by the personal insolvency practitioner, extend the period of the protective certificate by an additional period not exceeding 40 days where—
(a) the debtor and the personal insolvency practitioner satisfy the court that they have acted in good faith and with reasonable expedition, and
(b) the court is satisfied that it is likely that a proposal for a Debt Settlement Arrangement which is likely—
(i) to be accepted by the creditors, and
(ii) to be successfully completed by the debtor, will be made if the extension is granted.
(7) Where a protective certificate has been issued pursuant to subsection (2)(a) or extended under subsection (6), the appropriate court may on application to that court extend the period of the protective certificate by a further additional period not exceeding 40 days where—
(a) the personal insolvency practitioner has been appointed in accordance with section 46(7)*, and
(b) the court is satisfied that the extension is necessary to enable the personal insolvency practitioner so appointed to perform his or her functions under this Chapter.
(8) A hearing held under subsection (7) shall be held with all due expedition.
(9) The period of a protective certificate may be extended under subsection (7) once only.
(10) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) issues or extends a protective certificate under this section,
(b) refuses to issue or extend a protective certificate under this section, or
(c) decides to hold a hearing referred to in subsection (3).
(11) Where a protective certificate is issued under this section, the Insolvency Service shall—
(a) enter details of the name and address of the debtor and the date of issue of the protective certificate, and
(b) where applicable, the extension under this section of the protective certificate, together with such other details as may be prescribed under section 128(3)(b), in the Register of Protective Certificates.
(12) On receipt of a notification under subsection (10) of a decision of the court referred to in that subsection, the personal insolvency practitioner shall notify each of the creditors specified in the schedule of creditors of that decision and, in the case of a decision to issue a protective certificate, the notification by the personal insolvency practitioner shall contain a statement—
(a) that the debtor intends to make a proposal for a Debt Settlement Arrangement,
(b) of the effect of the protective certificate under section 57, and
(c) of the right of the creditor under section 58 to appeal the issue of the protective certificate.
(13) Notwithstanding the provisions of subsections (5), (6) and (7), a protective certificate that is in force on the date on which a proposal for a Debt Settlement Arrangement is approved in accordance with section 68 shall continue in force until it ceases to have effect in accordance with section 71.
(14) A protective certificate issued under this section shall—
(a) specify—
(i) the name of the debtor who is the subject of it,
(ii) the debts (“specified debts”) which are subject to it, and
(iii) the name of each creditor to whom a specified debt is owed,
and
(b) contain such other information as may be prescribed.
(15) In considering an application under this section the appropriate court shall be entitled to treat a certificate issued by the Insolvency Service under subsection (1) as evidence of the matters certified therein.”.
Seanad amendment agreed to.
Amendments Nos. 68, 69, 71, 82, 92, 93, 123, 124, 126, 127, 146 and 147 are related and will be discussed together by agreement.
Seanad amendment No. 68:
Section 57: In page 54, lines 9 to 45, to delete subsections (1) to (3) and substitute the following:
“(1) Subject to subsections (3), (4), (5) and (8), a creditor to whom notice of the
issue of a protective certificate has been given shall not, whilst the protective
certificate remains in force, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor holds security over the goods;
(f) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor;
(g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.
(2) Whilst a protective certificate remains in force, no bankruptcy petition relating
to the debtor—
(a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt,
(b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
(3) Without prejudice to subsections (1) and (2), and subject to section 63, whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Debt Settlement Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.”.
These amendments seek to improve the provisions of the Bill relating to the effect of a protective certificate or the approval of a debt settlement arrangement or a personal insolvency arrangement. Amendments Nos. 68 and 123 refine the text of sections 57 and 92 to better clarify the effect of the issue of a protective certificate in a debt settlement arrangement or a personal insolvency arrangement.
Amendment No. 69 makes it clear that a secured debt is not affected by a protective certificate in the debt settlement arrangement process. Amendment No. 71 is required to improve the current formulation of section 59(1). It also includes a new provision which requires the personal insolvency practitioner to make a proposal for a debt settlement arrangement in addition to inviting submissions from creditors. Amendments Nos. 126 and 127 provide for corresponding amendments to section 94 regarding the personal insolvency arrangement. Amendment No. 82 is a technical drafting amendment which amends the existing text of section 63 to include a necessary cross-reference to section 57. Amendments Nos. 92 and 146 refine the text of sections 74 and 112 in relation to the effect of an approved debt settlement arrangement or personal insolvency arrangement on creditors. Amendments Nos. 93 and 147 aim to clarify the position in those sections in relation to creditor action against another person who may have guaranteed the specified debts concerned. The purpose of Amendment No. 124 is to delete section 92(8), which is now redundant following the amendments regarding excluded and excludable debts.
Seanad amendment No. 70:
Section 58: In page 55, subsection (3)(a), line 36, to delete “failing to give such direction” and substitute “not making such an order”.
Seanad amendment agreed to.
Seanad amendment No. 69:
Section 57: In page 55, lines 21 and 22, to delete subsection (8) and substitute the following:
“(8) A secured debt shall not be subject to or affected by a protective certificate under this Chapter.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 71:
Section 59: In page 56, lines 3 to 19, to delete subsection (1) and substitute the following:
“(1) Where a protective certificate has been issued, the personal insolvency
practitioner shall as soon as practicable thereafter—
(a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Debt Settlement Arrangement and, subject to section 62 (2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement,
(b) consider any submissions made by creditors in accordance with paragraph (a) regarding the debts and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, including any submission made by a creditor with respect to previous or existing offers of arrangements made by the creditor to or with the debtor, and
(c) make a proposal for a Debt Settlement Arrangement in respect of the debts concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 72:
Section 59: In page 56, subsection (2)(a), line 26, to delete “debts;” and substitute “debts.”.
Seanad amendment agreed to.
Amendments Nos. 73, 83 to 88, inclusive, 90, 96 to 100, inclusive, 137 to 144, inclusive, 151 to 154, inclusive and 182 are related and will be discussed together .
Seanad amendment No. 73:
Section 59: In page 56, subsection (2)(b)(i), line 29, to delete “section 67, 77 or 78” and substitute “section 67 or 77”.
This group of amendments deals with procedures for creditors’ meetings relating to proposals for a debt settlement arrangement or personal insolvency arrangement, court approval of a debt settlement arrangement or personal insolvency arrangement, and also with procedures for variation of such arrangements. Amendment No. 83 provides for a more specific reference to the documents required to be given to the creditors prior to a creditors’ meeting to consider a proposal for a debt settlement arrangement. The amendment also makes it clear that where a creditors’ meeting does not take place before the expiry of the protective certificate, the debt settlement arrangement procedure shall be deemed to have come to an end.
Amendments Nos. 84, 85 and 86 are technical drafting amendments to provide for correct cross-referencing consequential to Amendment No. 40. Amendments No. 137, 138 and 139 provide for corresponding amendments to the provisions relating to creditors’ meetings regarding proposals for personal insolvency arrangements.
Amendment No. 87 proposes to replace section 67(3) with new text in order to make the provisions consistent with similar provisions in the Bill, such as those in section 65(2). It also provides that where an amended debt settlement arrangement proposal is prepared, the personal insolvency practitioner should also be required to furnish this proposal to the insolvency service. Amendment No. 142 will make a corresponding amendment to section 105(5), which applies to amended proposals for personal insolvency arrangements.
Amendment No. 88 clarifies that the voting rights exercisable by a creditor at a meeting of creditors to approve a debt settlement arrangement are in proportion to the amount rather than the value of the debt due to that creditor on the day the protective certificate is issued. This is a better expression of the likely situation.
Amendment No. 140 replaces the current section 104 of the Bill in order to set out, in a clearer fashion, all of the relevant factors in regard to the determination and exercise of voting rights at creditors’ meetings in regard to a personal insolvency arrangement. Amendment No. 141 is a technical drafting amendment.
Amendment No. 143 replaces the current text of section 106 with regard to the proportion of creditors required to approve a personal insolvency arrangement. The purpose of the amendment is to clarify the operation of the section. The section has been shortened to reflect the key point, which is the percentage of votes in total and in the secured and unsecured classes. Some other provisions of the section have been relocated to the revised section 104 proposed by amendment No. 140.
Amendment No. 182 proposes to insert a new section in Chapter 6. It sets out how debts in other currencies are to be dealt with in the context of the provisions of the Bill. There are specific references to a foreign currency in section 68(3) and section 104(2). However, I am advised that it would be more appropriate to delete those references and to provide a general currency conversion provision applicable to the three new debt resolution processes instead.
Amendments No. 90 and 144 replace the provisions of section 73 and 111 in regard to the approval by a court of a debt settlement arrangement or personal insolvency arrangement. The text of the sections, while not altered substantially, is now presented in a more coherent fashion in regard to the satisfaction of the eligibility criteria for the insolvency service and the court.
Regarding the variation of debt settlement arrangements and personal insolvency arrangements, amendment No. 73 is consequential on Amendment No. 100, which will delete section 78 of the Bill. This section provided for the process of termination of a debt settlement arrangement by a meeting of creditors. On further reflection with the Office of the Attorney General and Parliamentary Counsel, it is proposed that the section be deleted on the basis that it is not particularly required in the light of the provisions of section 79, which require the involvement of the court. There is no comparable provision in the personal insolvency arrangement.
Amendments Nos. 96 and 151 are required to ensure consistency between the debt settlement arrangement and personal insolvency arrangement provisions of the Bill with regard to the variation of either arrangement. These amendments address inconsistencies between sections 79 concerning the debtor’s consent to a variation of a debt settlement arrangement and the corresponding section 115 concerning consent to the variation of a personal insolvency arrangement.
Amendment No. 97 will remove the discretion previously afforded to the personal insolvency practitioner in regard to the calling of a creditors’ meeting to consider a possible variation in a debt settlement arrangement. Amendments Nos. 98, 99, 152, 153 and 154 aim to clarify the procedures for voting by creditors on a proposed variation of a debt settlement arrangement, or a personal insolvency arrangement.
Seanad amendment No. 74:
Section 59: In page 56, subsection (2)(b)(ii), line 31, to delete “concerned;” and substitute “concerned.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 75:
Section 60: In page 57, subsection (2)(b), line 8, to delete “subject to paragraphs (c) and (d),”.
Seanad amendment agreed to.
Seanad amendment No. 76:
Section 60: In page 57, subsection (2), lines 13 to 49 and in page 58, lines 1 and 2, to delete paragraphs (c) and (d).
Seanad amendment agreed to.
Seanad amendment No. 77:
Section 60: In page 59, lines 3 to 10, to delete subsection (4) and substitute the following:
“(4) For the purposes of subsection (2)(f), and without prejudice to subsection (3), in determining whether a debtor would have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants under the Debt Settlement Arrangement, regard shall be had to any guidelines issued under section 23*.”.
Seanad amendment agreed to.
Amendments Nos. 78, 80, 81, 89, 130, 132 and 133 are related and will be discussed together.
Seanad amendment No. 78:
Section 61: In page 59, subsection (3), line 30, to delete “Arrangement,” and substitute “Arrangement, and subject to section 62,”.
This group of amendments deals with the treatment of preferential debts in the debt settlement arrangement and personal insolvency arrangement processes.
Amendments Nos. 78 and 130 are technical amendments to sections 61 and 96, to insert cross-references to the sections dealing with a preferential debt and debt settlement arrangement or a personal insolvency arrangement.
Amendment No. 80 replaces the existing text of section 62(1) with revised text which makes clear that unless the creditor concerned otherwise agrees in writing and provision to that effect is made in the terms of the debt settlement arrangement, a preferential debt is to be paid in priority by the debtor. Amendment No. 81 proposes the insertion of an interpretation provision in relation to “preferential debt”. Amendments No. 132 and 133 make corresponding amendments to section 97, which relates to preferential debt for the purposes of the Personal Insolvency Arrangement Chapter. Amendment No. 89 replaces subsections (3), (4) and (5) of section 68 with one new subsection (2). The provisions in subsections (3) and (4) have been addressed by Amendments Nos. 76 and 182. The provisions of the previous subsection (5) relating to preferential debt in relation to a proposal for a Debt Settlement Arrangement have been further refined in the new subsection (2).
Seanad amendment No. 83:
Section 65: In page 62, lines 1 to 21, to delete subsections (2) to (4) and substitute the following:
“(2) When calling a creditors’ meeting under this section, the personal insolvency practitioner shall do so in accordance with any regulations under section 69 and, in any case, shall—
(a) give each creditor at least 14 days written notice of the meeting and the date on which, and time and place at which, the meeting will be held,
(b) ensure that the notice referred to in paragraph (a) is accompanied by a copy of each of the documents referred to in section 66, and
(c) lodge a copy of the notice referred to in paragraph (a) and the documents referred to in section 66 with the Insolvency Service.
(3) Where a creditors’ meeting referred to in subsection (1) does not take place before the expiry of the protective certificate, the Debt Settlement Arrangement procedure shall be deemed to have come to an end.”.
Seanad amendment No. 88:
Section 68: In page 64, lines 28 to 30, to delete subsection (2) and substitute the following:
“(2) The voting rights exercisable by a creditor at a creditors’ meeting shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.”.
Seanad amendment No. 93:
Section 74: In page 68, between lines 28 and 29, to insert the following subsection:
“(10) Notwithstanding subsections (3) and (4), the fact that a Debt Settlement Arrangement is in effect in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) or (4) as respects another person who has guaranteed the specified debts concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 79:
Section 61: In page 59, between lines 33 and 34, to insert the following subsection:
"(4) Unless provision is otherwise made in the Debt Settlement Arrangement where an Arrangement provides for payments to a creditor to whom section 54 applies that are greater than the payments that creditor would receive if such payments were made on a pari passu basis, the fees, costs and charges referred to in section 60(2)(g) shall be payable by that creditor in proportion to the payments received by him or her.".
Seanad amendment agreed to.
Seanad amendment No. 80:
Section 62: In page 59, lines 41 to 46 and in page 60, lines 1 to 6, to delete subsection (1)and substitute the following:
“(1) Unless the creditor concerned otherwise agrees in writing and provision is so made in the terms of the Debt Settlement Arrangement, a preferential debt shall,subject to subsection (3), be paid in priority by the debtor and where those debts are to be paid in priority the provisions of section 81 of the Bankruptcy Act 1988 shall apply with all necessary modifications.”.
Seanad amendment agreed to.
Seanad amendment No. 81:
Section 62: In page 60, between lines 19 and 20, to insert the following subsection:
“(4) In this Chapter, “preferential debt” means a debt which, if the debtor concerned were a bankrupt would be a debt—
(a) that by virtue of section 81 of the Bankruptcy Act 1988 is to be paid in priority to all other debts, or
(b) that by virtue of any other statutory provision is to be included among such debts.”.
Seanad amendment agreed to.
Seanad amendment No. 82:
Section 63: In page 60, subsection (1), line 20, to delete “section,” and substitute “section and section 57,”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 84:
Section 66: In page 62, subsection (1), line 22, to delete “section 65(3)(b)” and substitute “section 65(2)(b)”.
Seanad amendment agreed to.
Seanad amendment No. 85:
Section 66: In page 63, subsection (2), line 20, to delete “section 65(3)” and substitute “section 65(2)”.
Seanad amendment agreed to.
Seanad amendment No. 86:
Section 66: In page 63, subsection (2)(b), line 27, to delete “section 65(3)” and substitute “section 65(2)”.
Seanad amendment agreed to.
Seanad amendment No. 87:
Section 67: In page 63, lines 39 to 47, to delete subsection (3) and substitute the following:
“(3) Where the personal insolvency practitioner prepares an amended proposal for a Debt Settlement Arrangement pursuant to subsection (2) he or she shall—
(a) notify the debtor of the date on which, and time and place at which, the adjourned meeting will be held,
(b) at least 7 days before the day of the adjourned meeting, unless all of the creditors agree in writing to receive a shorter period of notice, notify each creditor of the date on which, and time and place at which, the adjourned meeting will be held,
(c) ensure that the notices referred to in paragraph (a) and (b) are accompanied by a copy of the amended proposal, and
(d) lodge a copy of the notice referred to in paragraph (b) and a copy of the amended proposal with the Insolvency Service.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 89:
Section 68: In page 64, lines 31 to 44, to delete subsections (3) to (6) and substitute the following:
“(3) A creditor to whom a preferential debt is owed shall not be entitled to vote in respect of that debt in favour of a proposal for a Debt Settlement Arrangement at a creditors’ meeting unless that creditor has furnished to the personal insolvency practitioner a waiver in writing of the creditor’s right to have that debt treated as a preferential debt.”.
Seanad amendment agreed to.
Seanad amendment no. 90:
Section 73: In page 66, lines 23 to 47 and in page 67, lines 1 to 5, to delete subsections (1) to (6) and substitute the following:
“(1) Where—
(a) no objection is lodged by a creditor with the appropriate court within 14 days of the giving of the notice referred to in section 70, or
(b) an objection is lodged with the appropriate court and the matter is determined by the court on the basis that the objection should not be allowed, the appropriate court shall proceed to consider, in accordance with this section, whether to approve the coming into effect of the Debt Settlement Arrangement.
(2) For the purposes of its consideration under subsection (1), the appropriate court shall consider the copy of the Debt Settlement Arrangement furnished to it under section 71(1) and, subject to subsection (3)—
(a) shall approve the coming into effect of the Arrangement, if satisfied that the—
(i) eligibility criteria specified in section 53 have been satisfied,
(ii) mandatory requirements referred to in section 60(2) have been complied with,
(iii) Debt Settlement Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than a permitted debt) or a secured debt or otherwise affect such a debt, and
(iv) requisite percentage of creditors referred to in section 68(9) has approved the proposal for a Debt Settlement Arrangement,and
(b) if not so satisfied, shall refuse to approve the coming into effect of the Debt Settlement Arrangement.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) For the purposes of subsection (2), the court may accept—
(a) a certificate issued by the Insolvency Service certifying that the eligibility criteria specified in section 53 have been satisfied as evidence that such eligibility criteria have been satisfied, and
(b) the certificate issued by the personal insolvency practitioner concerned pursuant to section 70(1) as evidence that the requisite percentage of creditors referred to in section 68(9) has approved the proposal for a Debt Settlement Arrangement.
(6) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) approves or refuses to approve the coming into effect of the Debt Settlement Arrangement under this section, or
(b) decides to hold a hearing referred to in subsection (3).
(7) On receipt of a notification under subsection (6) of the approval of the coming into effect of the Debt Settlement Arrangement, the Insolvency Service shall register the Debt Settlement Arrangement in the Register of Debt Settlement Arrangements.”.
Seanad amendment agreed to.
Seanad amendment No. 91:
Section 74: In page 67, subsection (2)(b), lines 19 to 21, to delete all words from and including “concerned,” in line 19 down to and including “Arrangement.” in line 21 and substitute “concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 92:
Section 74: In page 67, lines 22 to 43, to delete subsection (3) and substitute the following:
“(3) Where a Debt Settlement Arrangement is in effect, a creditor who is bound by it shall not, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor has security over the goods;
(f) contact the debtor regarding payment of the specified debt otherwise than at the request of the debtor;
(g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that a Debt Settlement Arrangement is in effect—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 94:
Section 75: In page 69, subsection (5), line 2, after “has” to insert “defaulted”.
Seanad amendment agreed to.
Seanad amendment No. 95:
Section 75: In page 69, subsection (10), line 32, after “made” to insert the following:
“under this Act and in accordance with the Debt Settlement Arrangement”.
Seanad amendment agreed to.
Seanad amendment No. 96:
Section 77: In page 70, between lines 23 and 24, to insert the following subsections:
“(2) The debtor’s written consent shall be required to any variation of a Debt Settlement Arrangement provided that any unreasonable refusal by the debtor to consent to a variation shall be subject to challenge in accordance with section 84.
(3) A debtor shall be considered to be acting reasonably where the debtor refuses to consent to a variation of a Debt Settlement Arrangement where that variation would require the debtor—
(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:
(i) income tax;
(ii) social insurance contributions;
(iii) payments made by him or her in respect of excluded debts;
(iv) payments made by him or her in respect of excludable debts that are not permitted debts;
(v) such other levies and charges on income as may be prescribed,
or
(b) to make a payment amounting to more than 50 per cent of the value of any property acquired by the debtor after the coming into effect of the Debt Settlement Arrangement unless receipt of that property had been anticipated by the terms of that arrangement.”.
Seanad amendment agreed to.
Seanad amendment No. 97:
Section 77: In page 70, subsection (2), line 29, to delete “may” and substitute “shall”.
Seanad amendment agreed to.
Seanad amendment No. 98:
Section 77: In page 70, lines 31 to 38, to delete subsection (3), and substitute the following:
“(3) When calling a creditors’ meeting to be held under this section, the personal insolvency practitioner shall—
(a) give each creditor at least 14 days written notice of the meeting and the date on which, and the time and place at which, the meeting will be held,
(b) ensure that the notice referred to in paragraph (a) is accompanied by written proposal for the variation of the Debt Settlement Arrangement, and”.
Seanad amendment agreed to.
Seanad amendment No. 99:
Section 77: In page 71, lines 1 to 3, to delete subsection (6) and substitute the following:
“(6) For the purposes of subsection (5), the voting rights exercisable by a creditor at a creditors’ meeting under this section shall be proportionate to the amount of the debt due by the debtor to the creditor on the date on which the vote takes place.”.
Seanad amendment agreed to.
Seanad amendment No. 100:
Section 78: In page 71, to delete lines 26 to 45 and in page 72, to delete lines 1 to 20.
Seanad amendment agreed to.
Seanad amendments Nos. 101 to 105, inclusive, 108, 110, 156, and 161 to 163, inclusive, are related and will be discussed together by agreement.
Seanad amendment No. 101:
Section 79: In page 72, subsection (1), line 21, to delete "A creditor" and substitute "Without prejudice to section 84, a creditor".
These amendments deal with situations where a creditor or personal insolvency practitioner wishes to challenge the coming into effect of a debt settlement arrangement or personal insolvency arrangement or to have such an arrangement terminated in accordance with the Bill.
Amendments Nos. 101 and 108
are
technical drafting amendments to insert necessary cross-references in sections 79 and 84. Amendment No. 102
clarifies, in the context of a court’s consideration for the application for termination of a debt settlement arrangement, at what point in time the eligibility criteria were not met.
Amendment No. 103
is a
technical drafting amendment to improve the presentation of the Bill. Amendments Nos. 104 and 161 provide for a clearer expression of what constitutes a period of arrears for the purposes of an application to the court by a creditor or personal insolvency practitioner for termination of a debt settlement arrangement or personal insolvency arrangement on the grounds that the debtor is in arrears with his or her payments for at least three months. Amendments Nos. 105 and 162
will ensure that the debtor also will be given notice by the personal insolvency practitioner of the termination of a debt settlement arrangement or personal insolvency arrangement due to a six month arrears default. Amendments Nos. 110 and 156
are
technical drafting amendments to sections 84 and 116 to make it clear that a creditor may only challenge a debt settlement arrangement or personal insolvency arrangement on the grounds that the debtor has committed an offence if the offence in question has caused a material detriment to the creditor. The purpose of Amendment No. 163 is to define, in section 118, when a six month arrears default takes place. The new subsection reflects the text of section 80(3), which defines a six month arrears period for the purposes of a debt settlement arrangement.
Seanad amendment No. 102:
Section 79: In page 72, lines 29 to 31 to delete paragraph (b) and substitute the following:
“(b) the debtor, when the Debt Settlement Arrangement was proposed, did not satisfy the eligibility criteria specified in section 53;”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 103:
Section 79: In page 72, subsection (1)(f), line 42, before “have” to insert “to”.
Seanad amendment agreed to.
Seanad amendment No. 104:
Section 79: In page 73, subsection (2), lines 9 and 10, to delete paragraph (b) and substitute the following:
“(b) at no time during that 3 month period were any obligations in respect of those payments discharged.”
Seanad amendment agreed to.
Seanad amendment No. 105:
Section 80: In page 73, subsection (1), line 21, after “Service” to insert “and the debtor”.
Seanad amendment agreed to.
Seanad amendment No. 106:
Section 81: In page 73, subsection (1), line 36, to delete “has been deemed to come to an end, has failed” and substitute “has been deemed to have failed”.
Seanad amendment agreed to.
Seanad amendments Nos. 107, 185 to 191, inclusive, and 193 to 201, inclusive, are related and will be discussed together by agreement.
Seanad amendment No. 107:
Section 82: In page 74, to delete lines 4 to 8.
Amendment No. 107 proposes the deletion of section 82 which provides that a terminated debt settlement arrangement under sections 78, 79 or 80 are to be deemed acts of bankruptcy. These are now listed in amendment No. 186 which inserts them in to the appropriate section in the Bankruptcy Act 1988. Amendment No. 185 inserts a definition of “trustee" for the purpose of interpretation. Amendment No. 186 amends section 7 of the Bankruptcy Act 1988 to provide that a failed or terminated debt settlement arrangement or personal insolvency arrangement will be included in the list of acts of bankruptcy. Amendments Nos. 187 and 188 are technical drafting amendments to improve the text of the Bill. Amendment No. 189 empowers the court to order the attendance of the debtor at the court hearing of the adjudication of the creditor’s petition for his or her bankruptcy and to make a full disclosure of assets and liabilities. This provision corrects a gap in the present legislation.
