Dáil Éireann Debate, Wednesday - 18 April 2012
113 Deputy Micheál Martin asked the Minister for Finance if he agrees with Moodys agency that say the personal insolvency Bill as proposed will lead to further downgrades if it leads to a write down on mortgage debt; and if he will make a statement on the matter. [16223/12]
View answerThe proposed personal insolvency reforms are one of the key measures to address the mortgage arrears problem. However, the approach of the Government on this issue has been clear and it is that mortgage holders who can meet their loan obligations should continue do so and that appropriate assistance should only be afforded those mortgage holders, or other borrowers, who are experiencing real and genuine difficulty in meeting their commitments. Accordingly, the general scheme, in the form of draft heads, of a Personal Insolvency Bill, as published by the Minister for Justice, Equality and Defence, contains strict eligibility criteria to avail of the measures proposed and also provides that the non judicial Personal Insolvency Arrangement option, which is proposed to address unsustainable secured debt, will only be available if other less intrusive options, such as the proposed Debt Relief Certificate or the Debt Settlement Arrangement — both of which exclude secured debt from their remit — are not viable alternatives to make a borrower solvent.
In particular, the personal insolvency proposals are not intended to provide for any blanket write down of debt either to address the issue of negative equity or otherwise. Therefore, it is very premature at this stage to attribute significant and general write downs in Irish mortgage portfolios to this proposed legislation, not least when the Bill remains to be finalised and approved by Government.
