I understand the Minister was replying to amendment No. 10 when the debate was adjourned.
Personal Insolvency Bill 2012: Report Stage (Resumed)
Debate resumed on amendment No. 10
In page 26, line 8, to delete "€20,000" and substitute "€30,000".
- (Deputy Pádraig Mac Lochlainn)
I had already addressed the issues in amendment No. 10 and had set out my reason for opposing amendments Nos. 10 and 11.
Is amendment No. 10 being pressed?
Question, "That the figures proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 11 not moved.
Amendments Nos. 12 and 13 are related and amendment No. 14 is an alternative to amendment No. 13. Therefore, amendments Nos. 12 to 14, inclusive, may be taken together by agreement.
I move amendment No. 12:
In page 26, line 9, after “income” to insert the following:
", calculated in accordance with subsection (5),".
This amendment improves on the existing construction for avoidance of doubt by cross referencing the income criteria with revisions of subsection (5).
Amendment No. 14 seeks to increase from €60 or less to €150 or less the amount of disposable income which a person may have at the end of the month in order to qualify for a debt relief notice. The amount involved is very small. We are now getting into the arbitrary debate around what level one should set a monetary amount. However, €60 is very little. As I stated on Committee Stage, the price of petrol is continually rising and the cost of many other commodities which would be regarded as daily or weekly necessities are also rising. The €60 amount provided for in the Bill is very low. I believe the Minister should give serious consideration to increasing the amount to €150.
From where did the wisdom to set the level at €60 come? Are we looking up the road again to Northern Ireland or did it come from the Money Advice and Budgetary Service, MABS? Does the Minister not believe we should be a little more charitable to people in this instance?
I will respond to amendments Nos. 13 and 14, following which Deputy Mac Lochlainn can then come in. Amendments Nos. 13 and 14 seek to raise the limit for the amount of disposable income above that permitted for necessary household expenses from €60 to, in the context of Deputy Mac Lochlainn's amendment, €80 and in the context of Deputy Collins' amendment, €150. With regard to the €60 provision, that is the limit of the qualifying amount of money left to the debtor after meeting reasonable household living expenses in the context of the legislation. Effectively, it is a sum perceived to be surplus to reasonable household living expenses. Certain assets that an individual would use in his or her daily lives are expressly excluded from being regarded as relevant in the context of their circumstances when facilitating the write-off of debt. Where a person has money in excess of his or her reasonable expenses it is reasonable to expect that it be used to discharge some of his or her debt to creditors, including local traders or a local credit union.
Deputy Collins is proposing that where a person, having met his or her reasonable expenses at the end of the specified period, has additional money he or she should be allowed to retain €150 to spend as they choose rather than, for example, repay at least a portion of the debt to the local credit union. I cannot agree to that. I do not believe that is fair, in particular to other members of the credit union or to a local shop owner in respect of debt run up by a family in financial difficulty to whom he or she gave some leeway. Is it reasonable, where a substantial debt has been run up, that people should retain €150 as discretionary spend and not be entitled to use any portion of it to discharge any portion of debt? I do not believe that is fair.
I have greater sympathy with the proposal put forward by Deputy Mac Lochlainn. It is a matter of subjective judgment as to whether the amount should be set at €60, €70 or €80. There is no monopoly of wisdom on this. It is somewhat arbitrary but not entirely arbitrary, as I will explain. It is important that this legislation is not seen in isolation from everything that is relevant to it. There are issues which we must address to ensure the legislation does not affect detrimental unintended consequences. This is effectively a balancing act. There are subjective judgments to be made as to what is the appropriate sum.
As I said, I have greater sympathy with the proposal put forward by Deputy Mac Lochlainn. It is not acceptable to permit people to retain €150 of discretionary money and to ignore their creditors. Whether the amount should be set at €60, €70 or €80 is debatable. Following considerable consideration of the matter, the Government determined that the appropriate amount should be €60. While I cannot accept the proposed amendments, I will keep this matter under review prior to enactment of the Bill.
Amendments will be tabled in the Seanad, and I will make reference to these later, which will bring the Bill back to this House. Certain issues will be dealt with in the Seanad. It was the Government's considered view that in the circumstances €60 of discretionary income after reasonable expenses had been met was a reasonable sum and that thereafter it would be unfair to creditors. In the circumstances I must oppose the two amendments.