Amendment No. 190 is a technical drafting amendment to section 139 of the Bill, which replaces section 15 of the Bankruptcy Act, to add a reference to the requirements of section 11 of that Act being fulfilled. Amendment No. 191 is a technical drafting amendment to improve the presentation of the Bill. Amendment No. 193 provides for the ending of applications for payments by the bankrupt under section 65 in favour of the approach to bankruptcy payment orders now provided under Amendment No. 200. It also provides for the continuation and possible variation of an existing payment order under section 65. Amendments Nos. 194 to 198 are essentially drafting amendments to improve the text by providing for the issue of a certificate of discharge or annulment in a bankruptcy, and to make a necessary reference to a trustee in bankruptcy in the sections of the Bankruptcy Act 1988 concerned.
Amendment No. 200 substitutes and improves the current text in section 146 of the Bill inserting section 85D to the Bankruptcy Act in regard to bankruptcy payment orders which may, if the debtor’s circumstances permit, be sought. The court in deciding on such orders will have regard to the reasonable living expenses of the bankrupt and his or her dependants. Amendment No. 201 updates the time period in section 123 of the Bankruptcy Act in regard to potentially fraudulent actions from the present twelve months to the now standard period in this Bill of three years.
Seanad amendment No. 111:
Section 84: In page 74, subsection (1)(g), line 44, to delete “within the meaning of subsection (2)”.
Seanad amendment agreed to.
Seanad amendment No. 108:
Section 84: In page 74, subsection (1), line 23, after “are” to insert “, without prejudice to section 79,”.
Seanad amendment agreed to.
Seanad amendment No. 109:
Section 84: In page 74, subsection (1)(b), line 32, to delete “followed” and substitute “complied with”.
Seanad amendment agreed to.
Seanad amendment No. 110:
Section 84: In page 74, subsection (1)(f), line 42, to delete “Act” and substitute the following:
“Act, which causes a material detriment to the creditor”.
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 112:
Section 84: In page 75, lines 1 to 5, to delete paragraph (h), and substitute the following:
“(h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).”.
Seanad amendment agreed to.
Seanad amendment No. 113:
Section 84: In page 75, lines 6 to 26, to delete subsections (2) and (3).
Seanad amendment agreed to.
Seanad amendment No. 114:
Section 85: In page 75, before section 85, but in Chapter 3, to insert the following new section:
85.—(1) Where, as respects a debtor who has entered into a Debt Settlement Arrangement which is in force, a creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement, the creditor or personal insolvency practitioner may make an application to the appropriate court for relief in accordance with this section.
(2) The reference to the debtor having made contributions to a relevant pension arrangement shall be construed as a reference to contributions made by the debtor at any time within 3 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54.
(3) Where the appropriate court considers that having regard in particular to the matters referred to in subsection (4) the contributions to a relevant pension arrangement were excessive it may:
(a) direct that such part of the contribution concerned (less any tax required to be deducted) be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution amongst the creditors of the debtor, and
(b) make such other order as the court deems appropriate, including an order as to the costs of the application.
(4) The matters referred to in subsection (3) as respects the contributions made by the debtor to a relevant pension arrangement are:
(a) whether the debtor made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the debtor made the contribution concerned;
(b) whether the debtor was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the debtor or a person who as respects the debtor is a connected person could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the debtor in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54 including the percentage of total income of the debtor concerned which such contributions represent in each of those years;
(e) the age of the debtor at the relevant times;
(f) the percentage limits which applied to the debtor in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54; and
(g) the extent of provision made by the debtor in relation to any relevant pension arrangement prior to the making of the contributions concerned.”.
Seanad amendment agreed to.
Seanad amendments Nos. 115 and 184 are related and will be discussed together by agreement.
Seanad amendment No. 115:
Section 85: In page 75, to delete lines 29 to 39.
This group of amendments deals with the review of the Bill after its enactment. Amendment No. 115 which proposes the deletion of section 85, is consequential on the new review section inserted by Amendment No. 135a. amendment No. 184 revises the original review provision in regard to the operation of the Bill. That review, which will now encompass the three new debt resolution processes in Part 3, will commence no later than three years after commencement and be completed within a year.
However, as I said when we discussed this point previously, the operation of this Bill will be subject to ongoing review. I have made it clear that I will swiftly intervene, with amending legislation, to make additional provision or to correct any error that arises from operational experience.
Seanad amendment No. 120:
Section 89: In page 79, subsection (2), lines 1 to 6, to delete paragraph (e) and substitute the following:
“(e) a schedule of the creditors of the debtor and the debts concerned, stating in relation to each such creditor—
(i) the amount of each debt due to that creditor,
(ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and
(iii) such other information as may be prescribed;”.
Seanad amendment No. 125:
Section 93: In page 84, subsection (3)(a), line 1, to delete “failing to give such direction” and substitute “not making such an order”.
Seanad amendment agreed to.
Seanad amendment No. 116:
Section 116: In page 76, between lines 39 and 40, to insert the following subsections:
“(6) (a) A Personal Insolvency Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt.
(b) A proposal for a Personal Insolvency Arrangement shall not include any terms that, if contained in a Personal Insolvency Arrangement that came into effect, would contravene paragraph (a).”.
Seanad amendment agreed to.
Seanad amendment No. 117:
Section 88: In page 77, subsection (1)(g), line 18, to delete “statutory declaration” and substitute “declaration in writing”.
Seanad amendment agreed to.
Seanad amendment No. 118:
Section 88: In page 78, between lines 33 and 34, to insert the following subsection:
“(5) A debtor shall not be eligible to make a proposal for a Personal Insolvency Arrangement where 25 per cent or more of his or her debts (other than excluded debts) were incurred during the period of 6 months ending on the date on which an application is made under section 89 for a protective certificate.”.
Seanad amendment agreed to.
Seanad amendment no. 119:
Section 89: In page 78, before section 89, to insert the following new section:
89.—(1) An excludable debt shall be included in a proposal for a Personal Insolvency Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal.
(2) Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Personal Insolvency Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by—
(a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and
(b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Personal Insolvency Arrangement.
(3) A creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(4) Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Personal Insolvency Arrangement.
(5) Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Personal Insolvency Arrangement, that creditor shall be entitled to vote at any creditors' meeting called to consider that proposal.
(6) Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 93(1) in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
(7) An excludable debt shall not be the subject of a Personal Insolvency Arrangement unless it is a permitted debt.
(8) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.”
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 121:
Section 89: In page 79, between lines 17 and 18, to insert the following subsections:
“(3) An application under this section may be withdrawn by the personal insolvency practitioner at any time prior to the issue of a protective certificate under section 91.
(4) Where a personal insolvency practitioner becomes aware of any inaccuracy or omission in an application under this section or any document accompanying such an application, he or she shall inform the Insolvency Service of this fact as soon as practicable and the Insolvency Service shall have regard to any information provided under this subsection for the purposes of its consideration of the application.”.
Seanad amendment agreed to.
Seanad amendment No. 122:
Section 91: In page 80, lines 38 to 49, in page 81 lines 1 to 45 and in page 82 lines 1 to 18, to delete section 91 and substitute the following new section:
91.—(1) Where the Insolvency Service, following its consideration under section 90—
(a) is satisfied that an application under section 89 is in order, it shall—
(i) issue a certificate to that effect,
(ii) furnish that certificate together with a copy of the application and supporting documentation to the appropriate court, and
(iii) notify the personal insolvency practitioner to that effect, and
(b) is not so satisfied, it shall notify the personal insolvency practitioner to that effect and request him or her, within 21 days from the date of the notification, to submit a revised application or to confirm that the application has been withdrawn.
(2) Where the appropriate court receives the application for a protective certificate and accompanying documentation pursuant to subsection (1)(a), it shall consider the application and documentation and, subject to subsection (3)—
(a) if satisfied that the eligibility criteria specified in section 88 have been satisfied and the other relevant requirements relating to an application for the issue of a protective certificate have been met, shall issue a protective certificate, and
(b) if not so satisfied, shall refuse to issue a protective certificate.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) Subject to subsections (6) and (7) and section 109(2), a protective certificate shall be in force for a period of 70 days from the date of its issue.
(6) Where a protective certificate has been issued pursuant to subsection (2)(a),the appropriate court may, on application to that court by the personal insolvency practitioner, extend the period of the protective certificate by an additional period not exceeding 40 days where—
(a) the debtor and the personal insolvency practitioner satisfy the court that they have acted in good faith and with reasonable expedition, and
(b) the court is satisfied that it is likely that a proposal for a Personal Insolvency Arrangement which is likely—
(i) to be accepted by the creditors, and
(ii) to be successfully completed by the debtor, will be made if the extension is granted.
(7) Where a protective certificate has been issued pursuant to subsection (2)(a) or extended under subsection
(6), the appropriate court may on application to that court extend the period of the protective certificate by a further additional period not exceeding 40 days where—
(a) the personal insolvency practitioner has been appointed in accordance with section 46(7), and
(b) the court is satisfied that the extension is necessary to enable the personal insolvency practitioner so appointed to perform his or her functions under this Chapter.
(8) A hearing held under subsection (7) shall be held with all due expedition.
(9) The period of a protective certificate may be extended under subsection (7) once only.
(10) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) issues or extends a protective certificate under this section,
(b) refuses to issue or extend a protective certificate under this section, or
(c) decides to hold a hearing referred to in subsection (3).
(11) Where a protective certificate is issued under this section, the Insolvency Service shall—
(a) enter details of the name and address of the debtor and the date of issue of the protective certificate, and
(b) where applicable, the extension under this section of the protective certificate, together with such other details as may be prescribed under section 128(3)(b), in the Register of Protective Certificates.
(12) On receipt of a notification under subsection (10) of a decision of the court referred to in that subsection, the personal insolvency practitioner shall notify each of the creditors specified in the schedule of creditors of that decision and, in the case of a decision to issue a protective certificate, the notification by the personal insolvency practitioner shall contain a statement—
(a) that the debtor intends to make a proposal for a Personal Insolvency Arrangement,
(b) of the effect of the protective certificate under section 92, and
(c) of the right of the creditor under section 93 to appeal the issue of the protective certificate.
(13) Notwithstanding the provisions of subsections (5), (6) and (7), a protective certificate that is in force on the date on which a proposal for a Personal Insolvency Arrangement is approved in accordance with section 106 shall continue in force until it ceases to have effect in accordance with section 109.
(14) A protective certificate issued under this section shall—
(a) specify—
(i) the name of the debtor who is the subject of it,
(ii) the debts (“specified debts”) which are subject to it, and
(iii) the name of each creditor to whom a specified debt is owed,
and
(b) contain such other information as may be prescribed.
(15) In considering an application under this section the appropriate court shall be entitled to treat a certificate issued by the Insolvency Service under subsection (1) as evidence of the matters certified therein.”.
Seanad amendment agreed to.
Seanad amendment No. 123:
Section 92: In page 82, lines 19 to 43 and in page 83, lines 1 to 16, to delete subsections
(1) to (3) and substitute the following:
“(1) Subject to subsections (3), (4) and (5), a creditor to whom notice of the issue of a protective certificate has been given shall not, whilst the protective certificate remains in force, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to enforce security held by the creditor in connection with the specified debt;
(f) take any step to recover goods in the possession or custody of the debtor (whether or not title to the goods is vested in the creditor or the creditor has security over the goods);
(g) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor;
(h) in relation to an agreement with the debtor, including a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.
(2) Whilst a protective certificate remains in force, no bankruptcy petition relating to the debtor—
(a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt,
(b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
(3) Without prejudice to subsections (1) and (2), whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Personal Insolvency Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.”.
Seanad amendment agreed to.
Seanad amendment No. 124:
Section 92: In page 83, lines 36 and 37, to delete subsection (8).
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 126:
Section 94: In page 84, to delete lines 17 to 27 and substitute the following:
“(1) Where a protective certificate has been issued, the personal insolvency practitioner shall as soon as practicable thereafter—
(a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Personal Insolvency Settlement Arrangement and, subject to section 97(2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Personal Insolvency Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement,”.
Seanad amendment agreed to.
Seanad amendment No. 127:
Section 94: In page 84, subsection (1)(b)(ii), line 36, to delete “section 98.” and substitute the following:
“section 98,
and
(c) make a proposal for a Personal Insolvency Arrangement in respect of the debts concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 128:
Section 95: In page 85, subsection (2), lines 28 to 48 and in page 86, lines 1 to 25, to delete paragraphs (c) to (e) and substitute the following:
“(c) where the debtor performs all of his or her obligations specified in a Personal Insolvency Arrangement, he or she shall not stand discharged from the secured debts covered by the Personal Insolvency Arrangement except to the extent provided for under the terms of the Personal Insolvency Arrangement;”.
Seanad amendment agreed to.
Seanad amendment No. 129:
Section 95: In page 87, lines 32 to 39, to delete subsection (4) and substitute the following:
“(4) For the purposes of subsection (2)(g), and without prejudice to subsection (3), in determining whether a debtor would have sufficient income to maintain a reasonable standard of living for the debtor and his or her dependants under the Personal Insolvency Arrangement, regard shall be had to any guidelines issued under section 23.”.
Seanad amendment agreed to.
Seanad amendment No. 130:
Section 96: In page 88, subsection (3), line 12, after “Arrangement” to insert “, and subject to section 97,”.
Seanad amendment agreed to.
Seanad amendment No. 131:
Section 96: In page 88, between lines 15 and 16, to insert the following subsection:
“(4) Unless provision is otherwise made in the Personal Insolvency Arrangement, where an Arrangement provides for payments to a creditor to whom section 89 applies that are greater than the payments that creditor would receive if such payments were made on a pari passu basis, the fees, costs and charges referred to in section 95(2)(h) shall be payable by that creditor in proportion to the payments received by him or her.”.
Seanad amendment agreed to.
Seanad amendment No. 132:
Section 97: In page 88, lines 23 to 34, to delete subsection (1) and substitute the following:
“97.—(1) Unless the creditor concerned otherwise agrees in writing and provision is so made in the terms of the Personal Insolvency Arrangement, a preferential debt shall, subject to subsection (3), be paid in priority by the debtor and where those debts are to be paid in priority the provisions of section 81 of the Bankruptcy Act 1988 shall apply with all necessary modifications.”.
Seanad amendment agreed to.
Seanad amendment No. 133:
Section 97: In page 88, after line 49, to insert the following subsection:
“(5) In this Chapter, “preferential debt” means a debt which, if the debtor concerned were a bankrupt would be a debt—
(a) that by virtue of section 81 of the Bankruptcy Act 1988 is to be paid in priority to all other debts, or
(b) that by virtue of any other statutory provision is to be included among such debts.”.
Seanad amendment agreed to.
Seanad amendment No. 134:
Section 98: In page 90, after line 52, to insert the following subsection:
“(11) Without prejudice to section 99, where a Personal Insolvency Arrangement includes terms providing for a reduction of the amount of debt (including principal, interest and arrears) secured by the security as of the date of the issue of the protective certificate to a specified amount, the terms of the Arrangement shall, unless the relevant secured creditor agrees otherwise, also include a term providing that the amount of such reduction shall:
(a) rank equally with, and abate in equal proportion to, the unsecured debts covered by the Arrangement; and
(b) be discharged with those unsecured debts on completion of the obligations specified in the Arrangement.”.
Seanad amendment agreed to.
Seanad amendment No. 135:
Section 99: In page 91, lines 1 to 48, and in page 92, lines 1 to 39, to delete section 99 and substitute the following:
99.—(1) A Personal Insolvency Arrangement which includes terms providing for the sale or other disposal of the property the subject of the security shall, unless the relevant secured creditor agrees otherwise, include a term providing that the amount to be paid to the secured creditor shall amount at least to—
(a) the value of the security determined in accordance with section 101; or
(b) the amount of the debt (including principal, interest and arrears) secured by the security as of the date of the issue of the protective certificate,
whichever is the lesser.
(2) A Personal Insolvency Arrangement which includes terms providing for—
(a) retention by a secured creditor of the security held by that secured creditor, and
(b) a reduction of the principal sum due in respect of the secured debt due to that secured creditor to a specified amount,
shall not, unless the relevant secured creditor agrees otherwise, specify the amount of the reduced principal sum referred to in paragraph (b) at an amount less than the value of the security determined in accordance with section 101.
(3) A Personal Insolvency Arrangement which includes terms involving—
(a) retention by a secured creditor of the security held by that secured creditor, and
(b) a reduction of the principal sum due in respect of the secured debt due to that secured creditor to a specified amount,
shall, unless the relevant secured creditor agrees otherwise, also include terms providing that any such reduction of the principal sum is subject to the condition that, subject to subsections (4) to (13), where the property the subject of the security is sold or otherwise disposed of for an amount or at a value greater than the value attributed to the security in accordance with section 101, the debtor shall pay to the secured creditor an amount additional to the reduced principal sum calculated in accordance with subsection (4) or such greater amount as is provided for under the terms of the Personal Insolvency Arrangement.
(4) Subject to subsections (5) to (13), the additional amount referred to in subsection (3) shall be the lesser of—
(a) the entire of the difference between the value of the property on disposition and the value attributed to the security in accordance with section 101, and
(b) the amount of the reduction in the principal sum due in respect of the secured debt under the Personal Insolvency Arrangement as referred to in subsection (3)(b).
(5) For the purposes of subsection (4), any portion of the increase in the value of the property attributable to significant improvements made to (or other measures taken which have made a material contribution to the increase in the value of) the property over which the debt is secured which were made subsequent to the valuation of the security for the purposes of the Personal Insolvency Arrangement shall be disregarded in calculating the additional amount payable by the debtor.
(6) Subsection (5) shall not apply unless the secured creditor has given his or her consent in writing to the improvements or other measures concerned, which consent shall not be unreasonably withheld.
(7) For the purposes of subsection (4), any payment or transfer of assets to the secured creditor pursuant to the Personal Insolvency Arrangement properly attributable to a reduction of the principal sum due in respect of the secured debt shall be deducted from the additional amount referred to in subsection (3).
(8) For the purposes of subsection (4), the expenses and costs borne by the debtor in connection with the sale or other disposal of the property shall, to the extent that those costs and expenses are of a type and amount normally payable by the vendor of property of that nature, be deducted from the value attributable to the property on such sale or disposal.
(9) The obligation to pay an additional amount arising by virtue of this section shall not apply where the value of the property on its sale or other disposal is less than the amount of the debt secured by the security (other than any additional amount secured by virtue of subsection (10)) immediately prior to such sale or other disposition of the property.
(10) Any additional amount payable by virtue of this section shall stand secured in the same manner and with the same priority as the principal sum referred to in subsection (3)(b).
(11) The obligation to pay an additional amount arising by virtue of this section shall cease—
(a) on the expiry of the period of 20 years commencing on the date on which the Personal Insolvency Arrangement comes into effect, or
(b) on the day on which the debtor is scheduled or permitted to fully discharge the amount secured by the security (or such later date as may be specified for so doing in the Personal Insolvency Arrangement) and does so discharge his or her indebtedness,
whichever first occurs.
(12) Unless otherwise provided for under the terms of the Personal Insolvency Arrangement, where a property in respect of which subsection (3) applies is the subject of security held by more than one secured creditor—
(a) any additional amounts payable by virtue of this section to the secured creditors shall be paid in order of the priority of the security held by each secured creditor, and
(b) if the security held by a secured creditor is not ranked first in priority, the obligation to pay an additional amount to that creditor arising by virtue of this section shall apply only if and to the extent that the sum of the additional amounts payable to secured creditors holding security with higher ranking priority than the secured creditor concerned is less than the additional amount calculated in accordance with subsection (4).
(13) For the purposes of subsection (3)—
(a) without prejudice to the generality of that subsection, a disposal by a debtor of property the subject of security held by a secured creditor shall include the voluntary grant by the debtor of security over that property to any person other than that secured creditor, including any such grant of security in connection with what is commonly known as a refinancing of the existing secured debt, and
(b) a debtor shall not be considered to dispose of property the subject of security held by a secured creditor where the debtor leases or licenses the property to any person for a term of less than 20 years.”.
Seanad amendment agreed to.
Seanad amendment No. 136:
Section 101: In page 93, lines 45 to 49, in page 94, lines 1 to 48 and in page 95 lines 1 to 11, to delete section 101 and substitute the following:
101.—(1) Subject to the provisions of this section the value of security in respect of secured debt for the purposes of this Chapter shall be the market value of the security determined by agreement between the personal insolvency practitioner, the debtor and the relevant secured creditor.
(2) Where the personal insolvency practitioner does not accept a secured creditor’s estimate of the value, if any, of the security furnished by the secured creditor under section 98, the debtor, the personal insolvency practitioner and the secured creditor shall in good faith endeavour to agree the market value for the security having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5).
(3) In the absence of agreement as to the value of the security, the personal insolvency practitioner, the debtor and the relevant secured creditor shall appoint an appropriate independent expert to determine the market value for the security having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5).
(4) Where the personal insolvency practitioner, the debtor and the secured creditor are unable to agree as to the independent expert to be appointed under subsection (3) the issue may be referred by any of them to the Insolvency Service which shall appoint such independent expert as it considers appropriate to determine the market value of the security concerned having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5), and the valuation carried out by such expert shall be binding on the personal insolvency practitioner, the debtor and the secured creditor concerned.
(5) The matters referred to in subsections (2) to (4) as the matters specified in subsection (5) are:
(a) the type of property the subject of the security;
(b) the priority of the security;
(c) the costs of disposing of the property the subject of the security;
(d) the price at which similar property to that which is the subject of the security has been sold within the 12 months prior to the issue of the protective certificate;
(e) the date of the most recent valuation or transaction with respect to the property the subject of the security and the value attributed to the property in respect of that valuation or transaction;
(f) the value attributed to the property the subject of the security in the debtor’s accounting records (if any);
(g) the value attributed to the security in the secured creditor’s accounting records (if any);
(h) whether the market for the type of property the subject of the security is or has been subject to significant changes in conditions;
(i) data made available to the public by the Property Services Regulatory Authority pursuant to Part 12 of the Property Services (Regulation) Act 2011 and which relate to property similar to the property the subject of the security; and
(j) any relevant statistical index relating to the valuation of the same or similar types of property as the property the subject of the security.
(6) In this section “market value”—
(a) as respects property the subject of security for a secured debt, means the price which that property might reasonably be expected to fetch on a sale in the open market;
(b) as respects security for a secured debt, means the amount that might reasonably be expected to be available to discharge that secured debt, in whole or in part, following realisation of the security by the secured creditor concerned and, where permitted by the terms of the security or otherwise, after deducting all relevant costs and expenses in connection with the realisation of the security.
(7) The creditor concerned and the personal insolvency practitioner shall each pay 50 per cent of the costs of carrying out the valuation by the independent expert pursuant to subsection (3) or (4).
(8) The amount paid by the personal insolvency practitioner pursuant to subsection (7) shall be treated as an outlay for the purposes of the Personal Insolvency Arrangement.
(9) For the purposes of this section, the personal insolvency practitioner, the debtor, the secured creditor concerned and any independent expert shall be entitled to assume, in the absence of any clear evidence to the contrary, that the market value of the security which is a first charge is the lesser of—
(a) an amount equal to the market value of the property the subject of the security, or
(b) unless the nature of the security and the property concerned would make it unreasonable to do so, an amount equal to the market value of the property the subject of the security less an adjustment to that value as respects the costs and expenses which would normally be necessarily incurred by a secured creditor in the realisation of a security of a similar kind to that of the security concerned, provided that the adjustment is no greater than 10 per cent of the market value of the property the subject of the security.”.
Seanad amendment agreed to.
Seanad amendment No. 137:
Section 102: In page 95, lines 18 to 38, to delete subsections (2) to (4) and substitute the following:
“(2) When calling a creditors’ meeting under this section, the personal insolvency practitioner shall do so in accordance with any regulations made under section 107 and, in any case, shall—
(a) give each creditor at least 14 days written notice of the meeting and the date on which, and time and place at which, the meeting will be held,
(b) ensure that the notice referred to in paragraph (a) is accompanied by a copy of each of the documents referred to in section 103, and
(c) lodge a copy of the notice referred to in paragraph (a) and the documents referred to in section 103 with the Insolvency Service.
(3) Where a creditors’ meeting referred to in subsection (1) does not take place before the expiry of the protective certificate, the Personal Insolvency Arrangement procedure shall be deemed to have come to an end.”.
Seanad amendment agreed to.
Seanad amendment No. 138:
Section 103: In page 95, subsection (1), line 39, to delete “section 102(3)(b)” and substitute “section 102(2)(b)”.
Seanad amendment agreed to.
Seanad amendment No. 139:
Section 103: In page 96, subsection (2), line 37, to delete “section 102(3)” and substitute “section 102(2)”.
Seanad amendment agreed to.
Seanad amendment No. 140:
Section 104: In page 96, lines 50 and 51 and in page 97, lines 1 to 25, to delete section 104 and substitute the following:
104.—(1) A vote held at a creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement shall be held in accordance with this section, section 106 and regulations made under section 107.
(2) Subject to subsection (1), the voting rights exercisable by a creditor at a creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.
