Joint Committee on Legislation debate -
Friday, 29 Mar 1985

SECTION 45.

Senator O'Leary

I move amendment No. 2.

In page 18, subsection 1, line 37 to delete "£1,000" and substitute "£2,500".

Under section 45(1) it is proposed that:

A bankrupt shall be entitled to retain, as excepted articles, such articles of clothing, household furniture, bedding, tools or equipment of his trade or occupation or other like necessaries for himself, his wife, children and dependent relatives residing with him, as he may select, not exceeding in value £1,000.

That was considered earlier by the bankruptcy committee in chapter 12 of their report. They said that there was a good reason for it and they made a recommendation that the present limit of £20 should be increased to £100. Paragraph 12.2.1. states:

The purpose of exempting certain furniture, tools, etc., from the vesting provisions was to keep the bankrupt in employment and at the same time to keep him and his family and household together as long as possible in the hope that he might in time be rehabilitated and be in a better position to meet his obligations to his creditors. We regard these provisions as very desirable and consider that they should be retained in principle.

The Minister in drafting the Bill has proposed a change from £20 to £1,000. I welcome that attitude by the Minister. If we are serious in trying to retain a certain amount of dignity for the person even £1,000 is quite unrealistic in certain circumstances. When one considers the value of property that a person is reasonably expected to keep, for example, a cooker, beds, linen, tables, chairs, floor covering and tools of the person's trade, £1,000 is very little. Effectively what would happen is that the Official Assignee might give him a loan of the remainder but he does not own even the basic necessities of civilised living. I am conscious of the fact that if one puts it too high it will in some way reduce the disadvantages which are attached to being bankrupt. A figure of £2,500 is not very excessive. If one thinks of the level of insurance which one has on the ordinary contents of one's house these days, £1,000 would not get you past the kitchen. In these circumstances I propose £2,500.

Deputy Calleary

Just a short comment to agree with Senator O'Leary and to congratulate the Minister for having come quite a long way. I feel that Senator O'Leary has made the argument and there is very little that I can add to it. When one considers the cogent remark he made concerning the cost of ordinary household insurance, the figure of £2,500 which he has requested is just enough to leave the person with dignity, to keep the home together. At the same time it protects the creditors. I support Senator O'Leary's amendment.

Deputy Noonan (Limerick East)

There are two relevant remarks which I want to make. The figure can be changed by ministerial order from time to time by virtue of section 138, and also the section gives the court power to allow the bankrupt to retain any excepted articles up to any amount on application by the bankrupt. It is not an absolute cut and dried situation. I accept the arguments made by Senator O'Leary and I accept the amendment.

Deputy Taylor

The Minister might consider leaving this issue to the discretion of the Official Assignee alone rather than providing a need for an actual court application. There should be greater discretion given to the Official Assignee on his own account. One could visualise a situation where the bankrupt might have a machine worth £3,000 or £4,000 which, if left with him, he could use to support his family and even generate from it a contribution or a surplus over that to go into the fund for his creditors. I would ask the Minister to consider a slight revamp to give a discretion to the Official Assignee alone that would enable him, where there was an income generating capacity by way of machinery, to leave that with the bankrupt on an interim basis.

Deputy Noonan (Limerick East)

Subsection (2) probably meets what you have in mind, because if the request is made to:

The Official Assignee, in writing, not to dispose of the remainder of any such articles as are referred to in subsection (1) the Official Assignee shall not dispose thereof except in accordance with an order of the Court.

Deputy Taylor

Perhaps to some extent.

Amendment agreed to.

Question proposed: "That section 45, as amended, stand part of the Bill."

Deputy Noonan (Limerick East)

This section continues the existing provisions entitling the bankrupt to retain certain artices known as "excepted articles", for example, household furniture, tools of his trade etc., which do not therefore vest in the Official Assignee under section 44. The maximum value of the articles is being increased from £20 to £1,000 and now, as a result of the amendment, to £2,500. The court however is empowered to extend this monetary limit on the application of the bankrupt. The committee recommended the re-enactment of the existing provisions in order to give the bankrupt an opportunity of continuing in employment and of keeping his family and household together in the hope that he might in time be rehabilitated and be in a better position to meet his obligations to his creditors.

Question put and agreed to.

Sitting suspended at 1.05 p.m. and resumed at 2.15 p.m.