I am sure the Minister noted the reason we tabled amendments Nos. 13 and 15, which we will discuss, is relative to the €30,000. If the threshold is increased from €20,000 to €30,000 the other thresholds must also be increased. The credit unions, FLAC and other interested parties have made representations to Deputies on the legislation as is their democratic right. They work on the ground at the coal face. Credit unions are unsecured lenders and they are concerned about the implications of the Bill for their community services. Somebody in the community has lent and the credit union has a responsibility to the community. I understand the point the Minister is making on setting a limit. I presume the free legal advice centres also speak from their direct experience on the ground and have not arbitrarily made up the figure of €30,000. People with more than the €20,000 threshold proposed in the Bill will have to choose another option, but other options will probably not be viable because of what those people have available to resolve their differences. The Minister would probably agree that it is a case of how long is a piece of string, but I ask him to consider this and review how the process works out as it is put in place in the coming years.
I seek clarification. I agree there is no right answer to the amount of €60. Each month has an average of 4.3 weeks which leaves approximately €14 for the month. If a debtor has a partner and two children, will the amount be €60 for the household, which would work out at €3.50 per person per week, or is it intended that if dependants are involved, particularly children, the amount would be extended?
To turn that on its head, if a debtor has dependants and children his or her reasonable expenses will be higher. In other words, the amount which such an individual would be effectively entitled to exclude from the pot will be higher than a single individual with no dependents. The area of discretion or elasticity in this is dependent on individual circumstances. There will be guidance as to what amounts to reasonable expenses but quite clearly what are reasonable expenses for a single individual living on his or her own with no dependants is quite different to what are reasonable expenses for an individual with a dependent spouse and dependent children. The €60 applies to the individual and his or her debt. That person will not receive additional sums because of the dependency of other individuals: the dependency of other individuals is taken into account having regard to the amount of reasonable expenses to be discounted from the pot in dealing with issues under the debt relief mechanism.
To answer Deputy Mac Lochlainn, let us remember we do not have debt settlement arrangements at present. If one runs up a substantial amount of unsecured debt, providing a mechanism whereby one may be able to extricate from debt based on discharging a reasonable proportion of it in the context of one's income and personal financial circumstances would provide a light at the end of the tunnel. In this context it is envisaged a part of the debt may not be discharged.
The Deputy is correct to state the credit unions are making certain representations on this as is FLAC and there are various perspectives. FLAC does fantastic work and it deals with debtors all the time. It represents people in debt and tries to make the best case it can for those in debt. On the other side of it are the creditors who may be ordinary individuals with part of the debt owing to them not being paid. They may find themselves trying to engage in a debt settlement arrangement because they may get into personal difficulties. There are also the credit unions which are understanding of individuals in financial trouble, but which need to try to recoup the moneys they lend out for the benefit of the other members of the credit union who may want to borrow from it and for the liquidity and security of the credit union.
All of these different interests are valid. They are all what I describe as good-faith interests. We must try to make a judgment as to where to find the balance. This means one does not please either side totally in where one goes. One tries to find the balance. As I stated, one would almost need the judgment of Solomon in some of these cases. Is there a perfect figure in a range of areas here? There is not. This is the judgment that has been made after a great deal of thought, teasing out and looking at what happens in other jurisdictions.
If a wrong judgment is made and we discover along the route after the legislation has been tested and working for a while that amendments are required to it I will not be slow to introduce them, whether they are on what might be perceived to be a minor issue or a major issue. We need to get it up and running and get a sense of it. We need to have some regard to the lessons from other jurisdictions and try to find the balance between the different valid cases made on each side either from the perspective of creditors or debtors.
What makes the debt relief notice somewhat less controversial to address is that it generally does not have a whole heap to do with banks and the mistakes banks made. However, it has a minor heap to do with them in that some of it will be credit card debt. MABS deals all the time with people who have got themselves into credit card debt. It is not what I describe at this level as major debt of hundreds of thousands of euro or millions of euro through very bad borrowing decisions or bad lending decisions made by banks which should have been more diligent in what they were doing. In this particular area we are just trying to find a balance. We believe this is the right balance for the start of the legislation. It is very worthwhile that we tease through out.
Amendment agreed to.
Amendment No. 13 not moved.
I move amendment No. 14:
In page 26, line 9, to delete “€60” and substitute “€150”.