(3) In the case of a secured debt, where:
(a) the value of security held by a creditor who is a secured creditor is determined, pursuant to section 101, to be less than the amount of the secured debt due to the creditor on the day the protective certificate is issued; and
(b) the proposed Personal Insolvency Arrangement provides for all or part (“relevant portion”) of that secured debt to:
(i) rank equally with, and abate in equal proportion to, the unsecured debts covered by the Arrangement; and
(ii) be discharged with those unsecured debts on completion of the obligations specified in the Arrangement,
then, the relevant portion of that secured debt shall, for the purposes of this section (other than this subsection), section 106 and regulations made under section 107, be treated as unsecured and the creditor concerned may vote in respect of the relevant portion of that debt as an unsecured creditor.
(4) Where a secured creditor consents in writing to the inclusion of terms in the Personal Insolvency Arrangement providing for the surrender to the debtor of his or her security upon the coming into effect of the Arrangement, that creditor shall be treated as an unsecured creditor for the purposes of this section (other than this subsection), section 106 and regulations made under section 107 and shall only be entitled to vote at a creditors’ meeting as an unsecured creditor.
(5) A creditor who is a connected person as respects the debtor may not vote in favour of a proposal for a Personal Insolvency Arrangement at a creditors’ meeting but that creditor may vote against the proposal.
(6) Where only one creditor is entitled to vote at the creditors’ meeting (whether in respect of one or more debts), the requirement to hold a creditors’ meeting shall be satisfied where the creditor concerned notifies the personal insolvency practitioner in writing of that creditor’s approval or otherwise of the proposal for a Personal Insolvency Arrangement.
(7) Subject to any regulations made under section 107, only the person who appears to the personal insolvency practitioner to be the owner of the debt (or an agent acting on behalf of that person) shall be entitled to receive notices required to be sent to a creditor under this Chapter or to vote at the creditors’ meeting.
(8) Where no creditor votes, the proposed Personal Insolvency Arrangement shall be deemed to have been approved under this section.
(9) Where on the taking of a vote at a creditors’ meeting held for the purpose of considering a proposal for a Personal Insolvency Arrangement the proposal is not approved in accordance with subsection (1), the Personal Insolvency Arrangement procedure shall terminate and the protective certificate issued under section 91 shall cease to have effect.”.
Seanad amendment agreed to.
Seanad amendment No. 141:
Section 105: In page 97, subsection (2), line 31, after “with” to insert “any”.
Seanad amendment agreed to.
Seanad amendment No. 142:
Section 105: In page 97, lines 46 to 48 and in page 98, lines 1 to 6, to delete subsection (5) and substitute the following:
“(5) Where the personal insolvency practitioner prepares an amended proposal for a Personal Insolvency Arrangement pursuant to subsection (4) he or she shall—
(a) notify the debtor of the date on which, and time and place at which, the adjourned meeting will be held,
(b) at least 7 days before the day of the adjourned meeting, unless all of the creditors agree in writing to receive a shorter period of notice, notify each creditor
of the date on which, and time and place at which, the adjourned meeting will be held,
(c) ensure that the notices referred to in paragraphs (a) and (b) are accompanied by a copy of the amended proposal, and
(d) lodge a copy of the notice referred to in paragraph (b) and a copy of the amended proposal with the Insolvency Service.”.
Seanad amendment agreed to.
Seanad amendment No. 143:
Section 106: In page 98, lines 11 to 45 and in page 99, lines 1 to 15, to delete section 106 and substitute the following:
106.—(1) Subject to subsection (2) a proposed Personal Insolvency Arrangement shall be considered as having been approved by a creditors’ meeting held under this Chapter where—
(a) a majority of creditors representing not less than 65 per cent of the total amount of the debtor’s debts due to the creditors participating in the meeting and
voting have voted in favour of the proposal,
(b) creditors representing more than 50 per cent of the value of the secured debts due to creditors who are—
(i) entitled to vote, and
(ii) have voted,
at the meeting as secured creditors have voted in favour of the proposal, and
(c) creditors representing more than 50 per cent of the amount of the unsecured debts of creditors who—
(i) are entitled to vote, and
(ii) have voted,
at the meeting as unsecured creditors have voted in favour of the proposal.
(2) For the purposes of subsection (1)(b) the value of a secured debt shall be—
(a) the market value of the security concerned determined in accordance with section 101, or
(b) the amount of the debt secured by the security on the day the protective certificate is issued,
whichever is the lesser.”.
Seanad amendment agreed to.
Seanad amendment No. 144:
Section 111: In page 100, lines 28 to 48 and in page 101, lines 1 to 8, to delete subsections (1) to (6) and substitute the following:
“(1) Where—
(a) no objection is lodged by a creditor with the appropriate court within 14 days of the giving of the notice referred to in section 108, or
(b) an objection is lodged with the appropriate court and the matter is determined by the court on the basis that the objection should not be allowed, the appropriate court shall proceed to consider, in accordance with this section, whether to approve the coming into effect of the Personal Insolvency Arrangement.
(2) For the purposes of its consideration under subsection (1), the appropriate court shall consider the copy of the Personal Insolvency Arrangement furnished to it under section 109(1) and, subject to subsection (3)—
(a) shall approve the coming into effect of the Arrangement, if satisfied that the—
(i) eligibility criteria specified in section 88 have been satisfied,
(ii) mandatory requirements referred to in section 95(2) have been complied with,
(iii) Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than a permitted debt) or otherwise affect such a debt, and
(iv) requisite proportions of creditors have approved the proposal for a Personal Insolvency Arrangement,
and
(b) if not so satisfied, shall refuse to approve the coming into effect of the Personal Insolvency Arrangement.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (1), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) For the purposes of subsection (2), the court may accept—
(a) a certificate issued by the Insolvency Service certifying that the eligibility criteria specified in section 88 have been satisfied as evidence that such eligibility criteria have been satisfied, and
(b) the certificate issued by the personal insolvency practitioner concerned pursuant to section 108(1)(a) as evidence that the requisite proportions of creditors have approved the proposal for a Personal Insolvency Arrangement.
(6) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) approves or refuses to approve the coming into effect of the Personal Insolvency Arrangement under this section, or
(b) decides to hold a hearing referred to in subsection (3).
(7) On receipt of a notification under subsection (6) of the approval of the coming into effect of the Personal Insolvency Arrangement, the Insolvency Service shall register the Personal Insolvency Arrangement in the Register of Personal Insolvency Arrangements.”.
Seanad amendment agreed to.
Seanad amendment No. 145:
Section 112: In page 101, subsection (2)(b), lines 22 to 24, to delete all words from and including “concerned,” in line 22 down to and including “Arrangement.” in line 24 and substitute “concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 146:
Section 112: In page 101, lines 25 to 43 and in page 102, lines 1 to 5, to delete subsection (3) and substitute the following:
“(3) Where a Personal Insolvency Arrangement is in effect, a creditor who is bound by it shall not, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to enforce security held by the creditor;
(f) take any step to recover goods in the possession or custody of the debtor (whether or not title to the goods is vested in the creditor or the creditor has security over the goods);
(g) contact the debtor regarding payment of the specified debt otherwise than at the request of the debtor;
(h) in relation to an agreement with the debtor, including a security agreement, by reason only that the debtor is insolvent or that a Personal Insolvency Arrangement is in effect—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.”.
Seanad amendment agreed to.
Seanad amendment No. 147:
Section 112: In page 102, between lines 33 and 34, to insert the following subsection:
“(10) Notwithstanding subsections (3) and (4), the fact that a Personal Insolvency Arrangement is in effect in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3)* or (4) as respects another person who has guaranteed the specified debts concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 148:
Section 113: In page 103, subsection (5), line 6, to delete “the debtor has” and substitute “the debtor has defaulted”.
Seanad amendment agreed to.
Seanad amendment No. 149:
Section 113: In page 103, subsection (10), line 36, after “made” to insert the following:
“under this Act and in accordance with the Personal Insolvency Arrangement”.
Seanad amendment agreed to.
Seanad amendments Nos. 150, 165 to 169, inclusive, and 171 are related and will be discussed together by agreement.
Seanad amendment No. 150:
Section 114: In page 104, subsection (4), line 10, to delete “€1,000” and substitute “€650”.
These amendments deal with Chapter 5, Part 3, which provides for offences under the Bill. The purpose of Seanad amendment No. 165 is to provide that section 122, which deals with breaches of a debtor's obligations under a debt relief notice will be broadened to also cover breach of obligations under a debt settlement or a personal insolvency arrangement. Seanad amendments Nos. 166 and 168 are drafting amendments to sections 123 and 124, first to correct cross-references to other sections of the Bill and, second, to prevent any possible erroneous interpretation of those provisions as meaning that a person who commits an offence under those sections can only be prosecuted while the insolvency arrangement remains in effect and not after it ends or is terminated, even if the wrongdoing only comes to light then. Amendment No. 167 aims to provide more clarity as to what is intended to be published by section 124, which deals with fraudulent disposal of property by a debtor.
I ask the House again notes a slight typographical correction to amendment No. 167, which is that the reference in subsection (2) to subsection (4) should in fact be a reference to subsection (3). Seanad amendment No. 150 reduces the amount of credit the debtor may seek without informing the creditor of the fact he is party to a personal insolvency arrangement to €650. This is the same amount as has been provided for in the debt relief notice and debt settlement arrangement. The purpose of Seanad amendment No. 169 is to bring the offence provision in section 125 into line with those restrictions on a debtor who seeks to obtain credit of more than €650. Seanad Amendment No. 171 is proposed to amendment section 127 to increase the fine for a summary offence under the Bill to a class A fine, which means a fine not exceeding €5,000.
Seanad amendment agreed to.
Seanad amendment No. 151:
Section 115: In page 104, subsection (3), lines 36 to 39, to delete paragraph (a) and substitute the following:
“(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:
(i) income tax;
(ii) social insurance contributions;
(iii) payments made by him or her in respect of excluded debts;
(iv) payments made by him or her in respect of excludable debts that are not permitted debts;
(v) such other levies and charges on income as may be prescribed,
or”.
Seanad amendment agreed to.
Seanad amendment No. 152:
Section 115: In page 104, lines 45 to 50 and in page 105 lines 1 to 10, to delete subsection (4) and substitute the following:
“(4) In order that a variation of a Personal Insolvency Arrangement take effect, in addition to the consent in writing of the debtor referred to in subsection 2, the variation shall be approved at a creditors’ meeting where—
(a) a majority of creditors representing not less than 65 per cent of the total amount of the debtor’s debts remaining due to the creditors participating in the meeting and voting have voted in favour of the proposal,
(b) creditors representing more than 50 per cent of the value of the secured debts due to creditors who are—
(i) entitled to vote, and
(ii) have voted,
at the meeting as secured creditors have voted in favour of the proposal, and
(c) creditors representing more than 50 per cent of the amount of the unsecured debts of creditors who—
(i) are entitled to vote, and
(ii) have voted,
at the meeting as unsecured creditors have voted in favour of the proposal.”.
Seanad amendment agreed to.
Seanad amendment No. 153:
Section 115: In page 105, subsection (6), line 17, to delete “sections 106 to 111” and substitute “sections 105 to 111”.
Seanad amendment agreed to.
Seanad amendment No. 154:
Section 115: In page 105, to delete lines 38 to 44 and substitute the following:
“(9) For the purposes of subsection (4)(b) the value of a secured debt shall be—
(a) the market value of the security concerned determined in accordance with section 101, or
(b) the amount of the debt secured by the security on the day on which the vote takes place,
whichever is the lesser.”.
Seanad amendment agreed to.
Seanad amendment No. 155:
Section 116: In page 106, subsection (1)(b), line 11, to delete “followed” and substitute “complied with”.
Seanad amendment agreed to.
Seanad amendment No. 156:
Section 116: In page 106, subsection (1)(f), line 21, to delete “Act” and substitute “Act, which causes a material detriment to the creditor”.
Seanad amendment agreed to.
Seanad amendment No. 157:
Section 116: In page 106, subsection (1)(g), line 23, to delete “within the meaning of subsection (2)”.
Seanad amendment agreed to.
Seanad amendment No. 158:
Section 116: In page 106, subsection (1), lines 28 to 32, to delete paragraph (h) and substitute the following:
“(h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).”.
Seanad amendment agreed to.
Seanad amendment No. 159:
Section 116: In page 106, lines 33 to 49 and in page 107, lines 1 to 4, to delete subsections (2) and (3).
Seanad amendment agreed to.
Seanad amendment No. 160:
Section 117: In page 107, between lines 4 and 5, to insert the following new section:
117.—(1) Where, as respects a debtor who has entered into a Personal Insolvency Arrangement which is in force, a creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement, the creditor or personal insolvency practitioner may make an application to the appropriate court for relief in accordance with this section.
(2) The reference to the debtor having made contributions to a relevant pension arrangement shall be construed as a reference to contributions made by the debtor at any time within 3 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89.
(3) Where the appropriate court considers that having regard in particular to the matters referred to in subsection (4) the contributions to a relevant pension arrangement were excessive it may:
(a) direct that such part of the contribution concerned (less any tax required to be deducted) be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution amongst the creditors of the debtor, and
(b) make such other order as the court deems appropriate, including an order as to the costs of the application.
(4) The matters referred to in subsection (3) as respects the contributions made by the debtor to a relevant pension arrangement are:
(a) whether the debtor made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the debtor made the contribution concerned;
(b) whether the debtor was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the debtor or a person who as respects the debtor is a connected person could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the debtor in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89 including the percentage of total income of the debtor concerned which such contributions represent in each of those years;
(e) the age of the debtor at the relevant times;
(f) the percentage limits which applied to the debtor in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89, and
(g) the extent of provision made by the debtor in relation to any relevant pension arrangement prior to the making of the contributions concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 161:
Section 117: In page 107, subsection (2), lines 38 and 39, to delete paragraph (b) and substitute the following:
“(b) at no time during that 3 month period were any obligations in respect of those payments discharged.”.
Seanad amendment agreed to.
Seanad amendment No. 162:
Section 118: In page 108, subsection (1), line 4, after “Service” to insert “and the debtor”.
Seanad amendment agreed to.
Seanad amendment No. 163:
Section 118: In page 108, between lines 5 and 6, to insert the following subsection:
“(2) For the purposes of subsection (1), a debtor is in arrears with his or her payments for a period of 6 months on a given date if—
(a) at the beginning of the 6 month period ending immediately before that date, one or more than one payment in respect of a debt became due and payable by the debtor under the Personal Insolvency Arrangement, and
(b) at no time during that 6 month period were any obligations in respect of those payments discharged.”.
Seanad amendment agreed to.
Seanad amendment No. 164:
Section 119: In page 108, subsection (1), line 11, to delete “has been deemed to come to an end, has failed” and substitute “has been deemed to have failed”.
Seanad amendment agreed to.
Seanad amendment No. 165:
Section 122: In page 109, lines 5 to 13, to delete section 122 and substitute the following:
122.—(1) A person who is a specified debtor under Chapter 1 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 33, or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 1, knowing the information to be false or misleading in a material respect.
(2) A person who is party, as a debtor, to a Debt Settlement Arrangement under Chapter 3 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 76(3) or 76(6), or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 3, knowing the information to be false or misleading in a material respect.
(3) A person who is party, as a debtor, to a Personal Insolvency Arrangement under Chapter 4 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 114(3) or 114(6), or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 4, knowing the information to be false or misleading in a material respect.”.
Seanad amendment agreed to.
Seanad amendment No. 166:
Section 123: In page 109, line 41 and in page 110 lines 1 to 10 to delete subsection (3) and substitute the following:
“(3) This section applies to a person—
(a) on whose behalf an application under section 26, 54 or 89 is made,
(b) who is a specified debtor under Chapter 1,
(c) who is party, as a debtor, to a Debt Settlement Arrangement which is in effect, or
(d) who is party, as a debtor, to a Personal Insolvency Arrangement which is in effect.”.
Seanad amendment agreed to.
Seanad amendment No. 167:
Section 124: In page 110, lines 26 to 28 to delete subsection (2) and substitute the following:
“(2) Subject to subsection (3), a person commits an act referred to in this subsection where he or she—
(a) makes or causes to be made a gift of any of his or her property to another person,
(b) otherwise makes or causes to be made any transfer of any of his or her property, on terms that provide for him or her to receive no consideration, to another person, or
(c) enters into a transaction with another person involving the transfer of any of his or her property to that other person or to a third person (whether or not the third person is a party to the transaction), where the value of the property concerned, in money or money’s worth, is significantly greater than the value, in money or money’s worth, of the consideration provided by the other person.
(3) Subsection (2) does not apply to property of a value of less than €400.”.
Seanad amendment agreed to.
Seanad amendment No. 168:
Section 124: In page 110, lines 29 to 39, to delete subsection (3) and substitute the following:
“(3) This section applies to a person—
(a) on whose behalf an application under section 26, 54 or 89 is made,
(b) who is a specified debtor under Chapter 1,
(c) who is party, as a debtor, to a Debt Settlement Arrangement which is in effect, or
(d) who is party, as a debtor, to a Personal Insolvency Arrangement which is in effect.”.
Seanad amendment agreed to.
Seanad amendment No. 169:
Section 125: In page 110, subsection (1), line 42, to delete “€1,000” and substitute “€650”.
Seanad amendment agreed to.
Seanad amendment No. 170:
Section 126: In page 111, lines 21 to 25 to delete section 126 and substitute the following:
126.—(1) A person shall not—
(a) act as an approved intermediary,
(b) hold himself or herself out as available to act as an approved intermediary, or
(c) represent himself or herself by advertisement as available to act as an approved intermediary,
unless that person is authorised to so act by virtue of this Act.
(2) A person who acts in contravention of subsection (1) is guilty of an offence.”.
Seanad amendment agreed to.
Seanad amendment No. 171:
Section 127: In page 111, subsection (2)(a), line 30, to delete “Class C” and substitute “Class A”.
Seanad amendment agreed to.
Seanad amendment No. 172:
Section 128: In page 112, lines 39 to 41, to delete subsection (7).
Seanad amendment agreed to.
Seanad amendment No. 173:
Section 129: In page 112, subsection (1), line 45, to delete “receiving the notice” and substitute the following:
“receiving the notice or the appropriate court otherwise directs or permits”.
Seanad amendment agreed to.
Seanad amendment No. 174:
Section 129: In page 113, subsection (1), lines 1 to 4, to delete paragraph (a), and substitute the following:
“(a) where a person is a natural person—
(i) by giving it to the person personally, or
(ii) by sending it by prepaid post, or otherwise delivering it, in a letter addressed to the person at the person’s usual or last known place of residence or business,
or”.
Seanad amendment agreed to.
Seanad amendment No. 175:
Section 129: In page 113, to delete lines 8 to 13 and substitute the following:
“(ii) by leaving it at the registered office of the body, or
(iii) by sending it by prepaid post in a letter addressed to the body at that registered office.”.
Seanad amendment agreed to.
Seanad amendment No. 176:
Section 130: In page 113, between lines 30 and 31, to insert the following subsection:
“(2) Notwithstanding any provision of the Credit Union Act 1997, savings (within the meaning of that Act) of a debtor in a credit union shall be subject to set off in accordance with subsection (1) against a debt owed by the debtor to the credit union.”.
Seanad amendment agreed to.
Seanad amendment No. 177:
Section 131: In page 113, subsection (1), line 31, to delete “The Minister” and substitute the following:
“The Insolvency Service, with the consent of the Minister”.
Seanad amendment agreed to.
Seanad amendment No. 178:
Section 131: In page 113, subsection (2), line 43, to delete “the Minister” and substitute “the Insolvency Service”.
Seanad amendment agreed to.
Seanad amendment No. 179:
Section 131: In page 114, subsection (2)(c), line 7, to delete “that information” and substitute “that personal data and information”.
Seanad amendment agreed to.
Seanad amendment No. 180:
Section 131: In page 114, subsection (2)(c), lines 11 and 12, to delete “authorised intermediary” and substitute “approved intermediary”.
Seanad amendment agreed to.
Seanad amendment No. 181:
Section 133: In page 114, subsection (1)(b)(i), line 38, to delete “98/26/EC4” and substitute “98/26/EC”.
Seanad amendment agreed to.
Seanad amendment No. 182:
Section 134: In page 115, before section 134, but in Part 3, to insert the following new section:
134.—(1) For the purposes of Chapter 1, where the amount of a debt owed to a creditor is owed in a currency other than the currency of the State, the amount of the debt shall be converted into the currency of the State at the rate published by the Central Bank of Ireland or the European Central Bank on the application date within the meaning of section 23.
(2) For the purposes of Chapters 3 and 4, where the amount of a debt owed to a creditor is owed in a currency other than the currency of the State, the amount of the debt shall be converted into the currency of the State at the rate published by the Central Bank of Ireland or the European Central Bank on the date of the issue of the protective certificate under the Chapter concerned.”.
Seanad amendment agreed to.
Seanad amendment No. 183:
Section 134: In page 115, before section 134, but in Part 3, to insert the following new section:
135.—(1) Notwithstanding any other provision of this Act, or any other enactment or rule of law, rules of court may, in relation to any proceedings under this Act before an appropriate court, make provision for—
(a) the lodgement or filing of a document with, and making of an application to, the court by transmitting the document or application by electronic means to the court office,
(b) the issue by the court or court office, by transmitting the document concerned by electronic means to an appropriate person, of any of the following:
(i) a summons, civil bill or other originating document,
(ii) a judgment, decree or other order or determination of a court (including any judgment, decree or other order or determination entered in or issuing from a court office), or
(iii) any other document required under this Act to be issued by or on behalf of the court or court office concerned,
or
(c) the transmission by the court or court office by electronic means of any other document or information required under this Act to be transmitted by or on behalf of a court or court office.
(2) Where rules of court referred to in subsection (1) provide for the transmission of a document by electronic means, such rules may, in addition:
(a) provide that such transmission is subject to such conditions and such exceptions as may be specified in the rules,
(b) in relation to the transmission of a document referred to in subsection (1)(a), require that—
(i) such a document be authenticated, and
(ii) the identity of the person transmitting such a document be verified,
in such manner as may be specified in the rules, and
(c) specify, in relation to the transmission of such a document by, or to, the Insolvency Service, whether such transmission is in place of, or is an alternative to, any other method by which such document could be filed, lodged, issued or transmitted, or such application could be made, as the case may be.
(3) Rules of court may provide that, where a document that is required by this Act to be furnished to, or lodged or filed with, the appropriate court, is, in accordance with rules of court referred to in subsection (1), furnished to, or lodged or filed with, that court by electronic means—
(a) a copy of that document transmitted by electronic means and displayed in readable form, or
(b) a printed version of such a copy,
shall be treated as the original of that document.
(4) Rules of court made in accordance with this section may make different provision for the transmission of documents by, and to, the Insolvency Service to the provision made for the transmission of documents by, and to, other persons.
(5) References in this Act to the—
(a) furnishing of a document to,
(b) lodgement or filing of a document with,
(c) making of an application to,
(d) transmission of a document to or by, or
(e) issue of a document by,
the appropriate court shall be construed as including a reference to the performance of such action by electronic means, where this is provided for in rules of court referred to in subsection (1).
(6) In this section—
“appropriate person”, in relation to a document referred to in subsection (1)(b), means—
(a) the Insolvency Service, where it applied to the appropriate court for the issue of that document,
(b) the person who applied to the appropriate court for the issue of that document,
(c) where applicable, the approved intermediary or personal insolvency practitioner of a person referred to in paragraph (b), or
(d) where applicable, a solicitor acting on behalf of an approved intermediary or personal insolvency practitioner referred to in paragraph (c);
“court office” means—
(a) in relation to an appropriate court, an office of, or attached to, that court and, where the appropriate court is the Circuit Court, means an office referred to in section 5(3), or
(b) any office of the Courts Service designated by the Courts Service for the purpose of receiving documents or applications, or issuing documents, by electronic means for the purposes of this Act.”.
Seanad amendment agreed to.
Seanad amendment No. 184:
Section 134: In page 115, before section 134, but in Part 3, to insert the following new section:
136.—(1) The Minister shall, in consultation with the Minister for Finance, not later than 3 years after the commencement of this Part, commence a review of its operation.
(2) A review under subsection (1) shall be completed not later than one year after its commencement.
(3) Having completed the review the Minister in consultation with the Minister for Finance shall prepare a report setting out the assessment arrived at and the reasons for that assessment.
(4) The Minister shall lay a copy of a report prepared under subsection (3) before each House of the Oireachtas as soon as reasonably practicable after it has been completed.”.
Seanad amendment agreed to.
Seanad amendment No. 185:
Section 134: In page 115, between lines 10 and 11, to insert the following:
“ ‘trustee’ means a person appointed as trustee under Part V;”.
Seanad amendment agreed to.
Seanad amendment No. 186:
Section 135: In page 115, before section 135, to insert the following new section:
135.—Section 7 of the Bankruptcy Act 1988 is amended in subsection (1) by the insertion after paragraph (c) of the following paragraphs:
“(ca) the individual has been subject as a debtor to a Debt Settlement Arrangement which has been terminated under section 79 of the Personal Insolvency Act 2012;
(cb) the individual has been subject as a debtor to a Debt Settlement Arrangement which under section 80 of the Personal Insolvency Act 2012 is deemed to have failed;
(cc) the individual has been subject as a debtor to a Personal Insolvency Arrangement which has been terminated under section 117 of the Personal Insolvency Act 2012;
(cd) the individual has been subject as a debtor to a Personal Insolvency Arrangement which under section 118 of the Personal Insolvency Act 2012 is deemed to have failed;”.
