I move amendment No. 1:
In page 10, between lines 7 and 8, to insert the following:
"Amendment of section 102 of Principal Act
14. Section 102 of the Principal Act is amended in subsection (6)(f) by the insertion of "without the agreement of the secured creditor" after "security".".
The Personal Insolvency Act was introduced to address deficiencies in the law and provide for fair and reasonable settlement of debt without having to resort to bankruptcy, which was then the only solution available in Ireland. In most cases, bankruptcy required the sale of the family home. One of the main objectives of the legislation was to try to create a solution to protect citizens from losing their family homes given the exceptional situations that emerged following the collapse of the banks and the property market, which saw the value of homes fall by more than 50% and the inability of thousands of people to repay huge mortgages taken out during the Celtic tiger years.
As we are very much aware, this process saw the bailout of the banks by Irish taxpayers and the assumption was generally held that the restructuring of mortgaged homes would follow. From very early on, it was clear the banks were resistant to complying with these clearly stated aspects of the Personal Insolvency Act, to such an extent the Government was forced to introduce the Personal Insolvency (Amendment) Act 2015, which provided for an appeals process when banks refused to agree to arrangements constructed by personal insolvency practitioners drawn up within the parameters of the Act. However, the banks continued to challenge these appeals process solutions at great cost to the State. It took several High Court rulings to deem most of these solutions legal and enforceable.
Unfortunately, the High Court stated debt for equity swaps could not be enforced by the courts as the legislation did not allow the courts to do so. As the law stands, the agreement of the banks is required to allow these cases to proceed. The solution in this proposed amendment to section 102(6)(f) is the only realistic one available to older mortgage holders aged over 50 because they do not have the time to avail of other solutions. Our laws should be for the benefit of all citizens irrespective of their age. The main objection of the banks to equity swaps is that they are too complicated to draw up. This is not a valid argument. Swaps do not adversely affect the balance sheets of banks and they certainly do not require a further cost burden to be placed on the Irish taxpayer.
The amendment I propose is very simple and straightforward but, I believe, will allow our courts to force the most needed solution on our banks. I call on the Government to accept the amendment.