Question, "That the figure proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 16 is an alternative to amendment No. 15 and they may be discussed together.
I move amendment No. 15:
In page 26, line 11, to delete “€400” and substitute “€535”.
I will not labour the point on amendment No. 15. The logic extends from the previous amendment.
The amendments from Deputies Mac Lochlainn and Collins relate to raising the value of the asset eligibility criteria to apply to debt relief notices. I explained at some length on Second Stage the concepts behind the debt relief notice. It provides for the write-off of unsecured debts of up to €20,000 subject to certain conditions. These conditions must of necessity be stringent so as to prevent abuse and undue damage to the interests of creditors. Such creditors themselves, as already stated, may be struggling with debt issues. The amount set out in the Bill in regard to qualifying assets of €400 or less mirrors that in the comparable debt relief order process in operation in England and Wales since 2009 and in Northern Ireland since 2011.
This amount is exclusive of an asset disregard of up to €6,000 in respect of household equipment, books, tools etc. This latter exemption does not feature in the processes in the United Kingdom. Allowing much greater asset disregard in the context of a potential full debt write-off of up to €20,000 would risk enforcement action by creditors prior to any application for a debt relief notice, which may leave those in debt in a much more difficult position. A delicate balance must be maintained. While we will keep this and other criteria under review, I do not intend at this point to revise the figure. I oppose the amendments.
The Minister stated he would keep many items under review, which is understandable. What is the mechanism for review? Will there be a quarterly or six monthly review? What is the modus operandi?
The legislation, if passed, will provide for a total review of how it is working after three years. There is no question of our all going to sleep for three years. The legislation is like any other. It is very new and we are in the start-up phase. I certainly intend to keep a very watchful eye on how it is working in practice. We probably need a full year's experience of how it is working. Even if in that period some blindingly obvious difficulty arises, an amendment will be made, if required. It would be a little odd to amend legislation within a few weeks of its enactment but I certainly intend to keep a close watch on how this legislation is working. The head of the insolvency agency will be in a position to indicate whether particular difficulties are being highlighted. I have no doubt a cohort of personal insolvency practitioners will have adequate opportunity to indicate whether a particular difficulty has arisen. Of course, this will come to the attention of Members. We will certainly monitor the working of the legislation in my Department.
It is reasonable to have the legislation in place undisturbed for at least a year unless there is a dramatic issue requiring redress. I assure the Deputy that if a major difficulty arises within the three year span, it will be addressed. It is not just a question of saying there will be a review after three years because I want to ensure there is very sound and workable legislative architecture dealing with insolvency at the various levels of indebtedness and in the context not only of what are primarily non-judicial debt-resolution mechanisms but also of the bankruptcy changes that are being effected.
Question, "That the figure proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 16 not moved.
I move amendment No. 17:
In page 26, to delete lines 16 to 19 and substitute the following:
"(e) is, taking into account the factors referred to in subsection (7), insolvent and has no likelihood of becoming solvent within the period of 3 years commencing on the application date, while also maintaining a reasonable standard of living for himself or herself and his or her dependants;".
This is essentially a technical drafting amendment to replace the existing section 24(2)(e) with new text which now includes a cross-reference to subsection (7). It also includes a reference to the standard of living of the debtor's dependants in addition to himself or herself. The amendment provides greater clarity on the intent of the sub-paragraph and I hope it will be supported by Members of the House.
Amendment agreed to.
I move amendment No. 18:
In page 26, line 21, to delete "in the preceding 2 years—" and substitute the following:
"during the period of 2 years ending on the application date—".
The amendment provides greater clarity in the interpretation of the two year period in regard to the potential transactions carried out by the debtor at an undervalue or by the giving of a fraudulent preference. It now makes clear that it is the two year period ending on the application date for the debt relief notice.
Amendment agreed to.
I move amendment No. 19:
In page 26, line 25, to delete "subsection (11)" and substitute "subsection (4) or (11)".
This amendment expands the cross-reference to section 24(2)(h) to include also subsection (4).
Amendment agreed to.
I move amendment No. 20:
In page 27, between lines 8 and 9, to insert the following:
"(c) the Minister for Justice and Equality shall, no later than 30 days after the enactment of this Bill publish detailed guidelines defining "reasonable household expenses" for the purposes of section 24(5)(a).".