Seanad amendment agreed to.
Seanad amendment No. 187:
Section 138: In page 116, lines 31 and 32, to delete “value of assets” and substitute “value of the assets”.
Seanad amendment agreed to.
Seanad amendment No. 188:
Section 138: In page 116, lines 35 and 36, to delete all words from and including “the” where it firstly occurs in line 35 down to and including “Court” in line 36 and substitute the following:
“the contents of any statement of affairs of the debtor filed with the Court”.
Seanad amendment agreed to.
Seanad amendment No. 189:
Section 138: In page 116, line 47, to delete “in the State” and substitute the following:
“in the State.
(4) For the purposes of subsection (2), the Court may order the bankrupt to attend and make full disclosure of his assets and liabilities to the Court by way of a statement of affairs filed with the Court.”.
Seanad amendment agreed to.
Seanad amendment No. 190:
Section 139: In page 117, lines 7 and 8, to delete all words from and including “is” in line 7 down to and including “creditors” in line 8 and substitute the following:
“is unable to meet his engagements with his creditors and that the requirements of section 11(4) and (5) have been complied with”.
Seanad amendment agreed to.
Seanad amendment No. 191:
Section 139: In page 117, lines 11 and 12, to delete “value of assets” and substitute “value of the assets”.
Seanad amendment agreed to.
Seanad amendment No. 192:
Section 141: In page 117, before section 141, to insert the following new section:
141.—The Bankruptcy Act 1988 is amended by the insertion, after section 44, of the following sections:
44A.—(1) Subject to subsection (2), where a person is adjudicated bankrupt, and he or she is, or may become entitled to, payments under a relevant pension arrangement, assets relating to the arrangement (other than payments already received by the bankrupt, or that the bankrupt was entitled to receive, under the arrangement) shall not vest in the Official Assignee for the benefit of the creditors of the bankrupt.
(2) Where a bankrupt has an interest in or entitlement under a relevant pension arrangement which would, if the bankrupt performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income,
in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that bankrupt shall be considered as being in receipt of such income, and such amount of money shall vest in the Official Assignee or the trustee in bankruptcy.
(3) Subsection (2) applies where—
(a) the bankrupt is entitled at the date of being adjudicated a bankrupt to perform the act or exercise the option referred to in subsection (2),
(b) was entitled at any time before the date of the adjudication, to perform the act or exercise the option referred to in subsection (2), but had not performed the act or exercised the option, or
(c) will become entitled within 5 years of the date of the adjudication to perform the act or exercise the option referred to in subsection (2).
(4) Where subsection (2)
applies, the Official Assignee or the trustee in bankruptcy may where he or she considers that it would be beneficial to the creditors of the bankrupt to do so, perform an act or exercise an option referred to in subsection (2) in place of the bankrupt.
(5) In this section and in sections 44B and 85D a reference to a relevant pension arrangement means:
(a) a retirement benefits scheme, within the meaning of section 771 of the Taxes Consolidation Act 1997, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1 of Part 30 of that Act;
(b) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784 of the Taxes Consolidation Act 1997;
(c) a PRSA contract, within the meaning of section 787A of the Taxes Consolidation Act 1997, in respect of a PRSA product, within the meaning of that section;
(d) a qualifying overseas pension plan within the meaning of section 787M of the Taxes Consolidation Act 1997;
(e) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004;
(f) a statutory scheme, within the meaning of section 770(1) of the Taxes Consolidation Act 1997, other than a public service pension scheme referred to in paragraph (e);
(g) such other pension arrangement as may be prescribed by the Minister, following consultation with the Ministers for Finance, Social Protection and Public Expenditure and Reform.
44B.—(1) Where, on application by the Official Assignee or the trustee in bankruptcy, the Court is satisfied that the bankrupt, or a person on his or her behalf, has within the 3 years prior to the adjudication made contributions to a relevant pension arrangement under which the bankrupt is, or may become entitled to, payments and which contributions—
(a) were excessive in view of the bankrupt’s financial circumstances when those contributions were made, and
(b) had the effect of—
(i) materially contributing to the bankrupt’s inability to pay his or her debts, or
(ii) substantially reducing the sum available for distribution to the creditors,
the Court may make such order in relation to the relevant pension arrangement as it considers appropriate for the purpose of ensuring that the contributions which the Court considers to be excessive or any part of such contributions can be vested in the Official Assignee or the trustee in bankruptcy to be made available for distribution to the creditors.
(2) In considering an application under subsection (1) and in determining whether or not the contributions made by the bankrupt to a relevant pension arrangement were excessive the court may have regard to all the financial circumstances of the bankrupt and in particular:
(a) whether the bankrupt made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the bankrupt made the contribution concerned;
(b) whether the bankrupt was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the bankrupt or a person who as respects the bankrupt is a relative could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the bankrupt in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the adjudication including the percentage of total income of the bankrupt which such contributions represent in each of those years;
(e) the age of the bankrupt at the relevant times;
(f) the percentage limits which applied to the bankrupt in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement; in each of the 6 years prior to the adjudication; and
(g) the extent of provision made by the bankrupt in relation to any relevant pension arrangement prior to the making of the contributions concerned.
(3) In this section “relative” as respects a person, means a brother, sister, parent, spouse or civil partner of the person or a child of the person or of the spouse or civil partner.”.
I should point out that under Seanad amendment No. 192, Seanad amendment No. 167 is dealt with later in the text. It is important to note that, although we did not speak to that issue. That is a correction of Seanad amendment No. 192. Apparently there is a semicolon out of place and we are anxious to ensure the semicolon is in the appropriate place.
Seanad amendment agreed to.
Seanad amendment No. 193:
Section 145: In page 118, before section 145, to insert the following new section:
145.—The Bankruptcy Act 1988 is amended by the insertion, after section 65, of the following new section:
65A.—An application for an order under section 65 shall not be made after the coming into operation of this section, but this section shall not operate to prevent an application under section 65(2) where an order under section 65(1) is in force on the coming into operation of this section.”.
Seanad amendment agreed to.
Seanad amendment No. 194:
Section 146: In page 118, to delete lines 37 to 39 and substitute the following:
“(5) A person whose bankruptcy has been discharged by virtue of this section may apply to the Official Assignee for the issue of a certificate of discharge from bankruptcy.
(6) In this section and in sections 85A to 85D ‘bankrupt’ includes personal representatives and assigns.”.
Seanad amendment agreed to.
Seanad amendment No. 195:
Section 146: In page 118, line 40, to delete “Official Assignee or a creditor” and substitute the following:
“Official Assignee, the trustee in bankruptcy or a creditor”.
Seanad amendment agreed to.
Seanad amendment No. 196:
Section 146: In page 118, line 45, to delete “Official Assignee or the creditor” and substitute the following:
“Official Assignee, the trustee in bankruptcy or the creditor”.
Seanad amendment agreed to.
Seanad amendment No. 197:
Section 146: In page 119, line 10, to delete “by a creditor” and substitute “by the trustee in bankruptcy or a creditor”.
Seanad amendment agreed to.
Seanad amendment No. 198:
Section 146: In page 120, between lines 8 and 9, to insert the following:
“(3) A person whose bankruptcy has been discharged by virtue of this section may apply to the Official Assignee for the issue of a certificate of discharge from bankruptcy.”.
Seanad amendment agreed to.
Seanad amendment No. 199:
Section 146: In page 120, between lines 22 and 23, to insert the following:
“(3) A person whose bankruptcy has been annulled may apply to the Official Assignee for the issue of a certificate that the bankruptcy has been annulled.”.
Seanad amendment agreed to.
Seanad amendment No. 200:
Section 146: In page 120, to delete lines 23 to 49 and in page 121, to delete lines 1 to 3 and substitute the following:
(1) The Court may, on application being made to it by the Official Assignee or the trustee in bankruptcy, make an order requiring a bankrupt to make payments to the Official Assignee or the trustee in bankruptcy from his income or other assets for the benefit of his creditors (a ‘bankruptcy payment order’).
(2) An application for a bankruptcy payment order may not be made after the bankrupt has been discharged from bankruptcy, but where an application for such an order is made before the discharge of the bankrupt, the Court may make a bankruptcy payment order after the date of discharge as if the bankrupt had not been so discharged.
(3) An order made under subsection (1) shall have effect for no longer than 5 years from the date of the order coming into operation, and where, during the order’s validity, the court has varied the order under subsection (5) such variation shall not cause the order to have effect for a period of more than 5 years, and in any event, any order made under subsection (1) or varied under subsection (5) shall cease to have effect on the 8th anniversary of the date on which the bankrupt was adjudicated bankrupt.
(4) In making an order under subsection (1) the Court shall have regard to the reasonable living expenses of the bankrupt and his or her dependants and the Court may also have regard to any guidelines on reasonable living expenses issued by the Insolvency Service under the Personal Insolvency Act 2012 or by the Official Assignee.
(5) The Court, on the application of the bankrupt or the Official Assignee or the trustee in bankruptcy, may vary a bankruptcy payment order granted under subsection (1) where there has been a material change in the circumstances of the bankrupt.
(6) The court in granting an application under subsection (1) may order any person from whom the bankrupt is entitled to receive any salary, income, emolument, pension or other payment to make payments to the Official Assignee or trustee.
(7) For the purposes of this section, where a bankrupt is, or may become entitled to, payments under a relevant pension arrangement, an asset relating to the arrangement (other than payments already received by the bankrupt, or that the bankrupt was entitled to receive, under the arrangement) shall not be regarded as an asset.”.”.
Does the Deputy wish to speak?
Yes, if I may. I apologise for not being here earlier. The Joint Committee on Finance, Public Expenditure and Reform was speaking with the public interest directors from Permanent TSB and what we heard is relevant to this amendment.
I supported this legislation all the way through, fully support the Minister's intention in its regard and fully appreciate his engagement with the Oireachtas. The amendment at stake concerns the bankruptcy payment order. It states that after the three years of bankruptcy the creditor may apply for an additional five years of payments. By stating the period in question can be no longer than eight years the amendment confirms that this period could last up to eight years.
For me, the single most important part of what the Minister is trying to do in terms of getting good outcomes at the negotiating table so that there is no need to go to court is having a credible threat from the borrower. As the Minister knows, I am particularly interested is distressed mortgages. If the bankruptcy period was three years and the payment order could not exceed that period this would allow for a very credible threat from the borrower. In effect this permits the borrower to say, "If you, the bank, are not willing to engage in the spirit of this legislation as laid out by the Minister, and I agree with how he wants it to work, I am willing to put myself and my family through three very tough years in order to escape this debt. What I want you, the bank, to do is to engage reasonably and in the spirit of the legislation. If you do not, I can suck it up for three years". That is a credible threat.
In my view, what will happen now - those who deal with these situations every day, representing distressed mortgage holders agree - is that when that threat is made the bank will claim the period is not really three years but eight years. In the last week of the borrower's bankruptcy the bank can apply to the court for a payment order and can essentially keep taking money from him or her for another five years. We can debate how that might actually play out and the Minister's intent for how this might play out, but at the negotiating table where the bank is on one side and the distressed borrower on the other, that threat from the bank will now be able to reference the three paragraphs of Seanad amendment No. 200. I believe the bank will get away with a counter-threat that claims the period is not three years but eight. The borrower's child may be entering primary school this year but by the time the bank is finished with the him or her, that child will be entering secondary school. There are very many men and women in Ireland who desperately need to use this legislation but the banks will successfully stop them from doing so because eight years is no longer a credible threat.
This is backed up by the comments yesterday made by Richie Boucher, the chief executive of Bank of Ireland. Essentially he said his bank would not engage with this legislation, stating, "We are absolutely not going to engage in surrender of debt". He is on the media record, reported as saying that. The committee just spoke to the two public interest directors of Permanent TSB. Deputy Pearse Doherty and I questioned them on what the bank will do in terms of debt surrender, specifically in the context of this legislation. Ray MacSharry stated: "There will be no debt forgiveness - none". He repeated this in various ways. I was shocked. I had not been shocked to hear Richie Boucher say the same, because he is acting absolutely rationally as the chief executive of a private bank in saying his objective is to maximise return to the bank. It is not to better society - that is the objective of the Minister and Members of the Houses. However, I was shocked to hear one of our public interest directors say this. I gave him a specific example, of a borrower who borrowed €400,000 for a house that is now worth €200,000, and who could service a mortgage of €250,000. This is very similar to the example the Minister and I have used. I asked Mr. Boucher if in that case he was stating the position of the bank was that it would not write off, forgive or surrender the €150,000 that would leave the borrower with a mortgage she can afford, leave her in the house and still leave the bank in a better position because the mortgage is €250,000 versus a market value of €200,000. He refused to answer or engage with the question. This is all on the record and has just happened.
My position has always been that legislation which requires banks to voluntarily surrender debt is not going to work. The comments yesterday by Richie Boucher, and those we just heard from Ray MacSharry, back that up. I never had faith that senior managers and boards in the banks would voluntarily surrender a debt, as it is the Minister's intention they should, in this very well-meaning legislation.
I say this with huge regret because I believe this could be the most important legislation the Government will produce in its term. In the context of the comments we have heard both just now and from Bank of Ireland, I believe Seanad amendment No. 200 neuters the legislation. Never mind what Ray MacSharry or Richie Boucher said - I believe the other banks will act in exactly the same way because they will be acting rationally if they do so. They are defending the interest of the banks. None of this mattered if the borrower was able to say, "You know what? We appreciate you do not want to surrender any debt but we will walk away. We will give you the keys and go into three years of bankruptcy and we will walk".
The amendment tabled by Senator John Crown in the Seanad would have limited the payment order to the three years of the bankruptcy. I have no problem with a payment order. There might be a person on a wage of €80,000 who could pay the creditor a certain amount during the bankruptcy period. I have no problem with the principle of a payment order but Seanad amendment No. 200 extends that period in real terms. In our minds we can argue the technicalities: if it is not really an eight year bankruptcy period then the five years means something else. However, at the negotiating table the mind of a distressed borrower will see an eight year period. With huge regret, it is my opinion that Seanad amendment No. 200 will render the Minister's excellent intent in this legislation largely defunct, and for that reason I will oppose it.
I know the Minister is not in a position to accept amendments because they would be a change of policy and he would have to go back to the Cabinet. My understanding is that this Bill is meant to go to the Áras tonight so I understand that what I am saying now will not change the legislation. I fully believe in what the Minister was trying to do; I supported him publically and privately on it all the way through the passage of the legislation. At the last hurdle, I will oppose it, with huge regret, because I believe the banks will use Seanad amendment No. 200 to negate what the Bill is attempting to do. For me, as a public representative, I need no greater proof than the comments yesterday made by Richie Boucher, and those made today by Ray MacSharry within the past two hours. I say this with genuine regret.
I thank Deputy Donnelly both for raising this issue and for his constructive contribution throughout to this legislation. I am anxious to ensure there is no misunderstanding about Seanad amendment No. 200. I hope to avoid creating too much boredom in the Chamber but I will repeat something I stated previously and appreciate the Deputy giving me the opportunity to do so. Of course, I have not heard the presentation by Mr. Ray MacSharry to which the Deputy made reference. Let us look at what Seanad amendment No. 200 does and its implications for the legislation.
It replicates something that is already in bankruptcy law with which the Deputy will be familiar. With this legislation we are effectively describing a period of three years' bankruptcy. The only circumstances in which bankruptcy is extended, to paraphrase the legislation, is where there has been a fraud on behalf of the debtor or there has been a clear concealment of assets which may lead to the bankruptcy period being extended for up to eight years. Those are the only circumstances in which the bankruptcy period can be extended. There is no question of this section extending the bankruptcy period from three years to eight years for individuals who have not engaged in fraud and have not concealed assets. It is very important to get across that message. This is not a provision that will turn what is to be a three-year bankruptcy period into an eight-year bankruptcy period and it quite clearly does not do that.
What does the section do? The section contains a provision which allows for the official assignee in bankruptcy to seek a "bankruptcy payment order" by way of application to the court. The circumstances in which the bankruptcy payment order may be sought are where during the course of the three years of the bankruptcy period, the individual's financial circumstances might substantially improve and there may be a valid ground for arguing that post-bankruptcy it is reasonable that he or she continues to discharge some element of the outstanding debt that has not been discharged during the course of the bankruptcy.
The official assignee may be asked to pursue that issue by any creditor - it does not have to be a financial institution. Let us always remember that we are dealing with insolvency legislation. The area about which the Deputy is concerned is of course of particular personal concern to me and to the Government. However, let us start from the perspective that this is insolvency legislation. In the context of insolvency legislation where money is owed to creditors, there may be other individuals who are barely hanging on financially and who during the course of the bankruptcy have not recovered a reasonable portion of the debt that is there, but because of the improved circumstances of the bankrupt there is a fair and reasonable prospect they may get something additional. That could also apply to a financial institution.
The official assignee has discretion, first, as to whether he or she makes that application and, second, as to how much that application is for. It will be for the courts to determine how to deal with these applications and they must deal with them in circumstances in which individuals who have exited bankruptcy no longer have any of the constraints or difficulties of being a bankrupt. The person is free to get on with his or her life, to create another business and to generate income in whatever way he or she chooses. If the person is successful in that, it may be fair and reasonable for the person to discharge some additional portion of debt. There will be circumstances where that is appropriate and there clearly will be all sorts of circumstances where that is not appropriate. From the perspective of a creditor, whether secured or unsecured, a financial institution or another party, there is no guarantee of the outcome of making such an application to the courts.
The official assignee may determine it is not appropriate to make the application. Even when the official assignee makes the application, the courts may determine it is not appropriate to make the order because there is a particular philosophy about this legislation. The particular philosophy is that people are genuinely given a second chance to get on with their lives and exit from their financial difficulties. Of course people exiting bankruptcy must be given an incentive to get on financially successfully with their lives and not to find themselves put into further penury. That is all very important.
As the Deputy correctly says, this legislation is based on a certain approach. It is based on an approach in particular dealing with the personal insolvency arrangement which deals with secured credit where it is perceived there is an incentive for all creditors, including financial institutions with secured debt, to engage constructively with a personal insolvency practitioner to see if an agreement or resolution can be reached. For a range of reasons bankruptcy may be a very bad alternative, as much for the financial institution or other creditors as it is for the debtor because a debt settlement or personal insolvency arrangement may, over a period of years, create a greater possibility of recouping some of the debt due and may create greater opportunity for the debtor to exit the arrangement. From the financial institution's perspective the bankruptcy would produce an inevitable sale of the home. This may not be something the financial institution wants to achieve for a range of reasons. If it travels the route of repossession as opposed to bankruptcy there may be substantial downsides. The Deputy is aware of those and I will not delay the House by going into them.
This mechanism has been part of bankruptcy legislation in other jurisdictions for some time and it remains part of this structure. However, to suggest it creates a bankruptcy period of eight years instead of three years is incorrect. All of the constraints that come with bankruptcy are lifted from an individual. To some extent how this will work in practice in the context of the new arrangement or how it might impact on discussions and negotiations is greatly a matter for conjecture.
The personal insolvency arrangement arises in circumstances in which we have tens of thousands of people who are in significant personal financial difficulty with home mortgages. There are individuals who might have been part of two-income family households and are now part of one-income family households, individuals who may have been self-employed in businesses that were successful in the early part of the 2000s but are barely eking out a living for today, and individuals whose assets have collapsed. God help them, they might not only be in negative equity but might have invested whatever savings they had in bank shares which have completely gone down the toilet. There are many individuals in this State who, through no fault of their own, are caught in a debt trap. Some individuals are caught in that debt trap through their own irresponsibility. Not everybody is there for reasons beyond their control. However, there are thousands of people who are there for reasons beyond their control. They have been hit by a fiscal and economic tsunami. They are individuals who perceived themselves as being in secure employment and then found themselves unemployed. They are individuals who were running businesses that appeared to be successful, but who, because of the failure of others to pay debt, have found themselves in debt with other businesses, perhaps companies going into liquidation, non-corporate businesses, SMEs or single-ownership businesses that have been wound up. Many people are in trouble.
The issue is that the banks must constructively engage with this legislation. As I have said in the context of the personal insolvency arrangements, there are options for a financial institution with secured debt, be the secured debt a home loan or another form of loan. Based on the individual circumstances of the debtor concerned, arrangements will clearly need to be put in place that are either debt forbearance or involve some aspect of debt forgiveness. There is no doubt we know financial institutions will engage in debt forbearance. We know of in excess of 80,000 home loans where debt forbearance arrangements have been put in place, some of a temporary nature and some of longer duration. There are individuals who have benefited from debt forbearance arrangements and have now worked themselves out of that and are now paying full capital and interest.
The area in focus is that of debt forgiveness. Where individuals are genuinely insolvent and cannot, as opposed to will not, pay their monthly repayments, who are burdened by other debt and may be living in negative equity, to what extent will the financial institutions engage in debt forgiveness and write down?
There is no doubt that there are thousands of individuals for whom debt forbearance under the concept of the personal insolvency arrangement will not resolve the issue. It will not resolve it for either the debtors or the financial institution. There needs to be a constructive engagement by financial institutions with individuals based on their circumstances to recognise that in some instances, debt forgiveness or write off is appropriate. Deputy Donnelly and I have, for the sake of simplicity, regularly used the example of the homeowner who has borrowed €400,000 to acquire a home but whose home is today worth €200,000; is in negative equity by €200,000; his or her personal circumstances and income are depleted; and he or she can no longer make the mortgage repayments and has no other assets. It may be a married couple who are trapped in an apartment with two children - a home that was never constructed to accommodate two children.
For individuals in those circumstances where there is no reasonable prospect in the medium term of their financial position changing, debt write off is crucial for their personal circumstances and to enable them to participate again in the economy of this State and contribute to domestic economic growth. For selfish reasons, the State has an interest in these people exiting from debt. From the financial institution's perspective, it is important that where that is the position, losses are crystallised and an artificial value is not attached to the loan in the bank accounts. Financial institutions have been recapitalised to facilitate addressing this issue, not just in other areas but in the mortgage debt area. They have been stress tested and the time has come for them to recognise that there is a need to deal with this in the manner that is appropriate based on the individual circumstances of someone in serious debt and having regard to the level of that debt in the context of the structure of the personal insolvency arrangement.
As Deputies will be aware, AIB made a very helpful comment about this issue about a week or ten days ago. It made it clear that for some individuals in serious debt of this nature who are engaging with it, debt forgiveness is the only route to travel. That does not mean writing off the debt in its totality but writing off a portion of the capital due to recognise the reality based on current values and where an individual stands. We know of a small number of instances where financial institutions have engaged in some level of debt forgiveness that has not been publicised. One or two cases were publicised in recent months. It is not clear what scale it has happened on because clearly the financial institutions, taking Deputy Donnelly's approach, have their own interest in trying to ensure they do not encourage people who can pay not to do so in the hope they may get capital write off. The State cannot afford for that to happen either. Public comment indicates that if there is to be capital write off, it will not happen easily. AIB in recent days has been up-front and said publicly it recognises the need to do this. There is a need to do it for the health of AIB as well in order to get this bank out from under the yoke of uncertainty with regard to the true value of the mortgages they hold.
What about Bank of Ireland and the comments made by Ray MacSharry? I did not hear what he said but I would be of the view that if any public interest director of a financial institution publicly or privately states that his or her institution will not constructively engage with this legislation and in no circumstances will anyone will be afforded the possibility of a capital write off, regardless of the financial difficulties he or she is in, that individual is not acting in the public interest, never mind the private interest of the debtor. It is untenable to publicly state this in the circumstances of this Oireachtas coming together in a united fashion to enact a piece of insolvency legislation intent on trying to assist people in debt difficulties in a constructive way while at the same time, facilitating creditors to recoup at least a portion of what is due to them in a manner that does not involve the expense and complexity of bankruptcy proceedings.
I know Deputy Donnelly would not do this deliberately so I do not want him to take offence but I hope he either mis-reported in some sense what Ray MacSharry said or that what Mr. MacSharry said was not adequately thought out in the context of the insolvency legislation going through the House this evening. Perhaps we need to remember that this is a position that those on the boards of financial institutions or chief executives have taken up pending the enactment of the legislation and that when the legislation is enacted, they will have to review their position.
Let there be no doubt about it. Regardless of whether it is Bank of Ireland, Richie Boucher or Ray MacSharry, they must ensure their institutions constructively engage under this legislation in the public interest, the interest of those caught in financial difficulties and the interest of their own institutions and credibility. Without putting a tooth in it, we all know and it is no secret that the level of indebtedness people incurred and the property bubble and collapse were dramatically and substantially contributed to by the financial institutions of this State. They failed to undertake appropriate due diligence on individuals' capacity to repay loans they acquired, failed to have any regard to the sustainability of the increase in property values, threw money like confetti at developers to purchase land at inflated prices and contributed to a significant degree to the property bubble and the difficulties many young people are in. Too many young people thought they were being responsible and purchased homes at inflated prices for fear that if they did not purchase when they did, they would never be able to own a home in this State and banks helped to fuel that. None of that solves where we are today but I will be very clear about one thing I keep repeating. If I find within a short period during the operation of this legislation that all or some of the financial institutions are intent on not engaging constructively with the personal insolvency arrangement provisions for whatever reason, I will not be slow to bring proposals to Government to amend the legislation. Let there be no doubt of any description about that. Again, I thank Deputy Donnelly for raising the issue.
I keep saying that we must be careful with this legislation. I am very conscious of its importance to people with family homes in negative equity who are in significant financial difficulty. However, it is insolvency legislation that goes beyond those circumstances and applies to the broad gamut of circumstances in which individuals can get into financial trouble and which do not all relate to family homes. The great benefit of the personal insolvency arrangement is that it affords people in financial difficulty not just the possibility over a period of years of working out of those financial difficulties but the possibility of retaining ownership and occupation of their family homes, which will not occur if they have to resort to bankruptcy.
All I can say to the Deputy is that I am very disappointed to learn of comments made today in a committee of this House. I hope the individual who made them will reflect on them. Once the legislation is enacted, I would expect the fullest co-operation from financial institutions in working carefully and sensibly and with intelligence in respect of the legislation.
However, if there are difficulties I will not be slow to amend the legislation, and it is very important this is understood outside the House. The Government has engaged with the financial institutions in the lead-in to the enactment of this legislation. Some weeks ago, because I thought it was a useful exercise to do so, I met AIB and Bank of Ireland, and what I am now saying in the House I said very clearly at that meeting. One of the attendees was Mr. Boucher. I expect he understands exactly where the Government is coming from, what our concerns are and what Bank of Ireland should do in the context of operating the legislation constructively and sensibly, engaging with personal insolvency practitioners and the circumstances of their customers and ensuring appropriate and sensible arrangements are made.
Deputy Donnelly is right, of course, and his point applies to AIB as much as others. Banks have a duty to try to recoup debt owing to them. They also have an obligation to recognise a debt which is not recoverable, and not maintain a pretence that some part of a debt which cannot be recovered is recoverable. The Bill provides the mechanism for this and I hope we do not find ourselves back here too soon having to amend it. However, I have no doubt all of us, in government and in opposition, will be watching very carefully how the legislation works in the early months of its operation.
As before I appreciate the Minister's reply and his intent. I encourage him to take a look at the video of the interactions between Ray MacSharry and Deputy Pearse Doherty and myself. He will have to draw his own conclusions, and I appreciate he has not seen what Mr. MacSharry said, but I can quote him. He stated there will be no debt forgiveness and that they will not write off any debt. In my questioning I pointed to the monitor where this conversation was taking place and mentioned this legislation. His view was that the bank would deal with the legislation but there will be no debt forgiveness. To my mind Richie Boucher said the same thing in the public domain yesterday, certainly if the reports I have read are accurate. Mr. Masding, when he came before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform a few months previously, said exactly the same thing. This is publicly stated policy by Richie Boucher, Mr. Masding and Mr. MacSharry. I agree with the Minister's interpretation. I was shocked by what I heard and I believe various members of the committee were also shocked by it.
I fully accept the Minister's statement that he will bring this back and tighten up the legislation if needed, but I am concerned because it could take at least a year before there is sufficient space, momentum and evidence to bring it back. It could then take the Minister and his officials another length of time to reconstruct or amend very complex legislation. There may be a Cabinet reshuffle or a general election before this happens. I hope the Minister remains in his portfolio but we do not know this. It could be a year and a half before sufficient evidence is gathered, there is space in the Oireachtas and time for the Minister, his officials and those in the Office of the Attorney General to construct the amending legislation. The Minister may not be in this portfolio at that stage, and this concerns me. There may be a new government at that stage, and this also concerns me. Were I the banks, it is exactly the game I would be playing, and it seems to be exactly the game they are playing.
The amendment is about three years versus eight years. I agree it is a three-year period and I do not suggest it is an eight-year period. We all know this because we have been living and breathing this for quite some time, the Minister and his officials more than us in opposition. However, those at the negotiating table will not know this. The bank may know it, but the distressed borrowers, whom we all meet, who walk in on their own to these banks and are met with lawyers and accountants and anonymous bank officials, will not know. The real power of the legislation is not, I hope, how it is interpreted by the courts, it is how it plays out at the negotiating table. It is what never gets seen and the deal that gets done. The bedrock for this legislation was a credible threat of bankruptcy.
I was willing to accept the bank veto, and I believe the banks will use their veto as they have publicly stated they will do - perhaps not AIB, but Bank of Ireland and Permanent TSB have done so - because ultimately it was superseded by the credible threat of bankruptcy. If not technically, then in real terms at the negotiating table, amendment No. 200 removes this credible threat. Were I acting as the bank I would look through this, point to the five years and further point to the line which states any order under subsection (1) or varied under subsection (5) shall cease to have effect on the eighth anniversary of the date on which the bankrupt was adjudicated bankrupt. I would show this to the man or woman who came in, who has not been sleeping for months, who is suffering from unbelievable stress and who does not have access to lawyers and accountants. I would show those who came in this line and state they will be free on the eighth anniversary, that they will be bankrupt for three years and if after three years they manage to walk away from the negative equity and distressed mortgage and then try to get on with their life and work hard and earn money and invest in their future and their children's future, that I will take all of that off them for the next five years.
It will not matter at the negotiating table that technically there are all sorts of hoops which must be gone through, and that the official assignee may or may not give it to them, and we do not know what percentage of the income they will give them. What matters is the eighth anniversary and this is what the banks will use. If we go back to our example of the borrower with a debt of €400,000 who can service €250,000, how this is meant to work is that the €150,000 is surrendered. However, Richie Boucher, Mr. Masding and Ray MacSharry are stating publicly this is not what they will do. They will use their veto and state they will not write it down but take off the person the amount which services the €250,000 but park the €150,000 and never let the person off it. The bank will use its veto and not care that the person has a personal insolvency professional. It will not have to engage with the legislation because it has a veto. The only credible threat is a voluntary surrender coupled with bankruptcy which will take eight years. Therefore, the person must service the €250,000 and the bank will never let him or her off the €150,000.
I accept what the Minister is saying technically within the legislation, and I believe our intent for the legislation is the same. We differ on how it will play out. As I stated previously, amendment No. 200 removes the single most important part of the legislation, which is the unambiguous bounded three-year period.
I wish to briefly point out to Deputy Donnelly one issue which he has missed, which is that the debtor will not in these circumstances be walking into the bank faced by the bank's lawyers and bank manager pointing out the section, because the personal insolvency practitioner will be the expert and intermediary and will be able to, when speaking to the creditors, deal with any threats that might be made and put them in context. I wish to point this out because it is an important issue. We all know people are intimidated by their bank managers and banks, and they are fearful. They feel very dependent and are very concerned and, on occasion, so stressed they are unable to engage in a way that is of assistance to themselves. This is the importance of the personal insolvency practitioner, an individual who sits down with the debtor and goes through income, assets, liabilities and resources and engages with the creditors and puts together a plan. If a financial institution is unco-operative, it may not be possible to conclude a personal insolvency arrangement.
If there is a level of co-operation, however - what I would describe as snarling co-operation over-embedded with threats - it will become apparent at an early stage in this process that is the way financial institutions are dealing with this.
This Government is a lot more resilient than the Deputy is suggesting and I do not think we are going to have a general election in the next one to two years. I cannot predict how long I will be in this post. No Minister should ever predict how long they will be in any post, but I am articulating Government policy, not just my personal preference. It is Government policy that the financial institutions engage constructively and that there has to be, in appropriate circumstances, genuine engagement which may involve debt forgiveness. If we find in the early operation of this legislation that either no financial institution is willing to engage in that manner or that only one or two do so and no one else will, it will not take me 18 months to come in here with amending legislation. It will not happen that way. I wanted to say that because it is important.
We do have to get experience of how this works for some months at least. We must also see what place creditors, including secured creditors, are in after the legislation is enacted. In the context of the reports the Deputy gives of comments made this afternoon in a committee of this House by one individual, I would find such comments very disappointing and not reflective of the public interest. It is important that individual should give greater consideration to the proper workings of this legislation because if there is a lack of co-operation we have a remedy in this House to deal with that.
I commend Deputy Donnelly for raising this matter and, in fairness, he has raised it throughout the process. The concern is that we would not have a situation whereby the bankruptcy period would be reduced in real effect. There is also concern about a bank veto and opposition amendments have been tabled to try to curtail that, but they have been resisted.
I have had a chance to read over some of the comments made by Ray MacSharry and his colleague Margaret Hayes who are public interest directors with Permanent TSB. For the record, they have been paid €510,000 in fees since 2008. It is a hell of a lot of money to represent the public interest. I am shocked at what Deputy Donnelly has reported and what I have just read about these comments. It goes against all the debate we have had on debt forgiveness in Irish society in recent years. The Government has had an objective to deal with this issue. Deputy Donnelly has spoken at length about this area of huge concern to people. Not having a reduction in the period of bankruptcy is a very punishing system in this State.
I presume this Bill will be passed tonight and will go to the President for his stamp of approval. We will then need to reassure the public that at last there is some mechanism or process in place for people who were not reckless and believed what they saw in the media from their political leaders, economists and estate agents - that there would be a soft landing if anything went wrong. At the time, they were encouraged to purchase a home and invest. We now know that 24% of home owners are in mortgage distress. It involves approximately 180,000 families and individuals so we have a real crisis on our hands and this Bill is part of the response to that. It is critical, however, that the message comes from Government that if the banks and other financial institutions abuse any element of this legislation to prevent genuine debt forgiveness to families in that situation, the Government will immediately move - as quickly as it pushed through the family home tax legislation last night with a guillotine - to address that issue.
While we have serious concerns, and Deputy Donnelly has outlined his concerns also, we hope the impact of this legislation is to make a difference. Nonetheless, the arrogant comments of Ray MacSharry and Richie Boucher are acting against the public interest. I do not need to remind the Minister that these financial institutions are now under the control of the Irish people, so there needs to be a bit of humility particularly among public interest directors.
My final point throws the whole matter into sharp focus. The Law Reform Commission held an event last week at which one of the main points of focus concerned corporate responsibility and legislation in the area of white collar crime. There were some really interesting contributions. At the end, the eminent national and international experts were asked to define the role of public interest directors and what they have achieved. It was clear from the responses that they were not quite sure. Ultimately, however, they appeared to be still acting in the interests of the banks and their shareholders, even though that is not what they are paid to do.
I appreciate the Minister's immediate response to these comments. He has not had a chance to look at the transcript, but I would invite him to examine those comments. When the legislation is passed, he should act immediately to reassure the public that those outrageous comments are rebuked and confronted. Reassurance should be given that if banks seek to abuse this legislation and do not meet their responsibilities to give people a chance of debt resolution, the Government will move extremely swiftly - as swiftly as it did with the property or family home tax yesterday - to address whatever arises and put this thing straight.
One of the biggest challenges facing our people over the next generation involves mortgage distress, debt resolution and debt forgiveness for families who need a chance to move on. I appreciate that a huge amount of work and deliberation has gone into this legislation. Deputy Niall Collins and I have sat through all of the debate with the Minister. We have serious concerns and if they are quickly vindicated, I urge the Minister to reassure the public swiftly. We cannot have all the work and goodwill that has gone into this legislation torn apart by people who are acting against the interests of the Irish people, yet who are, unbelievably, being paid by the public.
On behalf of the United Left Alliance, I wish to express our concern and disappointment. In general terms, we all want to achieve some relief for those in mortgage distress or who are otherwise stuck under the burden of significant personal indebtedness. There is a genuine desire across the House to do something about that, but it is disappointing that we have not gone a hell of a lot further in this legislation.
In the amendments we tabled on Committee Stage - pretty much all of which were ruled out of order - we urged a model whereby the insolvency agency the Government intends to establish would have the power to impose fair settlements on banks.
It is disappointing that the Government has not taken that road, as is the case in some other countries.
The model the United Left Alliance considered was that which obtained in Norway. It appears as though Norway has many models Ireland could follow on a range of levels when it comes to managing the relationship between the State and private interests. However, the proposal was there would be much stronger legal imperatives completely safeguarding the family home, as well as an independent body that could impose a fair settlement and write-down, where needs be, on the financial institutions, that is, on the banks. This is what should and could have been done and I believe it is the only measure that will resolve this major problem. While legislation of this type to update and improve the law in this regard would be important at any stage, we are not just at any stage. We are at a stage at which the entire economy is suffocated with this stuff and where there is a serious question mark over whether it is possible to talk about anything approaching economic recovery unless this problem is dealt with comprehensively. The concern of the United Left Alliance, which has been expressed by other Deputies, is that will not be achieved with this legislation, because it does not go far enough and still leaves the whip hand with the banks.
This is disappointing, particularly because I attended the meeting of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform to which Deputy Donnelly referred and I heard the Minister's response stating he is disappointed that an individual should display that attitude. However, it is clear that it is not an individual. While the chief executive officer of AIB was slightly more polite in the way he put it, he actually said more or less the same thing. The chief executive officer of Bank of Ireland, Mr. Boucher, was not terribly polite but he was doing what is logical from the point of view of a commercial entity that is a bank. If one is operating a bank on the commercial basis that such people perceive themselves to be operating it, then what they are doing is logical. It is not of great interest to them whether people are in distress or whether the economy is banjaxed because they do not give significant debt relief. That is not their concern, which is to maximise profits to restore their balance sheet. That is what they do. The question is whether Members will intervene with legislation and other powers to adjust their priorities in order that their priorities align themselves with the public interest to a greater extent. I refer to the interests of distressed mortgage holders, the economy and the public interest as a whole. In Members' conversations with them, it has been clear that they simply do not get that. They think their interests are the public interest. What emerged from the discussions is they think what is good for them is good for us. However, as it is apparent that what is good for them is not good for us, this message must be hammered into their heads in some way.
On the issue of public interest directors, one point to emerge is Members must tell the public interest directors what to do. Members must hold them to account and must instruct them how to represent the public interest on the boards of banks and to go in to bat for the public interest on issues such as distressed mortgages. As I understand it, however, the Minister is stating that under this legislation, if the banks do not do a reasonable deal the threat of bankruptcy will be enough to push them to do so. However, as Deputy Donnelly has outlined, there is a very serious question mark when one has this eight-year period, rather than three years after which one can walk away.
I would like this legislation to be stronger. I recognise that even with all its limitations and shortcomings - as I might perceive them - this still represents an improvement on the status quo, in which people have nothing and are in complete limbo. Consequently, it is not a case of voting against the legislation but I can tell the Minister that at this point, I consider the legislation to be inadequate and that it will not do the job. Members must register that fact with the Minister in some way and the logical way to so do is to vote against this particular amendment, which qualifies and seriously dilutes the threat of bankruptcy that a debtor can use to try to put pressure on the bank.
Question put: "That Seanad amendment No. 200 be agreed to."
The Dáil divided: Tá, 87; Níl, 44.
Tá
- Bannon, James.
- Breen, Pat.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Collins, Áine.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Coonan, Noel.
- Corcoran Kennedy, Marcella.
- Costello, Joe.
- Creed, Michael.
- Deasy, John.
- Deenihan, Jimmy.
- Deering, Pat.
- Doherty, Regina.
- Donohoe, Paschal.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Fitzgerald, Frances.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Flanagan, Terence.
- Gilmore, Eamon.
- Griffin, Brendan.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Howlin, Brendan.
- Humphreys, Heather.
- Humphreys, Kevin.
- Keaveney, Colm.
- Kehoe, Paul.
- Kelly, Alan.
- Kenny, Enda.
- Kenny, Seán.
- Kyne, Seán.
- Lawlor, Anthony.
- Lynch, Kathleen.
- Lyons, John.
- McCarthy, Michael.
- McFadden, Nicky.
- McGinley, Dinny.
- McHugh, Joe.
- McLoughlin, Tony.
- Maloney, Eamonn.
- Mathews, Peter.
- Mulherin, Michelle.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Nolan, Derek.
- Ó Ríordáin, Aodhán.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Mahony, John.
- O'Reilly, Joe.
- O'Sullivan, Jan.
- Penrose, Willie.
- Perry, John.
- Phelan, Ann.
- Phelan, John Paul.
- Reilly, James.
- Ring, Michael.
- Ryan, Brendan.
- Shatter, Alan.
- Sherlock, Sean.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Tuffy, Joanna.
- Twomey, Liam.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Adams, Gerry.
- Boyd Barrett, Richard.
- Broughan, Thomas P.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen S.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke 'Ming'.
- Fleming, Sean.
- Fleming, Tom.
- Halligan, John.
- Healy, Seamus.
- Healy-Rae, Michael.
- Higgins, Joe.
- Kelleher, Billy.
- Kitt, Michael P.
- Mac Lochlainn, Pádraig.
- McConalogue, Charlie.
- McDonald, Mary Lou.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- McLellan, Sandra.
- Moynihan, Michael.
- Murphy, Catherine.
- Naughten, Denis.
- Ó Caoláin, Caoimhghín.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O'Brien, Jonathan.
- Pringle, Thomas.
- Ross, Shane.
- Shortall, Róisín.
- Stanley, Brian.
- Troy, Robert.
- Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Pádraig Mac Lochlainn and Stephen S. Donnelly.
Question declared carried.
Seanad amendment No. 201:
Section 147: In page 121, before section 147, but in Part 4, to insert the following new section:
147.—Section 123(3)(b) of the Bankruptcy Act 1988 is amended by the substitution of “3 years” for “twelve months”.”.
Seanad amendment agreed to.
Seanad amendments Nos. 202 to 212, inclusive, are related and will be discussed together by agreement. Is that agreed? Agreed.
Seanad amendment No. 202:
Section 147: In page 121, lines 6 to 43, to delete section 147 and substitute the following section:
"CHAPTER 1
General Provisions
147.—In this Part—
“accounting records”, in relation to a personal insolvency practitioner, mean the books of account and all other documents required to be kept by the personal insolvency practitioner in accordance with regulations made under section 161;
“complainant”, in relation to a complaint, means the person who made the complaint;"
"complaint” means a complaint under section 166;
“improper conduct”, in relation to a personal insolvency practitioner, means—
(a) the commission by the personal insolvency practitioner of an act which renders the personal insolvency practitioner no longer a fit and proper person to carry on practice as a personal insolvency practitioner,
(b) the commission by the personal insolvency practitioner of a material contravention of a provision of regulations made under section 149 or 161;
“inspector” means a person appointed under section 164 to be an inspector;
“investigation” means an investigation under section 168;
“investigation report”, in relation to an investigation, means a report in writing prepared, following the completion of the investigation, by the inspector appointed under section 168(1)(b) to carry out the investigation—
(a) stating that the inspector—
(i) is satisfied that improper conduct by the personal insolvency practitioner to whom the investigation relates has occurred or is occurring, or
(ii) is not so satisfied, as appropriate,
(b) if paragraph (a)(i) is applicable, stating the grounds on which the inspector is so satisfied, and
(c) if paragraph (a)(ii) is applicable, stating—
(i) the basis on which the inspector is not so satisfied, and
(ii) the inspector’s opinion, in view of such basis, on whether or not a further investigation of the personal insolvency practitioner is warranted and, if warranted, the inspector’s opinion on the principal matters to which the further investigation should relate;
“maintain”, in relation to a record, includes create and keep;
“major sanction”, in relation to a personal insolvency practitioner, means—
(a) the revocation of his or her authorisation to carry on practice as a personal insolvency practitioner and a prohibition (which may be a permanent prohibition, a prohibition for a specified period or a prohibition subject to specified conditions) against the former personal insolvency practitioner applying for a new authorisation,
(b) the suspension for a specified period of his or her authorisation to carry on practice as a personal insolvency practitioner or, in any case where the period of such suspension (in this paragraph referred to as “the relevant period”) sought to be imposed is longer than the period of validity of the authorisation left to run, the suspension of the authorisation during that period and a prohibition for a specified period against the former personal insolvency practitioner applying for a new authorisation, which periods, added together, are equivalent to the relevant period,
(c) a direction to the personal insolvency practitioner that the personal insolvency practitioner pay a sum, as specified in the direction but not exceeding €30,000, to the Insolvency Service, being the whole or part of the cost to the Insolvency Service of an investigation of the personal insolvency practitioner, or
(d) any combination of any of the sanctions specified in paragraphs (a) to (c);
“minor sanction”, in relation to a personal insolvency practitioner, means—
(a) the issue, to the personal insolvency practitioner, of—
(i) advice,
(ii) a caution,
(iii) a warning, or
(iv) a reprimand,
or
(b) any combination of any of the sanctions specified in paragraph (a);
“moneys received from debtors” means moneys received from a debtor or from third parties in respect of the debtor under a Debt Settlement Arrangement or a Personal Insolvency Arrangement;
“professional indemnity insurance” means a policy of indemnity insurance against losses arising from claims in respect of any description of civil liability incurred by a person arising from his or her carrying on practice as a personal insolvency practitioner;
“Register” means the Register of Personal Insolvency Practitioners established under section 150;
“satisfied” means satisfied on reasonable grounds;
“specified”—
(a) in relation to a period, means a period which is reasonable in the circumstances concerned,
(b) in relation to a time, date or place, means a time, date or place, as the case may be, which is reasonable in the circumstances concerned;
“terms” includes conditions.".
Seanad amendment agreed to.
Seanad amendment No. 203:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
148.—(1) A person shall not—
(a) act as a personal insolvency practitioner,
(b) hold himself or herself out as available to act as a personal insolvency practitioner, or
(c) represent himself or herself by advertisement as available to act as a personal insolvency practitioner, unless that person is authorised to so act by virtue of this Act.
(2) A person who acts in contravention of subsection (1) is guilty of an offence.”.
Seanad amendment agreed to.
Seanad amendment No. 204:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
149.—The Insolvency Service, with the consent of the Minister, may and, if directed by the Minister to do so and in accordance with the terms of the direction, shall, following consultation with the Minister for Finance and with any other person or body as the Insolvency Service deems appropriate or as the Minister directs, by regulations provide for any of the following, for the purposes of the control and supervision of personal insolvency practitioners and the protection of debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements:
(a) the procedures governing—
(i) the authorisation of persons to carry on practice as personal insolvency practitioners; and
(ii) the termination, at a person’s request, of his or her authorisation to carry on practice as a personal insolvency practitioner;
(b) the standards to be observed in the performance of their functions by personal insolvency practitioners with particular reference to—
(i) the public interest;
(ii) the duties owed to debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements;
(iii) the professional and ethical conduct of personal insolvency practitioners;
(iv) the confidentiality of the information of debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements; and
(v) conflicts of interest;
(c) the qualifications (including levels of training, education and experience) or any other requirements (including required standards of competence, fitness and probity and required minimum levels of professional indemnity insurance) for the authorisation of persons to carry on practice as personal insolvency practitioners;
(d) the terms on which indemnity against losses is to be available to personal insolvency practitioners under any policy of indemnity insurance and the circumstances in which the right to such indemnity is to be excluded or modified;
(e) the records to be maintained and the information and returns to be provided to the Insolvency Service by personal insolvency practitioners; and
(f) the circumstances and purposes for which a personal insolvency practitioner may charge fees or costs or seek to recover outlays.”.
Seanad amendment agreed to.
Seanad amendment No. 205:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
150.—(1) The Insolvency Service shall establish and maintain a register to be known as the Register of Personal Insolvency Practitioners.
(2) The Register shall be in such form as the Insolvency Service deems appropriate and shall—
(a) contain the names of personal insolvency practitioners and such other identifying particulars as the Insolvency Service considers appropriate, and
(b) contain such other entries in respect of personal insolvency practitioners (including personal insolvency practitioners whose authorisation is suspended) as the Insolvency Service considers appropriate.
(3) The Insolvency Service shall make the Register available for inspection by members of the public on its website.
4) A copy of an entry in the Register shall, on request, be issued by the Insolvency Service on payment of such fee (if any) as may be prescribed.
(5) In any legal proceedings, a certificate signed by the Director, or a member of the staff of the Insolvency Service authorised by the Director to give a certificate under this subsection, stating that a person—
(a) is registered in the Register,
(b) is not registered in the Register,
(c) was at a specified date or during a specified period registered in the Register,
(d) was not, at a specified date or during a specified period, registered in the Register or was suspended from the Register at that time, or
(e) has never been registered in the Register, shall, without proof of the signature of the person purporting to sign the certificate or that the person was the Director or a member of the staff of the Insolvency Service so authorised, as the case may be, be evidence, unless the contrary is proved, of the matters stated in the certificate.
(6) The Insolvency Service shall ensure that the Register is accurate and, for that purpose, the Insolvency Service shall make any alteration requiring to be made in the information contained in an entry.
(7) The Insolvency Service shall, as soon as is practicable after doing anything under subsection (6), give notice in writing of that fact to the personal insolvency practitioner to whom the alteration relates.
(8) A personal insolvency practitioner to whom an entry in the Register relates shall give notice in writing to the Insolvency Service of—
(a) any error that the person knows of in the entry, and
(b) any change in circumstances that is likely to have a bearing on the accuracy of the entry, as soon as may be after the person becomes aware of that error or change in circumstances, as the case may be.”.
Seanad amendment agreed to.
Seanad amendment No. 206:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
151.—(1) An individual may make an application in the prescribed form to the Insolvency Service for authorisation to carry on practice as a personal insolvency practitioner unless the individual is prohibited from making such an application by virtue of the imposition on the individual of a major sanction which falls within paragraph (a) or (b) of the definition of “major sanction” in section 147 or where an order under section 167(2) is in force suspending that individual from carrying on practice as a personal insolvency practitioner.