We need a definition of "reasonable household expenses". There are routine medical expenses and emergency expenses so there needs to be a definition. We are saying that we would like to see detailed guidelines within 30 days of the enactment of the Bill. There is too much vagueness in the Bill as it stands.
Amendment No. 20 would effectively require the Minister for Justice and Equality to publish detailed guidelines defining "reasonable household expenses" for the purpose of the Bill. I thank the Deputy for raising this matter. It is, of course, important, but the amendment would impose a duty on the Minister for Justice and Equality to define "reasonable standard of living" for each applicant for a debt relief notice. As I stated, the Deputy will recognise the inherent difficulties his proposal would present. The financial circumstances of every debtor will vary greatly so there is no simple definition of or guideline on "reasonable household expenses". What is reasonable will vary depending on the background circumstances.
This area will be addressed by the insolvency service in the context of the provisions that apply to its operation. I assure the Deputy that there will be no undue delay in addressing this aspect of the debt relief notice process. It would be unwise, however, to commit to a very specific timeframe, such as 30 days after the enactment of the legislation, as specified by the Deputy. The main approved intermediary for the processing of applications for debt relief notices will be the money advice and budgeting service, MABS. That organisation has significant experience and knowledge in devising debt plans and is very conscious of what is required by those with debt difficulty to be able to attain enough income to provide adequately for themselves and their dependants while at the same time addressing their individual debt problems.
The insolvency service will work closely with MABS and other organisations with expertise and interests in seeking to devise broad, realistic and workable guidelines. It is important we have guidelines in regard to calculating net disposable income in the context of an application for a debt relief notice which can have regard to the different background circumstances and dependencies of an individual in debt. I do not believe, nor do I imagine does the Deputy, that we can arrive at an individually tailored figure for each of the potential 7,000 applicants for a debt relief notice. Their circumstances will vary from case to case. In this context, quite broad guidelines will be necessary to take account of the various circumstances that can arise.
For the reasons given, I oppose the amendment. It is envisaged, however, that the guidelines will be in place at a relatively early stage to facilitate the operation of the debt relief notice process. However, we could not specify a period of 30 days. We envisage that, if the legislation is passed in both Houses and enacted before Christmas, the target start-up date will be 1 March. It may well be that it will take six to seven weeks for guidelines to be put in place in the context of the work that will have to be undertaken by the insolvency agency and the consultation that will be necessary with MABS and other organisations. We want to give the relevant parties flexibility in their approach.
Could the Minister assure us that guidelines will be in place before any debt relief plans are implemented?
It is my objective to have guidelines in place.
Amendment put and declared lost.
Amendments Nos. 21 and 22 are related and may be discussed together.
I move amendment No. 21:
In page 27, line 11, after "its" to insert "net".
Sometimes the inclusion of a single word can make a significant difference. This amendment proposes that when an assessment is made, it is net assets that should be considered, that is, the figure that is arrived at after liabilities are deducted. The objective here is to ensure that a realistic assessment is made and the debt settlement is fair. The same principle applies in regard to amendment No. 22, which proposes that the word "irrespective" be replaced with the phrase "taking in to account" in respect of mortgages or other charges against an asset. Our concern is to ensure that the assessment of assets is done realistically in the context of net available resources.
I am not sure what effect the proposed changes are designed to achieve in the context of the debt relief notice. The current provision is clear in its indication that it is the market value of an asset that is considered, irrespective of whether the asset in question is subject to any charge. In any event, given that the permitted qualifying asset level in this process is €400, I am not sure whether this is a significant consideration. To make the changes the Deputy is proposing would completely alter the nature of the debt relief notice process and could potentially qualify an applicant even where he or she has a large property which is in negative equity. That is not the intention of the process. For this reason, I do not propose to accept the amendments.
Amendment put and declared lost.
I move amendment No. 22:
In page 27, line 12, to delete "irrespective of" and substitute "taking in to account".
Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
I move amendment No. 23:
In page 27, line 16, to delete "paragraph (c)(iii)" and substitute "paragraph (c)(ii)".
This is a technical amendment to correct a cross-reference to section 24(6)(b)(ii).
Amendment agreed to.
Amendments Nos. 24, 30, 88a, 91 to 94, inclusive, 134, 137 and 137a are related and may be discussed together.
I move amendment No. 24:
In page 27, between lines 17 and 18, to insert the following:
"(iv) assets necessary for the maintenance or education of any children of the debtor who are aged 18 years or under,".
This amendment seeks to provide, in the calculation of a person's assets, for any materials relating to the education of his or her dependants under the age of 18. We discussed this issue in detail on Committee Stage and I note that the Minister has tabled several related proposals.
This was an issue Members raised on Committee Stage, at which point I gave an undertaking to consider it for Report Stage. Deputy Niall Collins's amendment No. 24 raises the issue of a special exemption in the asset test for the debt relief notice in respect of books and materials for primary and second level students. I hope the Deputy will accept my proposal in amendment No. 30 which was drafted under advice from Parliamentary Counsel and is specific to educational needs. It provides that primary and secondary level books and equipment necessary to the education of the debtor or his or her children will be exempt from the assets to be taken into consideration for the purposes of the debt relied notice application. I mentioned my concern on Committee Stage that small computer devices such as iPads which are now widely used by students at primary and second level to assist in their class work and homework assignments might be included inadvertently as an asset of the debtor. Amendment No. 30 puts this matter beyond doubt.
Government amendment No. 88a is a technical drafting amendment to improve the language used in the Bill.
Deputy Pádraig Mac Lochlainn's amendment No. 91 seeks to add further qualification to the fact of the debtor being insolvent. I am advised by Parliamentary Counsel that the additional words are not necessary to qualify the concept of being insolvent. Sections 53 and 88 of the Bill have been drafted such that the eligibility criteria for entering into a debt settlement or personal insolvency arrangement are objective and factual and not based on opinion. The likelihood that a person would be able to become solvent in the years following the implementation of an insolvency arrangement is, by its nature, opinion based, if not based on prophecy. Section 50 refers to the personal insolvency practitioner's statement of opinion, including in regard to the matters set out in section 50(d). Section 53 refers to this in subsection (1)(d). In other words, the eligibility criterion under section 53 is that the personal insolvency practitioner has given an opinion under section 50 on the likelihood of the debtor becoming solvent in the next five years. In the circumstance, I cannot accept the Deputy's amendment.
Government amendment No. 92 proposes to replace subsection 53(1)(d) with an improved text setting out the eligibility criteria. It refines the existing text by reference to the provisions of section 50 in regard to the debtor's financial affairs. The existing text contains provisions already set out in some detail in section 50. Government amendment No. 93, which arises as a consequence of amendment No. 92, proposes the deletion of subsection (2) of section 53 as it is no longer required.
Deputy Niall Collins's amendment No. 94 seeks to add a reference to section 53 to assets necessary for the education of children under 18 years of age. I am advised that the addition of this reference is not consistent with how the debt settlement arrangement process is designed to operate. Section 53 sets out the key eligibility criteria in regard to the insolvency of a debtor to which the debtor and his or her personal insolvency practitioner must have regard in seeking a protective certificate or thereafter negotiating an arrangement offering a certain repayment capacity to creditors. As I explained, it is not likely that creditors would accept assets being put off limits by the device of designating them educational. For this reason, I cannot accept the Deputy's amendment. In so far as he is anxious to ensure that educational materials used by the debtor or his or her children are exempt, our amendment effectively covers that.
Government amendment No. 134 proposes to replace section 88(1)(f) with an improved text setting out the eligibility criteria. Similar to amendment No. 92, it refines the existing text by reference to the provisions of section 50 in regard to the debtor's financial affairs. Government amendment No. 137, which arises as a consequence of amendment No. 134, proposes the deletion of subsection (2) of section 88 as it is no longer required. Government amendment No. 137a is a technical drafting amendment required to ensure consistency in regard to the terminology used in the Bill.
I will withdraw my amendment on the basis that it is covered by the Minister's proposals.
Amendment, by leave, withdrawn.
I move amendment No. 25:
In page 27, between lines 28 and 29, to insert the following:
"(ii) one item of jewellery of ceremonial significance of a value not to exceed such amount as may be determined by the Minister by regulation,".
We had an interesting exchange on this issue on Committee Stage.
At the time, the Minister pointed out that we did not have a value placed on items of jewellery. We are therefore turning it around the other way and are allowing the Minister the opportunity to accept the amendment to place what, in his esteemed judgment, would be a reasonable valuation to allow people to keep items of ceremonial significance. We are basically talking about people's wedding rings.