(2) An application under subsection (1) shall be accompanied by—
(a) evidence of the applicant’s competence (including any levels of education, training and experience specified by the Insolvency Service, and in particular that the applicant has a satisfactory knowledge of—
(i) the provisions of this Act, and
(ii) the law generally as it applies in the State relating to the insolvency of individuals and in particular statutory provisions relating to such persons,
(b) a report in the prescribed form by a duly qualified accountant that appropriate financial systems and controls are or will be in place for the protection of moneys received from debtors if the applicant is authorised to carry on practice as a personal insolvency practitioner,
(c) evidence in writing of the availability to the applicant of the required level of professional indemnity insurance if the applicant is authorised to carry on practice as a personal insolvency practitioner,
(d) such other documents as may be prescribed by the Insolvency Service in relation to applications for authorisation to carry on practice as a personal insolvency practitioner, and
(e) the prescribed fee.
(3) Without prejudice to section 156, the Insolvency Service may—
(a) require an applicant to provide in the prescribed form, or by statutory declaration, such additional information in respect of the applicant’s character, competence and financial position, and it may make such inquiries and conduct such examinations in that regard, as it considers necessary,
(b) require the applicant to provide a certificate in the prescribed form by a member of the Garda Síochána not below the rank of superintendent containing such particulars in respect of the applicant as are requisite for the due performance of the Insolvency Service’s functions in relation to the applicant.”.
Seanad amendment agreed to.
Seanad amendment No. 207:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
152.—(1) Subject to subsections (3) and (5), the Insolvency Service may authorise an individual to carry on practice as a personal insolvency practitioner and shall furnish to that individual the registration number assigned to such person for the purposes of the Register.
(2) When deciding whether to authorise an individual to carry on practice as a personal insolvency practitioner, the Insolvency Service shall take into account any information supplied to it under sections 151 and 156.
(3) Subject to section 153, the Insolvency Service shall refuse to authorise an individual to carry on practice as a personal insolvency practitioner if—
(a) section 151 has not been complied with as respects the individual,
(b) the individual has not furnished sufficient evidence to show that there is available to him or her the required level of professional indemnity insurance,
(c) the individual—
(i) is under 18 years of age, or
(ii) is an undischarged bankrupt,
(d) the Insolvency Service is satisfied that the individual—
(i) is not a fit and proper person to carry on practice as a personal insolvency practitioner,
(ii) is not competent to carry on practice as a personal insolvency practitioner or does not meet the levels of education, training and experience specified by the Insolvency Service, or
(iii) does not comply with any requirement (not being a requirement referred to in any of paragraphs (a) to (c) of this subsection) of this Act or of regulations made under this Act applicable to the person.
(4) An authorisation to carry on practice as a personal insolvency practitioner, unless sooner surrendered or revoked or otherwise ceasing to be in force, shall remain in force for a period of one year from the date on which it is issued.
(5) An authorisation to carry on practice as a personal insolvency practitioner is personal to the personal insolvency practitioner concerned.
(6) An authorisation to carry on practice as a personal insolvency practitioner shall not authorise the person concerned to carry on any other form of financial advisory services subject to regulation by the Central Bank of Ireland.”.
Seanad amendment agreed to.
Seanad amendment No. 208:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
153.—(1) Where the Insolvency Service proposes to refuse to authorise a person to carry on practice as a personal insolvency practitioner, it shall give notice in writing to the person—
(a) of the proposal and the reasons for the proposal, and
(b) stating that the person may make representations in writing to the Insolvency Service on the proposal—
(i) subject to subparagraph (ii), within 21 days from the date of the issue of that notice to the person,
(ii) within such longer period as the Insolvency Service deems appropriate in the circumstances of the case.
(2) Where the Insolvency Service has given a notice under subsection (1) to a person, it shall, as soon as is practicable after the expiration of the period referred to in subsection (1)(b)(i) or (ii), as the case requires, and the consideration of any representations referred to in subsection (1)(b) made to it—
(a) issue to the person the authorisation that is the subject of the notice, or
(b) refuse to issue the authorisation that is the subject of the notice and give the person—
(i) notice in writing of the refusal and the reasons for the refusal, and
(ii) a copy of section 157 if the ground, or one of the grounds, for the refusal falls within section 152(3)(d).”.
Seanad amendment agreed to.
Seanad amendment No. 209:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
154.—(1) An authorisation to carry on practice as a personal insolvency practitioner, unless it has been revoked, may, subject to subsection (4), be renewed by the Insolvency Service.
(2) An application for the renewal of an authorisation to carry on practice as a personal insolvency practitioner shall be—
(a) in the prescribed form,
(b) made at least 6 weeks before the expiration of the authorisation, and
(c) accompanied by—
(i) such documents as may be prescribed, and
(ii) the prescribed fee.
(3) Subject to subsection (4), where an application under subsection (2) for the renewal of an authorisation is not determined by the Insolvency Service before the authorisation expires, and the application was made in accordance with paragraph (b) of that subsection, the authorisation shall continue in force until the application has been so determined.
(4) Subject to section 155, the Insolvency Service shall refuse to renew an authorisation to carry on practice as a personal insolvency practitioner if—
(a) subsection (2) has not been complied with in respect of the person,
(b) the application is not accompanied by a report in the prescribed form by a duly qualified accountant that appropriate financial systems and controls are still in place for the protection of moneys received from debtors by the applicant,
(c) the applicant does not satisfy the Insolvency Service that there is available to the person the required level of professional indemnity insurance in respect of the authorisation to carry on practice as a personal insolvency practitioner,
(d) in the case of an individual, the person is an undischarged bankrupt.
(5) Where an authorisation to carry on practice as a personal insolvency practitioner is renewed under this Act, the period of validity of the authorisation as so renewed shall be deemed to start to run on the day that the authorisation would have expired if no application under subsection (2) for its renewal had been made, and irrespective of whether the authorisation is renewed before, on or after that day.”.
Seanad amendment agreed to.
Seanad amendment No. 210:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
155.—(1) Where the Insolvency Service proposes to refuse to renew an authorisation to carry on practice as a personal insolvency practitioner, it shall give a notice in writing to the person concerned—
(a) of the proposal and the reasons for the proposal, and
(b) stating that the person may make representations in writing to the Insolvency Service on the proposal—
(i) subject to subparagraph (ii), within 21 days from the date of the issue of that notice to the person, or
(ii) within such longer period as the Insolvency Service deems appropriate in the circumstances of the case.
(2) Where the Insolvency Service has given a notice under subsection (1) to a person, it shall, as soon as is practicable after the expiration of the period referred to in subsection (1)(b)(i) or (ii), as the case requires, and the consideration of any representations referred to in subsection (1)(b) made to it—
(a) issue to the person the renewal of the authorisation that is the subject of the notice, or
(b) refuse to renew the authorisation that is the subject of the notice and give the person notice in writing of the refusal and the reasons for the refusal.”.
Seanad amendment agreed to.
Seanad amendment No. 211:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
156.—(1) The Insolvency Service may request the Commissioner of the Garda Síochána or the Central Bank of Ireland to provide any information requisite for the due performance of its functions in relation to any applicant for authorisation to carry on practice as a personal insolvency practitioner or any personal insolvency practitioner.
(2) The Commissioner of the Garda Síochána and the Central Bank of Ireland shall comply with a request under subsection (1) notwithstanding anything contained in any statutory provision or rule of law.”.
Seanad amendment agreed to.
Seanad amendment No. 212:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
157.—(1) A person aggrieved by a decision of the Insolvency Service—
(a) refusing under section 152(3)(d) to issue an authorisation to carry on practice as a personal insolvency practitioner, or
(b) declining under section 166(2) to cause to be carried out an investigation of the matter the subject of a complaint, may, within 21 days from the date of receipt of notice of the decision, appeal to the Circuit Court against the decision.
(2) The jurisdiction conferred on the Circuit Court by this section shall be exercised by the judge for the time being assigned to the circuit where the appellant ordinarily resides or carries on any profession, business or occupation.
(3) The appeal shall be determined by the Circuit Court—
(a) by confirming the decision of the Insolvency Service to which the appeal relates, or
(b) by substituting its determination for that decision.
(4) A decision of the Circuit Court under this section shall be final, save that, by leave of that Court, an appeal shall lie to the High Court on a point of law.”.
Seanad amendment agreed to.
Seanad amendments Nos. 213 to 218, inclusive, are related and will be discussed together.
Seanad amendment No. 213:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
“CHAPTER 2
General Obligations of Personal Insolvency Practitioners
158.—Where a personal insolvency practitioner is appointed by a debtor under Chapter 2 of Part 3, the personal insolvency practitioner shall retain such records as may be prescribed and in such form and manner as may be prescribed of his or her activities in relation to the debtor for a period of not less than 6 years after the completion of the activity to which the record relates.”.
These amendments deal with the new Part 5, which makes provision for the regulation, supervision and discipline of personal insolvency practitioners. The insolvency service will be responsible for the direct regulation of personal insolvency practitioners. We will not impose any particular restrictions as to the types of professions of persons who will be licensed to perform this function. Normally, looking at experience in other jurisdictions, such insolvency practitioners tend to be accountants or lawyers but can be also other professionals in the broad financial services sector. Individuals trained as mediators who have financial experience may well prove to be very effective personal insolvency practitioners. In the context of existing professionals, many of these will be already regulated, as appropriate, by the Central Bank, where they are financial intermediaries for the provision of other financial services. This is the approach I intend to take. Suitable persons meeting the normal fitness to practise and competence criteria, who have indemnity insurance, which is important, and meet the other requirements in the legislation will be able to apply for registration on an individual rather than corporate basis.
I will now address the detail of the new Part 5. Amendment No. 202 proposes the insertion of section 147, which provides for the interpretation of certain items used in the new Part.
Amendment No. 203 proposes the insertion of section 148. This new section provides that it will be an offence for a person to act as a personal insolvency practitioner who is not entitled to do so by virtue of this legislation.
Amendment No. 204 proposes the insertion of section 149. This section gives the insolvency service the power to make regulations to provide for matters such as procedures governing the authorisation of persons to carry on practice as personal insolvency practitioners, the standards to be observed by personal insolvency practitioners, qualifications and requirements as to competence, information to be provided to the insolvency service by personal insolvency practitioners and the circumstances and purpose for which a personal insolvency practitioner may charge fees or costs.
We are discussing amendment No. 213.
I did not think we had reached amendment No. 202 yet.
We flew over that amendment to be kind to the Minister.
The Deputies opposite must have nodded it through for me. I was anxious to place on record the background to the provisions but I will be happy, if need be, to proceed to amendment No. 213. Chapter 2, comprising sections 158 to 160, sets out a number of general obligations that will apply to personal insolvency practitioners. Amendment No. 213 proposes the insertion of section 158. This section imposes an obligation on personal insolvency practitioners to keep records of their activities with debtors for a period of not less than six years after the completion of the activity to which the record relates.
Amendment No. 214 proposes the insertion of section 159. Under this section, a personal insolvency practitioner will be required to have a policy of professional indemnity insurance which meets requirements that may be prescribed in regulations.
Amendment No. 215 proposes the insertion of section 160 to provide that a personal insolvency practitioners will not be permitted to charge fees or costs which are not incurred either in accordance with regulations made under section 149 or in accordance with the terms of a debt settlement arrangement or personal insolvency arrangement.
Chapter 3, comprising sections 161 to 163, inclusive, contains important provisions dealing with accounts and related matters. Amendment No. 216 proposes the insertion of section 161. This section empowers the insolvency service to make regulations regarding financial matters, including the rights, duties and responsibilities of a personal insolvency practitioner in respect of moneys received from debtors, the accounting records which must be maintained by a personal insolvency practitioner and verification and enforcement of compliance with regulations.
Amendment No. 217 proposes the insertion of section 162 to provide that the insolvency service may, where necessary, apply to the High Court for certain orders in relation to the banking accounts kept by the personal insolvency practitioner in his or her capacity as such or in relation to the assets of the personal insolvency practitioner.
Amendment No. 218 proposes the insertion of section 162 which aims to address circumstances where a personal insolvency practitioner is no longer authorised to carry on practice as such and the person has not made adequate arrangements for handing over documents relating to his or her practice as a personal insolvency practitioner. In such a case, the insolvency service may issue a notice requiring the production of the documents to the service. Where the person fails to comply with such a requirement, the service may apply to the Circuit Court for an order requiring compliance with the requirement.
Seanad amendment agreed to.
Seanad amendment No. 214:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
159.—(1) A personal insolvency practitioner shall not carry on practice as a personal insolvency practitioner unless there is in force, at the time he or she so acts, a policy of professional indemnity insurance which meets such requirements as may be prescribed from time to time pursuant to subsection (2).
(2) The Insolvency Service may prescribe such matters as it considers necessary in relation to policies of professional indemnity insurance including the minimum
amount of cover which shall apply in relation to each and every claim made against a personal insolvency practitioner.”.
Seanad amendment agreed to.
Seanad amendment No. 215:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
160.—A personal insolvency practitioner shall not charge fees or costs or seek to recover outlays which are not incurred—
(a) in accordance with regulations made under section 149(f), and
(b) in a case where a Debt Settlement Arrangement or a Personal Insolvency Arrangement comes into effect, in accordance with the terms of such an
arrangement.”.
Seanad amendment agreed to.
Seanad amendment No. 216:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
“CHAPTER 3
Accounts and Related Matters
161.—(1) Subject to subsection (2), the Insolvency Service may make regulations providing for any of the following matters:
(a) the kind or kinds of accounts at banks authorised to carry on business in the State which may be opened and kept by a personal insolvency practitioner for the keeping of moneys received from debtors;
(b) the opening and keeping of such accounts by a personal insolvency practitioner and in particular the keeping of moneys received from or for the credit of or on behalf of debtors in a client account maintained specifically for that purpose;
(c) the rights, duties and responsibilities of a personal insolvency practitioner in respect of moneys received from debtors, including the transmission of such moneys to creditors and the deduction of fees, charges and outlays due to the personal insolvency practitioner;
(d) the receipts or statements to be issued by a personal insolvency practitioner in respect of moneys received from debtors;
(e) the accounting records to be maintained by a personal insolvency practitioner, including the minimum period or periods for which accounting records shall be retained by a personal insolvency practitioner during the period of, and following the conclusion of, Debt Settlement Arrangements or Personal Insolvency Arrangements and the manner in which the lodgement into bank accounts of any moneys received from debtors shall be recorded in the accounting records;
(f) the accounting records to be maintained by a personal insolvency practitioner containing particulars of and information as to moneys received, held, controlled or paid by the personal insolvency practitioner in connection with Debt Settlement Arrangements or Personal Insolvency Arrangements;
(g) the circumstances and manner in which a personal insolvency practitioner (or a duly qualified accountant on behalf of the personal insolvency practitioner) verifies compliance with the regulations, including the frequency of doing so;
(h) the examination by an auditor or an accountant who is a member of a body prescribed for the purposes of this section, at intervals prescribed by the
regulations, of accounting records maintained by a personal insolvency practitioner under regulations made under paragraphs (e) and (f) and for the making of reports to the Insolvency Service of such matters relating to the keeping of accounts and holding of moneys received from debtors as may be prescribed and such reports shall be in such form as may be prescribed;
(i) the enforcement by the Insolvency Service of compliance with the regulations;
(j) the imposition of fees on a personal insolvency practitioner in cases of non-compliance where the Insolvency Service, by reason of such noncompliance
has determined that further enquiries should be carried out (such fees not exceeding the cost of conducting such enquiries);
(k) the examination, by or on behalf of the Insolvency Service, of the financial circumstances of a personal insolvency practitioner in so far as such circumstances could affect his or her capacity to carry out the functions of a personal insolvency practitioner.
(2) The Insolvency Service shall, in making regulations under this section, have regard to the need to protect debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements.”.
Seanad amendment agreed to.
Seanad amendment No. 217:
Section 147: In page 121, before section 147, to insert the following new section:
162.—(1) Where, as respects a person who is a personal insolvency practitioner, the Insolvency Service determines that it is necessary to do so for the protection of debtors and creditors who are parties to Debt Settlement Arrangements or Personal Insolvency Arrangements in relation to which the personal insolvency practitioner concerned is performing or has performed functions performable by a personal insolvency practitioner under this Act, the Insolvency Service may apply to the High Court in a summary manner for an order directing one or more of the following:
(a) that no bank shall, without leave of the High Court, make any payment out of an account in the name of the personal insolvency practitioner concerned in his or her capacity as a personal insolvency practitioner;
(b) that a specified bank shall not, without leave of the High Court, make any payment out of an account kept at such bank by the personal insolvency practitioner or former personal insolvency practitioner in such capacity or former capacity, as the case may be;
(c) that the personal insolvency practitioner or former personal insolvency practitioner shall not, without leave of the High Court, dispose of or direct or facilitate the disposal of any assets within his or her possession or control or within his or her procurement;
(d) that the personal insolvency practitioner or former personal insolvency practitioner shall not, without leave of the High Court, reduce his or her assets below a specified amount or value.
(2) The High Court may hear an application for an order under subsection (1) otherwise than in public.
(3) Where the High Court makes an order under subsection (1) in relation to a personal insolvency practitioner, the Court may make one or more of the following
further orders:
(a) directing a specified bank to furnish any information in its possession that the Insolvency Service requires relating to any aspect of the financial affairs of the personal insolvency practitioner in his or her capacity as a personal insolvency practitioner;
(b) directing the personal insolvency practitioner to swear an affidavit disclosing all information relating to or contained in any account with any bank held in his or her own name, or in the name of his or her business or former business as a personal insolvency practitioner, or jointly with third parties, within a specified duration of time to be fixed by the Court;
(c) directing the personal insolvency practitioner to swear an affidavit disclosing all information relating to his or her assets, either then in his or her possession or control or within his or her procurement or which had been but are no longer in his or her possession or control or within his or her procurement, within a specified duration of time to be fixed by the Court, and, if no longer in his or her possession or control or within his or her procurement, his or her belief as to the present whereabouts of those assets;
(d) directing the personal insolvency practitioner to make himself or herself available before the Court on a specified date and at a specified time for oral examination under oath in relation to the contents of any affidavit of assets sworn by him or her pursuant to paragraph (c).
(4) Where the High Court makes an order under subsection (1) in relation to a personal insolvency practitioner, the personal insolvency practitioner shall forthwith lodge (or cause to be lodged) any moneys subsequently received by him or her to the appropriate account or accounts, unless otherwise ordered by the Court.
(5) Where the High Court is satisfied, on an application being made to it by the Insolvency Service, that there is reason to believe that any person holds or has held assets on behalf of a personal insolvency practitioner or on behalf of his or her practice or former practice as a personal insolvency practitioner to whom subsection (1) applies, the Court may order that person to disclose to the Insolvency Service all information as to such assets, either then in his or her possession or control or within his or her procurement or which had been but are no longer in his or her possession or control or within his or her procurement, and, if no longer within his or her possession or control or within his or her procurement, his or her belief as to the present whereabouts of those assets.
(6) A reference in this section to a personal insolvency practitioner includes a reference to a person who is no longer a personal insolvency practitioner.”.
Seanad amendment agreed to.
Seanad amendment No. 218:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
163.—(1) Where—
(a) either—
(i) the Insolvency Service refuses to renew an authorisation to carry on practice as a personal insolvency practitioner, or
(ii) an authorisation to carry on practice as a personal insolvency practitioner is revoked or suspended under this Act,
and
(b) the Insolvency Service is of the opinion that adequate arrangements have not been made for handing over to another personal insolvency practitioner of any documents within the possession or in the control, or within the procurement, of the personal insolvency practitioner or former personal insolvency practitioner, as the case may be,
the Insolvency Service may, by notice in writing given to the personal insolvency practitioner or former personal insolvency practitioner, as the case may be, require the personal insolvency practitioner or former personal insolvency practitioner, as the case may be, or any other person in possession or control of such documents, to produce the documents, to a person appointed by the Insolvency Service for the purpose, at a time and place specified by the Insolvency Service in the notice.
(2) Where a person the subject of a requirement under subsection (1) does not comply or fully comply with that requirement, the Insolvency Service may apply in
a summary manner to the Circuit Court, on notice to that person, for an order requiring the person to comply or comply fully, as the case may be, with the requirement within a period to be specified by the Court and the Court may make the order applied for or such other order as it deems appropriate.
(3) Where the Insolvency Service takes possession of documents produced under this section—
(a) it shall serve on the person by whom the documents were produced, a notice giving particulars of the documents and the date of taking possession thereof, and
(b) it may make such enquiries as may be reasonably necessary to ascertain the person or persons entitled to the possession or custody of such documents, or any of them, and may thereafter deal with such documents, or any of them, in accordance with the directions of such person or persons so entitled.
(4) Within 14 days from the service of a notice under subsection (3) on a person, the person may apply in a summary manner to the Circuit Court for an order
directing the Insolvency Service to return the documents taken by the Insolvency Service to him or her or to such other person or persons as the applicant may require and the Court may make the order applied for or such other order as it deems appropriate.
(5) An application under subsection (2) to the Circuit Court shall be made to a judge of that Court for the circuit in which the personal insolvency practitioner the
subject of the application resides or ordinarily carried on within the previous 3 years practice as a personal insolvency practitioner.”.
Seanad amendment agreed to.
Seanad amendments Nos. 219 to 229, inclusive, and amendments Nos. 243 and 244 are related and will be discussed together.
Seanad amendment No. 219:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
“CHAPTER 4
Complaints, Investigations and Sanctions
164.—(1) For the purposes of this Act—
(a) the Director of the Insolvency Service may appoint such members of the staff of the Insolvency Service as he or she deems appropriate to be inspectors for such period and subject to such terms as the Director may determine,
(b) the Director of the Insolvency Service may appoint such other persons as he or she deems appropriate to be inspectors for such period and subject to such terms (including terms as to remuneration and allowances for expenses) as the Director, with the approval of the Minister and the consent of the Minister for Public Expenditure and Reform, may determine.
(2) Each inspector shall be given a warrant of appointment and, when performing any function imposed under this Act, shall, on request by any person affected,
produce the warrant or a copy thereof, together with a form of personal identification.”.
Chapter 4, comprising sections 164 to 174, provides for a comprehensive system of complaints and investigations where improper conduct by a personal insolvency practitioner is alleged and for the imposition of appropriate sanctions. Amendment No. 219 proposes the insertion of section 164 which empowers the director of the insolvency service to appoint members of the staff of the service or other appropriate persons to act as inspectors for the purpose of the Bill.
Amendment No. 220 proposes the insertion of section 165. This section provides for the establishment of a panel of persons to act on a the personal insolvency practitioners complaints committee. When the insolvency service appoints an inspector to carry out an investigation into a personal insolvency practitioner's conduct, it must request the Minister to appoint a complaints committee from the panel to act in relation to the investigation.
Amendment No. 221 proposes the insertion of section 166. This section provides for the making of written complaints to the insolvency service alleging improper conduct by a personal insolvency practitioner and sets out the procedure for the handling of such complaints by the service.
Amendment No. 222 proposes the insertion of section 167. This section provides that where the insolvency service considers that immediate suspension of an authorisation to carry on practice as a personal insolvency practitioner is necessary, it may make an application to the High Court for an order to suspend the personal insolvency practitioner's authorisation.
In exceptional circumstances where there is an immediate risk of financial harm, the insolvency service may apply to the High Court on an ex parte basis for interim suspension of a personal insolvency practitioner's authorisation for a maximum of 14 days.
Amendment No. 223 proposes the insertion of section 168 which provides that an investigation may be carried out by the insolvency service on foot of a complaint or on the service's own initiative. It provides for the appointment of an inspector or inspectors to carry out such an investigation to prepare an investigation report.
Amendment No. 224 proposes the insertion of section 169. This section gives inspectors comprehensive powers to assist them in carrying out investigations, including powers to enter and search premises, carry out examinations and inquiries and conduct oral hearings.
Amendment No. 225 proposed the insertion of section 170. This section sets out the actions to be taken by inspectors and the complaints committee on completion of an investigation. Upon the completion of an investigation, the inspector must submit the investigation report to the complaints committee, which may conduct an oral hearing, if appropriate, for the purpose of observing fair procedure. If the conduct of the personal insolvency practitioner, PIP, is found by the committee to constitute improper conduct, the committee must make a determination with regard to the appropriate sanction and may, if appropriate, impose a minor sanction on the PIP. If the complaints committee determines that the appropriate sanction is a major sanction, the matter must be referred to the High Court. A major sanction is defined in section 147 as the revocation or suspension of a PIP's authorisation or the payment to the insolvency service of up to €30,000 towards the cost of the investigation. The High Court, having given all of the parties an opportunity to make submissions, will impose the sanction it considers appropriate in the circumstances of the case.
Amendment No. 226 proposes the insertion of section 171, which provides that a PIP may appeal to the High Court against a decision of the complaints committee to impose a minor sanction.
Amendment No. 227 proposes the insertion of section 172, which sets out the matters to be considered by the complaints committee or the High Court in considering whether a sanction ought to be imposed on a PIP or the appropriate sanction that might be imposed.
Amendment No. 228 proposes the insertion of section 173, which provides for the publication by the insolvency service of the particulars of convictions and sanctions imposed under this Part.