While in this legislation we are discussing personal finance issues which impact on the economy, we must remember that we are also trying to keep a society together. It is also about treating genuine people who are looking to this legislation as an option of last resort to remain with some respect and dignity. I am not trying to be trashy concerning this amendment, which has been tabled with good intent. That is the spirit in which it is being offered. If the Minister wanted to pick a reasonable valuation we would be happy to go with it. He can do that by way of regulation later.
I recall that this seemed to become the only issue that the media had any remote interest in, following the debate on Second Stage.
That was the Minister's fault.
Everything else disappeared in its entirety and this became the issue. I disagreed with Deputy Collins on Committee Stage for seeking to exempt from the debt relief notice asset test items of jewellery of ceremonial significance. I did so both on the basis that ceremonial significance is very difficult to discern, varying as it might from person to person. In addition, Deputy Collins did not include any limit as to the monetary value. His latest proposal regarding these difficult situations is to require the Minister to determine them by regulation. I note with some interest that he is not proposing any monetary value. I feel that this is a task that neither I nor any Minister would wish to have imposed on them to undertake. I do not think the retention of valuable jewellery is a priority in seeking debt forgiveness under the debt relief notice. It is certainly nowhere near being on a par with the exemption we have agreed in regard to education, which is a very important issue.
My stance on this issue is well known. I do not believe that modest items of jewellery should be required to be sold, unless the debtor wished to do so to repay debt. Many debtors may wish to do so. I am also of the belief that creditors would be unlikely to seek the surrender of low or modestly valued items of whatever significance in an enforcement action prior to any application for the granting of a debt relief notice. I would not expect there is any reality in creditors pressing that issue. However, in seeking a full debt write-off of up to €20,000 a creditor may very likely seek to enforce the surrender of a valuable item of jewellery which could pay some or all of the debt owed - perhaps originally related to the purchase of the very item of jewellery an individual might want to retain as being ceremonially significant. That is the reality of the situation. The debt relief note is not designed to put assets, which are not essential to maintain a basic reasonable living standard, beyond the reach of creditors.
Deputies might be wary of seeking to have anyone, let alone the Minister of the day, set out valuation targets in this area. Perhaps it would be better to remain silent on this issue and assume that creditors would not have any interest in a very modest item - of jewellery, for example - that in practical terms would generate very little money or value of any description should someone seek to force its sale.
While I cannot accept the amendment, I do have some sympathy in this area in the context of items, or at least an item, that is not necessarily ceremonial but of emotional significance to an individual, while being of very modest value. I would ask the Deputies to tell me what is a modest value in circumstances where one is writing off €20,000 of debt. Is a modest value, say, €200, €300 or €400? The moment a Minister designated a value at any particular level, he or she would be accused of being parsimonious and would be asked why he or she had not added another €200 to it.
It is noticeable that Deputy Collins has not put a value on this. It may well be an issue left to the common sense of individuals in these circumstances, and to their creditors. However, if Deputy Collins wants to suggest to me what the value should be, I will listen to him with interest. I will keep the matter under review in the Seanad when we will still be doing some fine tuning to this Bill. There will be a couple of major Parts to be inserted in the Seanad, which will then have to come back to this House. I will be interested to hear what the Deputy might have to say on the value issue.
In fairness, I believe this amendment is an attempt to get some common sense into the way the Bill is to be read. If it is left in the hands of what could be an egregious debt resolution process to discuss an engagement ring or a wedding ring, one does not know what a creditor may wish to pursue in the course of that negotiation. We know that engagement rings do not cost €300 or €400; we are getting into thousands of euro in real terms. Unfortunately, those are the societal demands and expectations, so what value can one put on an engagement ring? One could explicitly say - and the way it is worded is spot on - that it is of ceremonial importance. Nobody wants anyone to lose their engagement ring or wedding ring, which is a treasured possession of a family. I urge the Minister to find some way whereby a creditor is not given licence to go after somebody's engagement ring or wedding ring. It is humiliating to have such a valued possession taken from a family.