Amendment No. 229 proposes the insertion of section 174. This provides that the right of access to personal data under section 4 of the Data Protection Act 1988 does not apply to data processed by the insolvency service or an inspector of the complaints committee in the performance of his or her functions relating to investigations.
Is it agreed that we conclude the amendment groupings before starting Private Member's business? Agreed.
I am about to conclude. Amendment No. 243 proposes the insertion of a new Schedule 2, which sets out the provisions applicable to oral hearings conducted in accordance with sections 169 and 170.
Amendment No. 244 proposes to insert a new Schedule 3 to make detailed provision for the establishment and membership of the complaints panel and complaints committee. The complaints panel must contain at least seven persons, all of whom must have relevant experience or knowledge. A complaints committee will be composed of at least three persons, at least one of whom must be a barrister or solicitor. This completes the grouping.
Seanad amendment No. 223:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
168.--(1) Subject to section 166(2) and (4), the Insolvency Service--
(a) shall, following the receipt of a complaint, or may of its own volition, cause such investigation as it deems appropriate to be carried out to identify any improper conduct, and
(b) for the purposes of the investigation, shall appoint an inspector subject to such terms as it deems appropriate--
(i) to carry out the investigation, and
(ii) to prepare an investigation report following the completion of the investigation and to furnish it to the persons referred to in subsection (4).
(2) The Insolvency Service may appoint more than one inspector to carry out an investigation but, in any such case, the investigation report concerned shall be prepared jointly by the inspectors so appointed.
(3) The terms of appointment of an inspector may define the scope of the investigation to be carried out by the inspector, whether as respects the matters or the period to which it is to extend or otherwise, and in particular may limit the investigation to matters connected with particular circumstances.
(4) Where the Insolvency Service has appointed an inspector to carry out an investigation, the inspector shall, as soon as is practicable after being so appointed--
(a) if the investigation arises in consequence of the receipt of a complaint by the Insolvency Service--
(i) give notice in writing to the personal insolvency practitioner to whom the complaint relates of the receipt of the complaint and setting out particulars of the complaint, and
(ii) give the personal insolvency practitioner--
(I) copies of any documents relevant to the investigation, and
(II) a copy of this Part,
(b) if the investigation arises on the volition of the Insolvency Service--
(i) give notice in writing to the personal insolvency practitioner concerned of the matters to which the investigation relates, and
(ii) give the personal insolvency practitioner--
(I) copies of any documents relevant to the investigation, and
(II) a copy of this Part,
and
(iii) without prejudice to the generality of section 169, afford the personal insolvency practitioner an opportunity to respond within 21 days from the day on which notice was given to the personal insolvency practitioner pursuant to subparagraph (i), or such further period not exceeding 30 days as the inspector allows, to the matter to which the investigation relates.
(5) Where an investigation arises in consequence of the receipt of a complaint by the Insolvency Service, the inspector appointed to carry out the investigation--
(a) shall, as soon as is practicable, give the complainant a copy of the notice referred to in subsection (4)(a)(i) given to the personal insolvency practitioner to whom the complaint relates, and
(b) shall make reasonable efforts to ensure that the complainant is kept informed of progress on the investigation.".
Seanad amendment agreed to.
Seanad amendment No. 220:
Section 147: In page 121, before section 147, to insert the following new section:
165.--(1) The Minister shall establish a panel of persons to act on a committee to be known as the Personal Insolvency Practitioners Complaints Committee (in this Part referred to as "the Complaints Committee").
(2) Schedule 3 shall apply in relation to the panel and the Complaints Committee.
(3) Where the Insolvency Service appoints an inspector under section 168(1)(b) to carry out an investigation, it shall thereafter request the Minister to appoint a Complaints Committee from the panel of persons appointed in accordance with subsection (1) and Schedule 3, to perform the functions of the Complaints Committee under this Part as respects the inspector’s investigation of the personal insolvency practitioner concerned.".
Seanad amendment agreed to.
Seanad amendment No. 221:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
166.--(1) A person may make a complaint in writing to the Insolvency Service alleging that improper conduct by a personal insolvency practitioner has occurred or is occurring.
(2) Where the Insolvency Service receives a complaint it shall--
(a) notify the personal insolvency practitioner concerned in writing of the receipt of the complaint,
(b) provide the personal insolvency practitioner with a copy of the complaint and a copy of any documents furnished to the Insolvency Service by the complainant,
(c) refer the personal insolvency practitioner to any regulations made under sections 149 and 161 and to any guidelines or codes of practice issued under section 132, and
(d) request the personal insolvency practitioner to provide a response in relation to the complaint within a time specified in the notification.
(3) Where the Insolvency Service receives a response to the request referred to in subsection (2)(d) it shall consider the response and having considered the response it may, where--
(a) it is satisfied that the complaint is not made in good faith,
(b) it is satisfied that the complaint is frivolous or vexatious or without substance or foundation, or
(c) subject to subsection (6), it is satisfied that the complaint is likely to be resolved by mediation or other informal means between the parties concerned,
determine the complaint accordingly and in that case it shall give notice in writing to the complainant and the personal insolvency practitioner to whom the complaint relates of the decision and the reasons for the decision.
(4) Where the Insolvency Service does not receive a response to the request referred to in subsection (2)(d), or having received a response it considers that none of paragraphs (a) to (c) of subsection (3) apply, it shall cause an investigation of the matter the subject of the complaint to be carried out.
(5) Where a complaint is withdrawn by a complainant before the investigation report which relates to the complaint has been furnished by the inspector concerned pursuant to section 170(2), the Insolvency Service may proceed as if the complaint had not been withdrawn if it is satisfied that there is good and sufficient reason for so doing.
(6) Where, pursuant to subsection (5), the Insolvency Service proceeds as if a complaint had not been withdrawn, the investigation concerned shall thereupon be treated as an investigation initiated by the Insolvency Service, and the other provisions of this Act shall be construed accordingly.
(7) Where a complaint is not resolved by mediation or other informal means referred to in subsection (3)(c), the complainant may, at his or her discretion, make a fresh complaint in respect of the matter the subject of the first-mentioned complaint.".
Seanad amendment agreed to.
Seanad amendment No. 222:
Section 147: In page 121, before section 147, but in Part 5, to in sert the following new section:
167.--(1) Without prejudice to subsection (4), where the Insolvency Service considers that the immediate suspension of an authorisation to carry on practice as a personal insolvency practitioner (whether or not the personal insolvency practitioner concerned is the subject of a complaint) is necessary to protect debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements, until steps or further steps are taken under this Part, the Insolvency Service may, on notice to the personal insolvency practitioner, make an application in a summary manner to the High Court for an order to suspend the personal insolvency practitioner’s authorisation to carry on practice as a personal insolvency practitioner.
(2) The High Court may determine an application under subsection (1) by--
(a) making any order that it considers appropriate, including an order suspending the authorisation of the personal insolvency practitioner the subject of the application for such period, or until the occurrence of such event, as is specified in the order, and
(b) giving to the Insolvency Service any other direction that the court considers appropriate.
(3) The Insolvency Service shall, on complying with a direction of the High Court under subsection (2)(b), give notice in writing to the personal insolvency practitioner concerned of the Insolvency Service’s compliance with the direction.
(4) (a) Where the Insolvency Service considers that the immediate suspension of an authorisation to carry on practice as a personal insolvency practitioner (and whether or not the personal insolvency practitioner concerned is the subject of a complaint) is necessary because of the immediate risk of financial harm to debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements, the Insolvency Service may make an application in a summary manner ex parte to the High Court for an interim order to suspend the authorisation.
(b) The application for such an order shall be grounded on an affidavit sworn on behalf of the Insolvency Service.
(5) (a) The High Court may make an interim order to suspend an authorisation to carry on practice as a personal insolvency practitioner on an application under subsection (4) where, having regard to the circumstances of the case, the Court considers it necessary to do so for the protection of debtors and creditors who are or may become parties to Debt Settlement Arrangements or Personal Insolvency Arrangements.
(b) If an interim order is made, a copy of the order and the affidavit referred to in subsection (4)(b) shall be served on the personal insolvency practitioner as soon as is practicable.
(c) The interim order shall have effect for a period, not exceeding 14 days, to be specified in the order, and shall cease to have effect on the determination by the High Court of an application under subsection (1) for an order to suspend the authorisation to carry on practice as a personal insolvency practitioner.
(6) An application under subsection (4) shall be heard otherwise than in public unless the High Court considers it appropriate to hear the application in public.".
Seanad amendment agreed to.
Seanad amendment agreed to.
Seanad amendment No. 224:
Section 147: In page 121, before section 147, to insert the following new section:
169.--(1) For the purposes of an investigation in relation to a personal insolvency practitioner, an inspector may--
(a) subject to subsections (13) and (14), at all reasonable times enter, inspect, examine and search any premises at, or vehicles in or by means of, which any activity in connection with the practice of the personal insolvency practitioner is carried on,
(b) subject to subsections (13) and (14), enter, inspect, examine and search any dwelling occupied by the personal insolvency practitioner, being a dwelling as respects which there are reasonable grounds to believe records relating to the practice of the personal insolvency practitioner are being kept in it,
(c) without prejudice to any other power conferred by this subsection, require any person found in or on any premises, vehicle or dwelling referred to in any of the preceding paragraphs or any person in charge of or in control of such premises, vehicle or dwelling or directing any activity therein or thereto referred to in paragraph (a) to produce any records, books or accounts (whether kept in manual form or otherwise) or other documents which it is necessary for the inspector to see for the purposes of the investigation, and the inspector may inspect, examine, copy and take away any such records, books or accounts or other documents so produced or require a foregoing person to provide a copy of them or of any entries in them to the inspector,
(d) require any person referred to in paragraph (c) to afford such facilities and assistance within the person’s control or responsibilities as are reasonably necessary to enable the inspector to exercise any of the powers conferred on the inspector under paragraph (a), (b) or (c),
(e) require any person by or on whose behalf data equipment is or has been used in connection with an activity referred to in paragraph (a), or any person having charge of, or otherwise concerned with the operation of, such data equipment or any associated apparatus or material, to afford the inspector all reasonable assistance in respect of its use,
(f) require the personal insolvency practitioner, the personal insolvency practitioner’s employee or the personal insolvency practitioner’s agent to give such authority in writing addressed to such bank or banks as the inspector requires for the purpose of enabling the inspection of any account or accounts opened, or caused to be opened, by the personal insolvency practitioner at such bank or banks (or any documents relating thereto) and to obtain from such bank or banks copies of such documents relating to such account or accounts for such period or periods as the inspector deems necessary to fulfil that purpose, and
(g) be accompanied by a member of the Garda Síochána if there is reasonable cause to apprehend any serious obstruction in the performance of any of the inspector's functions under this subsection.
(2) A requirement under subsection (1)(c), (d), (e) or (f) shall specify a period within which, or a date and time on which, the person the subject of the requirement is to comply with it.
(3) For the purposes of an investigation, an inspector--
(a) may require a person who, in the inspector’s opinion--
(i) possesses information that is relevant to the investigation, or
(ii) has any records, books or accounts (whether kept in manual form or otherwise) or other documents within that person’s possession or control or within that person’s procurement that are relevant to the investigation,
to provide that information or those records, books, accounts or other documents, as the case may be, to the inspector, and
(b) where the inspector deems appropriate, may require that person to attend before the inspector for the purpose of so providing that information or those records, books, accounts or other documents, as the case may be,
and the person shall comply with the requirement.
(4) A requirement under subsection (3) shall specify--
(a) a period within which, or a date and time on which, the person the subject of the requirement is to comply with the requirement, and
(b) as the inspector concerned deems appropriate--
(i) the place at which the person shall attend to give the information concerned or to which the person shall deliver the records, books, accounts or other documents concerned, or
(ii) the place to which the person shall send the information or the records, books, accounts or other documents concerned.
(5) A person required to attend before an inspector under subsection (3)--
(a) is also required to answer fully and truthfully any question put to the person by the inspector, and
(b) if so required by the inspector, shall answer any such question under oath.
(6) Where it appears to an inspector that a person has failed to comply or fully comply with a requirement under subsection (1), (3) or (5), the inspector may, on notice to that person and with the consent of the Insolvency Service, apply in a summary manner to the Circuit Court for an order under subsection (7).
(7) Where satisfied after hearing the application about the person’s failure to comply or fully comply with the requirement in question, the Circuit Court may, subject to subsection (10), make an order requiring that person to comply or fully comply, as the case may be, with the requirement within a period specified by the Court.
(8) An application under subsection (6) to the Circuit Court shall be made to a judge of that Court for the circuit in which the person the subject of the application resides or ordinarily carries on any profession, business or occupation.
(9) The administration of an oath referred to in subsection (5)(b) by an inspector is hereby authorised.
(10) A person the subject of a requirement under subsection (1), (3) or (5) shall be entitled to the same immunities and privileges in respect of compliance with such requirement as if the person were a witness before the High Court.
(11) Any statement or admission made by a person pursuant to a requirement under subsection (1), (3) or (5) is not admissible against that person in criminal proceedings other than criminal proceedings for an offence under subsection (17), and this shall be explained to the person in ordinary language by the inspector concerned.
(12) Nothing in this section shall be taken to compel the production by any person of any records, books or accounts (whether kept in manual form or otherwise) or other documents which he or she would be exempt from producing in proceedings in a court on the ground of legal professional privilege.
(13) An inspector shall not, other than with the consent of the occupier, enter a private dwelling without a warrant issued under subsection (14) authorising the entry.
(14) A judge of the District Court, if satisfied on the sworn information of an inspector that--
(a) (i) there are reasonable grounds for suspecting that any information is, or records, books or accounts (whether kept in manual form or otherwise) or other documents required by an inspector under this section are, held on any premises or any part of any premises, and
(ii) an inspector, in the performance of functions under subsection (1), has been prevented from entering the premises or any part thereof,
or
(b) it is necessary that the inspector enter a private dwelling and exercise therein any of his or her powers under this section,
may issue a warrant authorising the inspector, accompanied if necessary by other persons, at any time or times within 30 days from the date of issue of the warrant and on production if so requested of the warrant, to enter, if need be by reasonable force, the premises or part of the premises concerned and perform all or any such functions.
(15) For the purposes of an investigation, an inspector may, if he or she thinks it proper to do so, of his or her own volition or at the request of the personal insolvency practitioner to whom the investigation relates, conduct an oral hearing.
(16) Part 1 of Schedule 2 shall have effect for the purposes of an oral hearing referred to in subsection (15).
(17) Subject to subsection (12), a person who--
(a) withholds, destroys, conceals or refuses to provide any information or records, books or accounts (whether kept in manual form or otherwise) or other documents required for the purposes of an investigation,
(b) fails or refuses to comply with any requirement of an inspector under this section, or
(c) otherwise obstructs or hinders an inspector in the performance of functions imposed under this Act,
is guilty of an offence.
(18) Subject to subsection (19), where a personal insolvency practitioner is convicted of an offence under subsection (17), the court may, after having regard to the nature of the offence and the circumstances in which it was committed, order that his or her authorisation to carry on practice as a personal insolvency practitioner be revoked and that he or she be prohibited (which may be a permanent prohibition, a prohibition for a specified period or a prohibition subject to specified conditions) from applying for any new authorisation to carry on practice as a personal insolvency practitioner.
(19) An order under subsection (18) shall not take effect until--
(a) the ordinary time for bringing an appeal against the conviction concerned or the order has expired without any such appeal having been brought,
(b) such appeal has been withdrawn or abandoned, or
(c) on any such appeal, the conviction or order, as the case may be, is upheld.
(20) In this section, "records, books or accounts" includes copies of records, books or accounts.
(21) In this section where records, book or accounts are held or maintained in electronic form, the obligation to produce or provide records, books or accounts includes an obligation to produce or provide those records, books or accounts in a legible and comprehensible printed form.".
Seanad amendment agreed to.
Seanad amendment No. 225:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
170.--(1) Subject to subsection (3), where an inspector has completed an investigation, the inspector shall, as soon as is practicable after having considered, in so far as they are relevant to the investigation, any information or records, books or accounts (whether kept in manual form or otherwise) or other documents provided to the inspector pursuant to any requirement under section 169, any statement or admission made by any person pursuant to any requirement under that section, any submissions made and any evidence presented (whether at an oral hearing referred to in section 169(15) or otherwise)--
(a) prepare a draft of the investigation report, and
(b) give a copy of the investigation report together with a copy of this section to--
(i) the personal insolvency practitioner to whom the investigation relates,
(ii) if the investigation arose in consequence of the receipt of a complaint, the complainant, and
(iii) the Insolvency Service,
and shall in writing invite those persons to each make submissions in writing to the inspector on the draft of the investigation report not later than 30 days from the date on which the notice was sent to them, or such further period not exceeding 30 days as the inspector allows.
(2) An inspector who has complied with subsection (1) following the completion of an investigation shall, as soon as is practicable after the expiration of the period referred to in subsection (1)(b), and, having--
(a) considered the submissions (if any) referred to in subsection (1)(b) made before the expiration of that period on the draft of the investigation report concerned, and
(b) made any revisions to the draft of the investigation report which, in the opinion of the inspector, are warranted following such consideration,
prepare the final form of the investigation report and submit it, together with any such submissions annexed to the report, to each of the parties referred to in subsection (1) and the Complaints Committee.
(3) In a case where the investigation report states that the inspector is satisfied that improper conduct by the personal insolvency practitioner to whom the investigation relates has occurred or is occurring, the inspector shall not make any recommendation, or express any opinion, in the report as to the form of sanction (whether a minor sanction or a major sanction) that he or she thinks ought to be imposed on the personal insolvency practitioner in respect of such improper conduct.
(4) Where the Complaints Committee receives an inspector’s report it shall invite--
(a) the personal insolvency practitioner concerned,
(b) the Insolvency Service, and
(c) where the investigation by the inspector arose in consequence of the receipt of a complaint, the complainant,
to make submissions to it in writing regarding the matters the subject of the inspector’s report and the submissions furnished to those parties pursuant to subsection (2) within 30 days of the issue of the invitation or such further period as the Complaints Committee may allow.
(5) Subject to subsection (6), the Complaints Committee may consider the matter on the basis of the inspector’s report and any submissions made to the inspector pursuant to subsection (1), and to the Complaints Committee pursuant to subsection (4), and may also have regard to any documents furnished to the inspector in the course of the inspection.
(6) Where the Complaints Committee is of the opinion that for the purposes of observing fair procedures it is appropriate to do so, it may conduct an oral hearing.
(7) Part 2 of Schedule 2 shall apply for the purposes of an oral hearing referred to in subsection (6).
(8) Having completed its consideration of the matter the Complaints Committee shall make a determination as to whether the conduct of the personal insolvency practitioner the subject of the investigation constitutes improper conduct.
(9) Where the Complaints Committee determines that the conduct of the personal insolvency practitioner does not constitute improper conduct it shall dismiss the complaint.
(10) Where the Complaints Committee determines that the conduct of the personal insolvency practitioner the subject of the investigation does constitute improper conduct it shall determine whether the appropriate sanction is a minor sanction or a major sanction in the circumstances of the case.
(11) Where the Complaints Committee determines that the appropriate sanction is a minor sanction it shall determine which of the sanctions specified in the definition of minor sanction is the appropriate sanction in the circumstances of the case and shall impose that sanction.
(12) Where the Complaints Committee determines that the appropriate sanction is a major sanction it shall determine which of the sanctions specified in the definition of major sanction is the appropriate sanction in the circumstances of the case and in such a case it shall refer the matter to the High Court and make a recommendation as to the appropriate sanction.
(13) In every case where a determination is made under subsections (8) to (12) the Complaints Committee shall furnish a copy of that determination to--
(a) the personal insolvency practitioner concerned,
(b) the Insolvency Service, and
(c) where the investigation by the inspector arose in consequence of the receipt of a complaint, the complainant.
(14) Where a matter is referred to the High Court it shall determine, having given all the parties an opportunity to make submissions, whether the appropriate sanction is a minor sanction or a major sanction in the circumstances of the case, and
(a) where the Court determines that the appropriate sanction is a minor sanction it shall determine which of the sanctions specified in the definition of minor sanction in section 147 is the appropriate sanction in the circumstances of the case and shall impose that sanction, and
(b) where the Court determines that the appropriate sanction is a major sanction it shall determine which of the sanctions specified in the definition of major sanction in section 147 is the appropriate sanction in the circumstances of the case and shall impose that sanction.".
Seanad amendment agreed to.
Seanad amendment No. 226:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new
section:
171.--(1) A personal insolvency practitioner the subject of a determination under section 170 (other than subsection (12) of that section) by the Complaints Committee--
(a) that the personal insolvency practitioner concerned has committed improper conduct, and
(b) that a minor sanction be imposed in respect of improper conduct,
may, not later than 30 days from the date the notice under section 170(13) was issued to the personal insolvency practitioner, appeal to the High Court against the decision.
(2) The High Court may, on the hearing of an appeal under subsection (1) by a personal insolvency practitioner, consider any evidence adduced or argument made, whether or not adduced or made to an inspector or the Complaints Committee.
(3) Subject to subsection (4), the High Court may, on the hearing of an appeal under subsection (1) by a personal insolvency practitioner--
(a) (i) confirm the decision the subject of the appeal,
(ii) determine that the conduct concerned does not constitute improper conduct, or
(iii) confirm the determination that the conduct concerned does constitute improper conduct and impose a different sanction on the personal insolvency practitioner,
and
(b) make such order as to costs as it deems appropriate in respect of the appeal.
(4) The High Court shall, in considering an appropriate sanction, take into consideration the matters referred to in section 172.".
Seanad amendment agreed to.
Seanad amendment No. 227:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
172.--The Complaints Committee and the High Court, as the case may be, in considering whether a sanction ought to be imposed or the appropriate sanction to be imposed shall take into account the circumstances of the improper conduct concerned (including the factors occasioning it) and, without prejudice to the generality of the foregoing, may have regard to--
(a) the need to ensure that any sanction imposed--
(i) is appropriate and proportionate to the improper conduct, and
(ii) if applicable, will act as a sufficient deterrent to discourage improper conduct of that or a similar nature in the future,
(b) the seriousness of the improper conduct,
(c) the extent of any failure by the personal insolvency practitioner to cooperate with the investigation concerned of the personal insolvency practitioner,
(d) any excuse or explanation by the personal insolvency practitioner for the improper conduct or failure to co-operate with the investigation concerned,
(e) any gain (financial or otherwise) made by the personal insolvency practitioner or by any person in which the personal insolvency practitioner has a financial interest as a consequence of the improper conduct,
(f) the amount of any loss suffered or costs incurred as a result of the improper conduct,
(g) the duration of the improper conduct,
(h) the repeated occurrence of improper conduct by the personal insolvency practitioner,
(i) if applicable, the continuation of the improper conduct after the personal insolvency practitioner was notified of the investigation concerned,
(j) if applicable, the absence, ineffectiveness or repeated failure of internal mechanisms or procedures of the personal insolvency practitioner intended to prevent improper conduct from occurring,
(k) if applicable, the extent and timeliness of any steps taken to end the improper conduct and any steps taken for remedying the consequences of the improper conduct,
(l) whether a sanction in respect of similar improper conduct has already been imposed on the personal insolvency practitioner by a court or the Complaints Committee, and
(m) any precedents set by a court or the Complaints Committee in respect of previous improper conduct.".
Seanad amendment agreed to.
Seanad amendment No. 228:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
173.--(1) The Insolvency Service shall publish particulars, in such form and manner and for such period as it deems appropriate, of--
(a) the conviction of a person for an offence under section 148,
(b) a decision of the Insolvency Service refusing to renew an authorisation to carry on practice as a personal insolvency practitioner,
(c) the suspension under section 167(2) of an authorisation to carry on practice as a personal insolvency practitioner, and
(d) the imposition of a major sanction on a personal insolvency practitioner under the Part.
(2) The Insolvency Service may publish particulars, in such form and manner and for such period as it deems appropriate, of the imposition of a minor sanction on a personal insolvency practitioner under this Part.".
Seanad amendment agreed to.
Seanad amendment No. 229:
Section 147: In page 121, before section 147, but in Part 5, to insert the following new section:
174.--Section 4 (as amended by section 5 of the Data Protection (Amendment) Act 2003) of the Data Protection Act 1988 shall not apply to data processed by--
(a) the Insolvency Service,
(b) an inspector appointed under section 164, or
(c) the Complaints Committee,
in the performance of functions assigned to those persons under this Act in so far as those functions relate to carrying out an investigation under this Part.".
Seanad amendment agreed to.
Seanad amendment No. 230:
Schedule: In page 122, before the Schedule, to insert the following new section:
"PART 6
SPECIALIST JUDGES OF CIRCUIT COURT
148.--The Courts (Establishment and Constitution) Act 1961 is amended--
(a) in section 4(2)--
(i) in paragraph (a), by deleting "and",
(ii) in paragraph (b), by deleting "Oireachtas." and substituting "Oireachtas, and", and
(iii) by inserting the following paragraph after paragraph (b):
"(c) such number of specialist judges (each of whom shall be styled "Sainbhreitheamh den Chúirt Chuarda" ("Specialist Judge of the Circuit Court")) as may from time to time be fixed by Act of the Oireachtas.",
(b) in section 6(1)(a), by deleting “President of the Circuit Court or ordinary judge of the Circuit Court” and substituting "President of the Circuit Court, ordinary judge of the Circuit Court or specialist judge of the Circuit Court", and
(c) in section 6A (inserted by section 12 of the Courts and Court Officers Act 2002), by substituting the following for subsection (1):
"(1) Where a judicial office within the meaning of section 6 of this Act is vacated by a person in accordance with subsection (3) of that section, the person shall complete the hearing of any case or cases that have been partly heard by the person in the Court in which the judicial office is vacated if, at the request of the President of that Court--
(a) in case the person is appointed to the office of Chief Justice, President of the High Court or President of the Circuit Court, he or she considers it appropriate to do so, or
(b) in case the person is appointed to the office of--
(i) ordinary judge of the Supreme Court, the Chief Justice requests the person to do so,
(ii) ordinary judge of the High Court, the President of the High Court requests the person to do so, or
(iii) ordinary judge of the Circuit Court or specialist judge of the Circuit Court, the President of the Circuit Court requests the person to do so.".".
Seanad amendment agreed to.
Seanad amendment No. 231:
Schedule: In page 122, before the Schedule, to insert the following new section:
149.--Section 17 of the Courts (Supplemental Provisions) Act 1961 is amended--
(a) in subsection (2) (as amended by section 5 of the Court and Court Officers Act 2002), by deleting "A person" and substituting "Subject to subsection (4), a person",
(b) in subsection (2A) (inserted by section 5 of the Court and Court Officers Act 2002), by deleting "A judge" and substituting "Subject to subsection (4), a judge",
(c) in subsection (2B) (inserted by section 5 of the Court and Court Officers Act 2002), by deleting “A county registrar” and substituting “Subject to subsection (4), a county registrar”,
(d) by inserting the following after subsection (2B) (inserted by section 5 of the Court and Court Officers Act 2002):
“(2C) A specialist judge of the Circuit Court shall be qualified for appointment as an ordinary judge of the Circuit Court.”,
and
(e) by inserting the following after subsection (3):
“(4) Any of the following persons shall be qualified for appointment as a specialist judge of the Circuit Court:
(a) a person who is for the time being a county registrar, having held such office for not less than 2 years continuously, and
(b) subject to subsection (5)--
(i) a person who is for the time being a practising barrister or a practising solicitor of not less than 10 years standing, and
(ii) a judge of the District Court.
(5) Subsection (4)(b) shall come into operation on such day, being not later than 1 January 2014, as the Minister may by order appoint.”.”.
Seanad amendment agreed to.
Seanad amendment No. 232:
Schedule: In page 122, before the Schedule, to insert the following new section:
150.--The Courts (Supplemental Provisions) Act 1961 is amended by inserting the following after section 26:
26A.--(1) Notwithstanding any other enactment conferring functions, powers and jurisdiction on a judge of the Circuit Court, a specialist judge of that court may only perform the functions and exercise the powers and jurisdiction that are conferred upon him or her by this section.
(2) The functions, powers and jurisdiction conferred on the Circuit Court by the Personal Insolvency Act 2012 may, subject to this section, be performed and exercised by a specialist judge.
(3) A specialist judge may make any order that may be made by a County Registrar under section 34(1) of, and the Second Schedule to, the Courts and Court Officers Act 1995, subject to the following modifications and any other necessary modifications--
(a) a reference in the Schedule to a County Registrar shall be construed as a reference to a specialist judge,
(b) section 34(2) of the Act shall not apply to such an order,
and
(c) the deletion of paragraph 8 of the Schedule.
(4) In performing the functions and exercising the jurisdiction conferred upon him or her by this section, a specialist judge shall have all powers ancillary to those functions or that jurisdiction.
(5) A specialist judge may perform functions and exercise powers and jurisdiction in respect of proceedings to which subsections (2) and (3) apply that are before the Circuit Court only in a relevant circuit.
(6) A specialist judge may, in any place in the State outside a relevant circuit, hear and determine any application which he or she has power to hear and determine within that circuit and which, in his or her opinion, should be dealt with as a matter of urgency.
(7) A specialist judge may adjourn proceedings or any part of proceedings before him or her to any other judge of the Circuit Court within a relevant circuit.
(8) A specialist judge may make out of court any orders which he or she may deem to be urgent.
(9) In this section--
"enactment" means--
(a) an Act of the Oireachtas,
(b) a statute that was in force in Saorstát Éireann immediately before the date of the coming into operation of the Constitution and that continues in force by virtue of Article 50 of the Constitution, or
(c) an instrument made under--
(i) an Act of the Oireachtas, or
(ii) a statute referred to in paragraph (b);
“relevant circuit” means, in relation to a specialist judge, a circuit to which he or she is assigned under section 10(3) of the Courts of Justice Act 1947 or section 2A (inserted by section 154 of the Personal Insolvency Act 2012) of the Courts Act 1977.”.”.
Seanad amendment agreed to.
Seanad amendment No. 233:
Schedule: In page 122, before the Schedule, to insert the following new section:
151.--Subsection (9A) (inserted by section 10 of the Financial Emergency Measures in the Public Interest (Amendment) Act 2011) of section 46 of the Courts (Supplemental Provisions) Act 1961 is amended--
(a) in paragraph (g), by deleting “and”, and
(b) by inserting the following after paragraph (g):
“(gg) to each specialist judge of the Circuit Court, the sum of €140,623, and”.”.
Seanad amendment agreed to.
Seanad amendment No. 234:
Schedule: In page 122, before the Schedule, to insert the following new section:
152.--The Courts and Court Officers Act 1995 is amended by inserting the following after section 10:
10A.--The number of specialist judges of the Circuit Court shall not be more than 8.”.”.
Seanad amendment agreed to.
Seanad amendment No. 235:
Schedule: In page 122, before the Schedule, to insert the following new section:
153.--The Courts and Court Officers Act 1995 is amended--
(a) in section 12, in the definition of “judicial office”, by inserting “, specialist judge of the Circuit Court” after “Circuit Court”,
(b) in section 16(7) (as amended by section 8 of the Courts and Court Officers Act 2002), by substituting the following paragraph for paragraph (a):
“(a) When submitting the name of a person to the Minister under this section, the Board shall indicate whether the person satisfies the requirements of--
(i) subsection (2) of section 5 (as amended by section 4 of the Courts and Court Officers Act 2002) of the Act of 1961 (in the case of an appointment to the office of ordinary judge of the Supreme Court or of ordinary judge of the High Court),
(ii) subsection (2) or (2B) of section 17 (as amended by section 149 of the Personal Insolvency Act 2012) of the Act of 1961 (in the case of an appointment to the office of judge of the Circuit Court),
(iii) subsection (4) (inserted by section 149 of the Personal Insolvency Act 2012) of section 17 of the Act of 1961 (in the case of an appointment to the office of specialist judge of the Circuit Court), or
(iv) subsection (2) or (3) of section 29 of the Act of 1961 (in the case of an appointment to the office of judge of the District Court),
in respect of appointment to the judicial office for which the person wishes to be considered and the Board shall not recommend a person to the Minister under this section unless the person satisfies those requirements.”,
(c) by inserting the following after section 19:
19A.--A specialist judge of the Circuit Court shall take such course or courses of training or education, or both, as may be required by the Chief Justice or the President of the Circuit Court, at such time or times as the Chief Justice or, as the case may be, the President of the Circuit Court may specify.”.”.
Seanad amendment agreed to.
Seanad amendment No. 236:
Schedule: In page 122, before the Schedule, to insert the following new section:
154.--The Courts Act 1977 is amended by inserting the following after section 2:
2A.--(1) Section 2 shall not apply to the assignment to a circuit of a specialist judge of the Circuit Court.
(2) Where a specialist judge of the Circuit Court is appointed, the Government shall permanently assign him or her to one or more than one circuit.
(3) Any specialist judge of the Circuit Court who is permanently assigned to a particular circuit may at any time, if he or she so consents but not otherwise, be transferred by the Government to another circuit and shall upon such transfer become and be permanently assigned to that other circuit in lieu of the firstmentioned circuit.
(4) Where a specialist judge of the Circuit Court is permanently assigned to a circuit, the Government, at his or her request, may, if they think fit, terminate his or her permanent assignment to that circuit and the judge may at any time thereafter be permanently assigned by the Government to any other circuit.
(5) Where--
(a) a specialist judge of the Circuit Court is permanently assigned to two or more circuits, and
(b) his or her permanent assignment to one of those circuits ceases under subsection (3) or (4),
nothing in those subsections shall terminate or affect his or her permanent assignment to the circuit or circuits not referred to in paragraph (b) or deprive or relieve him or her of any of the privileges, powers and duties vested in or imposed on him or her by virtue of such permanent assignment.
(6) More than one specialist judge of the Circuit Court may be assigned to the same circuit, whether by operation of this section or section 10(3) of the Courts of Justice Act 1947, or both.”.”.
Will the Minister clarify whether the specialist judges to the Circuit Court will be appointed from the existing judicial complement or will they be new personnel appointed via the Judicial Appointments Advisory Board, JAAB?
It is envisaged under the Bill that the initial specialist judges will come from the existing cohort of county registrars, who will be entitled to make applications to be appointed as specialist judges to the JAAB. The board will be asked to recommend county registrars to fill the posts initially. It is envisaged that up to eight appointments will be made initially. It may be that we will require only six in the start-up phase. Coming from the cohort of county registrars, the initial appointments will ensure that there is no additional public expenditure of any major extent incurred on the courts' side.
County registrars have particular expertise. They will clearly, like everyone else dealing with this legislation, require training in the legislation and how it works. Although they will operate as independent specialist judges, they will still be able to do some of the court work that county registrars currently do.
Ultimately, future appointments thereafter will be extended as the legislation prescribes to practising solicitors and barristers. The JAAB will be involved in the process.
The initial complement will be appointed from the existing body of county registrars. Will they vacate their roles as county registrars?
Will there be a consequential filling of those vacancies?
We have very well qualified county registrars around the country. A number of them have made the case that they do not have enough work to do, which is interesting in the context of the work and the extensive powers that they have. It is not envisaged that, in the short term, this will require the appointment of replacement county registrars. It is envisaged in the short term that some of the general administrative work of county registrars will be taken over by the existing county registrars and the appointees will operate as specialist judges.
It is also envisaged that the specialist circuit judge will, when the assisted decision making capacity Bill is enacted - we hope to publish it fairly early in the new year; it will result in fundamental reforms of the wards of court structure and a complete change of law in this area to modernise our laws - the Circuit Court will have a jurisdiction under it. We would envisage that specialist judges will also absume some jurisdiction under that Bill as well.
The purpose of this is to ensure we have a cohort of judges who are immediately available to deal with any of the debt resolution mechanisms that have to come before them, that they are approved rapidly where approval is appropriate and that, where there is a need for court applications, they are readily made without undue delay. It would defeat the purpose of the Bill if the court aspect of this in the context of what are primarily non-judicial resolution mechanisms created undue delay in them becoming operational. This is designed to ensure that does not occur and that we do not impose an additional burden on the existing Circuit Court Judiciary to the detriment of dealing with other areas of law.
Seanad amendment agreed to.
Seanad amendment No. 237:
Schedule: In page 122, before the Schedule, to insert the following new section:
155.--Section 10 of the Courts of Justice Act 1947 is amended--
(a) in subsection (1), by deleting “by subsections (2), (3), (4), (5) and (6) of this section” and substituting “by this section”,
(b) in subsection (2), by deleting paragraph (e), and
(c) by adding the following after subsection (6):
“(8) Subsections (2), (4) and (5) shall not apply to the distribution of the work, or the despatch of the business, of the Circuit Court that is required to be done by or transacted before a specialist judge of the Circuit Court.
(9) The President of the Circuit Court may, from time to time, by order fix, in respect of any circuit the--
(a) places therein at which sittings before specialist judges are to be held,
(b) times during the year and the hours between which (which may include times and hours other than the times and hours of the sittings of the Circuit Court fixed under subsection (2)) such sittings are to be held,
and, whenever such an order is in force, such sittings within that circuit shall be held--
(i) at the place fixed by the order and not elsewhere, and
(ii) at the times during the year and between the hours fixed by the order.
(10) The President of the Circuit Court may, before exercising his or her powers under subsection (9)(a) in respect of a circuit, consult the specialist judge permanently assigned to that circuit.
(11) Where 2 or more specialist judges are for the time being assigned (whether permanently or temporarily) to a particular circuit, the President of the Circuit Court, after consultation with those specialist judges, may, from time to time, allocate the business of the Circuit Court in that circuit that is required to be transacted before a specialist judge amongst those specialist judges.
(12) Where a specialist judge is for the time being assigned (whether permanently or temporarily) to a particular circuit, the President of the Circuit Court may, after consultation with that specialist judge, in respect of any business of the Circuit Court which may be transacted both before a county registrar for a county, county borough or other area within a circuit and a specialty judge assigned to that circuit, by order--
(a) direct that such business is to be transacted before a county registrar and not before a specialist judge, or
(b) allocate such business amongst the specialty judges and the county registrars concerned.
(13) Every order made under subsection (2), (9) or (12) shall, as soon as may be after it is made, be published in such manner as the President of the Circuit Court may direct.”.”.
Seanad amendment agreed to.
Seanad amendment No. 238:
Schedule: In page 122, before the Schedule, to insert the following new section:
156.--The Courts of Justice Act 1924 is amended by substituting the following section for section 38:
“38.--(1) The following judges shall be addressed in such manner as may be determined by the rules to be made under this Part:
(a) all the circuit judges, other than the specialist judges, and
(b) all the specialist judges.
(2) All the circuit judges, other than the specialist judges, shall rank amongst themselves according to priority of appointment.”.”.
Seanad amendment agreed to.
Seanad amendment No. 239:
Schedule: In page 122, before the Schedule, to insert the following new section:
157.--The Courts of Justice Act 1924 is amended in section 66--
(a) by designating the section as subsection (1), and
(b) by inserting the following after subsection (1):
“(2) Notwithstanding subsection (1), the times at which specialist judges of the Circuit Court may take vacations shall be such times as may be approved of by the Minister.”.”.
Seanad amendment agreed to.
Seanad amendment No. 240:
Schedule: In page 122, before the Schedule, to insert the following new section:
158.--Section 2(2) of the Courts Act 1973 is amended by substituting the following paragraphs for paragraph (a):
“(a) under subsection (2) or (2B) of section 17 of the Courts (Supplemental Provisions) Act 1961, as a judge of the Circuit Court,
(aa) under section (4)(b) (inserted by section 149 of the Personal Insolvency Act 2012) of section 17 of the Courts (Supplemental Provisions) Act 1961, as a specialist judge of the Circuit Court, or”.”.
Seanad amendment agreed to.
Seanad amendment No. 241:
Schedule: In page 122, before the Schedule, to insert the following new section:
159.--Section 14(2) of the Law Reform Commission Act 1975 is amended by substituting the following paragraphs for paragraph (d):
“(d) under subsection (2) or (2B) of section 17 of the Courts (Supplemental Provisions) Act 1961, as a judge of the Circuit Court,
(dd) under section (4)(b) (inserted by section 149 of the Personal Insolvency Act 2012) of section 17 of the Courts (Supplemental Provisions) Act 1961, as a specialist judge of the Circuit Court,”.”.
Seanad amendment agreed to.
Seanad amendment No. 242:
Schedule: In page 122, before the Schedule, to insert the following new section:
160.--(1) The continuity of the administration of justice shall not be interrupted by--
(a) the coming into operation of any provision of this Part, or
(b) the assignment of a specialist judge of the Circuit Court to a circuit, whether permanently or temporarily, under section 10(3) of the Courts of Justice Act 1947 or section 2A (inserted by section 154 of the Personal Insolvency Act 2012) of the Courts Act 1977.
(2) A specialist judge of the Circuit Court may perform the functions and exercise the powers and jurisdiction conferred on him or her by section 150 in proceedings before the Circuit Court, notwithstanding that those proceedings may have been pending at the date of coming into operation of that section.”.
Seanad amendment agreed to.
Seanad amendment No. 243:
Schedule: In page 122, after line 3, to insert the following new Schedule:
SCHEDULE 2
PROVISIONS APPLICABLE TO ORAL HEARINGS CONDUCTED PURSUANT TO SECTIONS 169 AND
170
PART 1
ORAL HEARING CONDUCTED BY INSPECTOR PURSUANT TO SECTION 169(15)
1. The inspector conducting the oral hearing for the purposes of an investigation may take evidence on oath, and the administration of such an oath by the inspector is hereby authorised.
2. The inspector may by notice in writing require any person to attend the oral hearing at such time and place as is specified in the notice to give evidence in respect of any matter in issue in the investigation or to produce any relevant documents within his or her possession or control or within his or her procurement.
3. Subject to paragraph 4, a person referred to in paragraph 2 may be examined and cross-examined at the oral hearing.
4. A person referred to in paragraph 2 shall be entitled to the same immunities and privileges in respect of compliance with any requirement referred to in that paragraph as if the person were a witness before the High Court.
5. Where a person referred to in paragraph 2 does not comply or fully comply with a requirement referred to in that paragraph, the inspector may apply in a summary manner to the Circuit Court, on notice to that person, for an order requiring the person to comply or fully comply, as the case may be, with the requirement within a period to be specified by the Court, and the Court may make the order sought or such other order as it deems appropriate or refuse to make any order.
6. The jurisdiction conferred on the Circuit Court by paragraph 5 may be exercised by the judge of that Court for the circuit in which the person concerned ordinarily resides or carries on any profession, business or occupation.
7. The oral hearing shall be held otherwise than in public.
PART 2
ORAL HEARING CONDUCTED BY COMPLAINTS COMMITTEE PURSUANT TO SECTION 170(6)
1. The Complaints Committee, in conducting the oral hearing for the purposes of assisting it to make a determination under section 170 or for the purposes of observing fair procedures, may take evidence on oath, and the administration of such an oath by any member of the Complaints Committee is hereby authorised.
2. The Complaints Committee may by notice in writing require any person to attend the oral hearing at such time and place as is specified in the notice to give evidence in respect of any matter in issue in the making of the decision under section 170 or to produce any relevant documents within his or her possession or control or within his or her procurement.
3. Subject to paragraph 4, a person referred to in paragraph 2 may be examined and cross-examined at the oral hearing.
4. A person referred to in paragraph 2 shall be entitled to the same immunities and privileges in respect of compliance with any requirement referred to in that paragraph as if the person were a witness before the High Court.
5. Where a person referred to in paragraph 2 does not comply or fully comply with a requirement referred to in that paragraph, the Insolvency Service may apply in a summary manner to the Circuit Court, on notice to that person, for an order requiring the person to comply or fully comply, as the case may be, with the requirement within a period to be specified by the Court, and the Court may make the order sought or such other order as it deems appropriate or refuse to make any order.
6. The jurisdiction conferred on the Circuit Court by paragraph 5 may be exercised by the judge of that Court for the circuit in which the person concerned ordinarily resides or carries on any profession, business or occupation.
7. The oral hearing shall be held otherwise than in public unless--
(a) the personal insolvency practitioner to whom the investigation concerned relates or, if the investigation arose in consequence of the receipt of a complaint, the complainant, makes a request in writing to the Insolvency Service that the hearing (or a part thereof) be held in public and states in the request the reasons for the request, and
(b) the Insolvency Service, after considering the request (in particular, the reasons for the request), is satisfied that it would be appropriate to comply with the request.”.
Seanad amendment agreed to.
Seanad amendment No. 244:
Schedule: In page 122, after line 3, to insert the following new Schedule:
“SCHEDULE 3
COMPLAINTS PANEL AND COMPLAINTS COMMITTEES
1. Subject to paragraphs 2 and 3 of this Schedule, on the coming into operation of section 165 of this Act, the Minister shall, with the consent of the Ministers for Finance and Public Expenditure and Reform, establish and maintain a panel which shall be composed of at least 7 persons.
2. Each of the persons appointed to the panel referred to in paragraph 1 of this Schedule shall be a person whom the Minister considers to have relevant experience or special knowledge which will enable the persons appointed to carry out their functions under this Act.
3. At least two of the persons appointed to the panel referred to in paragraph 1 of this Schedule shall be a solicitor or a barrister.
4. Subject to paragraph 6 of this Schedule, a person shall remain on the panel established under this section for such period as may be specified on appointment unless he or she sooner dies or requests the Minister that his or her appointment be revoked, but unless he or she has died shall be eligible to be appointed to the panel for a further period or periods.
5. A vacancy in the membership of the panel may be filled by the Minister in the same manner as is specified in paragraphs 1 and 2 as respects the appointment of persons to be members of the panel.
6. A person who has been appointed to be a member of a Complaints Committee as respects a particular investigation shall continue as a member of the panel and of that Complaints Committee until the conclusion of the deliberations of that Complaints Committee as respects the matter concerned notwithstanding that the period for which the panel was appointed has expired.
7. A member of the panel appointed to a Complaints Committee shall be paid such remuneration and allowances for expenses as the Minister may determine with the consent of the Minister for Public Expenditure and Reform.
8. A Complaints Committee shall be composed of no less than three persons at least one of whom shall be a barrister or solicitor.
9. The Minister, with the consent of the Minister for Finance, may at any time remove a member from the panel for stated misbehaviour.
10. A Complaints Committee shall be independent in the discharge of its functions.
11. The Minister shall make available to a Complaints Committee such services, including staff, as may be reasonably required by that Committee.”.
Seanad amendment agreed to.
Seanad amendment No. 245:
Title: In page 9, line 39, before “AND” to insert the following:
“TO PROVIDE FOR THE APPOINTMENT, FUNCTIONS, POWERS AND JURISDICTION OF NEW JUDGES OF THE CIRCUIT COURT TO BE STYLED SPECIALIST JUDGES OF THE CIRCUIT COURT AND, FOR THAT PURPOSE, TO AMEND THE COURTS (ESTABLISHMENT AND CONSTITUTION) ACT 1961 AND THE COURTS (SUPPLEMENTAL PROVISIONS) ACT 1961 AND CERTAIN OTHER ENACTMENTS, TO PROVIDE FOR THE REGULATION, SUPERVISION AND DISCIPLINE OF PERSONAL INSOLVENCY PRACTITIONERS,”.
Seanad amendment agreed to.
Before we conclude, there are some typographical errors to which I need to draw the attention of the House for completeness. I ask that the House note some slight typographical corrections to the amendments made by the Seanad in the case of the following points. I have referred to them in passing as we have gone through them, but it is important to ensure that, when the Bill is published, they are clearly addressed.
In amendment No. 23, the reference to "Insolvency Services" in section 3(d) should read simply "Insolvency Service".
In amendment No. 167, the reference in subsection (2) to "subsection (4)" should be to "subsection (3)". In amendment No. 192, within the inserted section 44B, in subsection (2)(f), there should be no semi-colon after "arrangement". Finally, I ask the House to note the requirement for a slight correction of alignment in amendment No. 40 such that in subsection (10), the text after paragraph (d) will be aligned to subsection level.
Are the corrections noted? Noted. Agreement to Seanad amendments will be reported to the House and a message will be sent to Seanad Éireann acquainting it accordingly.
I thank Members on all sides of the House for their very constructive engagement, which has contributed meaningfully to the development of the legislation. I thank the members of the Joint Committee on Justice, Defence Equality and its Chairman, Deputy David Stanton, for their careful deliberation on the heads of the Bill, which likewise was of substantial benefit in its development. I also thank my departmental officials for the extraordinary work they have done on this very complex measure. It is a measure that is designed and intended to provide substantial assistance to those who find themselves in major debt difficulties.
The Taoiseach was asked, quite properly, by Deputy Micheál Martin this morning about the coming into force of this legislation. I take this opportunity to comment briefly in that regard. Mr. Lorcan O'Connor has been appointed director of the new insolvency agency and a number of staff are already recruited. Remaining staff will be recruited as part of an ongoing process. It is envisaged that the guidelines to be published by the insolvency agency will be completed in the first quarter of next year. These will deal with some of the issues we have covered today such as what is meant by reasonable expenses and so on.
Regulations will be prepared with regard to the licensing of personal insolvency practitioners. Software is being put in place for the electronic exchange of information under the legislation and the delivery of information between personal insolvency practitioners, the insolvency agency and the Courts Service. It is a target of the insolvency service to have its website up and running by 1 March to provide the maximum information and guidance to the general public with regard to the mechanisms available to deal with debt resolution processes. Documentation is being prepared setting out the information applicants must provide in respect of a debt relief notice, debt settlement arrangement and personal insolvency arrangement. It will be possible for all of these data to be filled in online. It is anticipated, once the regulations have been published, that the licensing process in respect of personal insolvency practitioners will proceed during April and May.
In short, our objective is to have the measures set out in the legislation operational as soon as possible. As I said, the insolvency service intends to have its online functionality up and running as early as possible in March. If our targets are met, the insolvency service will have completed within months of the enactment of the Bill what took two years to complete in Northern Ireland and three years in the United Kingdom. I am hopeful that the maximum information will be available to the public as early as possible. My Department will do what it can to ensure it is available. In the meantime, the insolvency service has established an ongoing liaison with the Money Advice & Budgeting Service and other bodies engaged in assisting individuals with debt relief. I thank Members again for their constructive contributions and my officials for their exceptional work in putting together this comprehensive and radical piece of reforming legislation.
Seanad amendments reported.