I am with the other Deputies on this. In a council estate in County Wicklow, not far from where I live, sub-prime lenders - legal loan sharks - are lending money for communions to people with very low incomes. I have spoken to a few people in this situation and the debts mount very quickly because the lenders charge ridiculous interest rates. I understand the whole moral hazard idea and that we need to disincentivise that sort of behaviour. However, I can well see a situation where some of these people would go after wedding rings and certainly after engagement rings. We can insert a value, since we have put in a value for everything else. We have put in €60, €400 and €6,000. I will therefore take the bait and suggest, off the top of my head, a value of €500 for a wedding ring. The asset on page 26 of the Bill is €400 or less. That covers the vast majority of wedding rings in the country and also covers a lot of engagement rings in this day and age. If a wedding ring has to be counted towards the sum of €400, anyone who has got a wedding ring on their finger will quickly find themselves unable to use this important mechanism. I will rise to the bait and suggest a figure of €500 or €1,000. I could certainly see a situation based on some of the unpleasant lending practices that are going on in County Wicklow, whereby people will definitely go after engagement rings. I would not put it past them to go after wedding rings either.
The Minister is well aware that there is currently a huge trade in precious metals through the cash-for-gold outlets and various pop-up shops that are creeping into towns and villages all over the place. They are accepting precious items for cash, so that will also feed into this. I am not trying to be populist, but it is a question of treating people with respect and dignity. It is not easy to square the circle but perhaps a little more thought from within the Minister's Department could come up with a figure. As Deputy Donnelly said, the Minister has managed to produce figures on all the other items.
I thank Deputy Donnelly for his clear contribution and raise with the other two Deputies that they have made a very obscure contribution.
We are deferring to the Minister's wisdom.
No one wants any individual to be in the circumstances in which he or she needs to use the debt relief notice mechanism in the first instance. Sadly, however, Members know that many people may need to resort to it. I must maintain a responsible balance between debtors and creditors. The media's concept of a creditor is of an evil financial institution that forced people to take money, that the people gave no thought to it but simply took the money and now this evil financial institution wants to ruin them. That cannot be an issue with a debt relief notice, no matter how much anyone tries to make it so, because of what is involved with a debt relief notice. No doubt Members will come again to deal with the financial institutions and the personal insolvency arrangements. I am highly conscious of the need to facilitate people to preserve a sense of personal dignity. I also am conscious that any type of ring or piece of jewellery can have emotional significance. Something that cost €20 can have, because of the circumstances in which it was purchased, emotional significance, as can something that cost €200,000. The question is: What is reasonable when one is dealing with people of limited assets and limited income with debts of €20,000 or less and creditors, who through no fault of theirs, are owed that money? As for the creditors, I keep reverting to the point that all Members have them in their constituencies and that a lot of work is done by volunteers to the benefit of local communities in credit unions. At what point does one tell someone he or she has an asset that must be used to pay back a debt to a credit union that operates for the benefit of the extended community or to what extent should the extended community and the credit union fund someone's wish to retain assets and not pay debt?
I am willing to reflect on Deputy Donnelly's suggestion, whereby one is talking about a single item of jewellery of what I describe as emotional significance, not necessarily ceremonial significance. It may be a modest ring someone has inherited from a deceased grandmother or mother. It may not be ceremonial but it may indeed be emotional. I am willing to give some thought to this at the sort of value level Deputy Donnelly is suggesting. However, I ask other Deputies what value levels they are talking about. I am interested in this from a human perspective, not from a political perspective. Were discretion given to the Minister and were I to make a regulation that specified €500, within approximately half an hour Deputy Niall Collins would have released a statement accusing me of being mean and parsimonious and demanding it should be €1,000. Deputies should indicate what values they are talking about.
If the Minister is happy to accept a limit of €500-----
Is the Deputy?
I am. Is the Minister?
There will be headlines written for tomorrow in which every woman in the country will be aghast that Members have valued their engagement rings at €500.
It is a bit late in the evening for headlines but I wish the Deputy well.
It is safe, as the Fourth Estate have all departed.
I must ask Deputy Collins, how stands the amendment?
I will conclude by stating I will give further thought to this matter for the Seanad and can give the Deputy that assurance. However, I cannot accept the amendment he has tabled. If this is to be done and addressed, it is to be done at a value level for a single item and not on a general descriptive basis with the Minister having some broad discretion to announce a figure between one euro and €500,000.
Briefly, I refer to section 24(2)(c), which states "has assets, calculated in accordance with subsection (6), worth €400 or less". Is the Minister satisfied that if someone has a wedding ring that is worth, for the sake of argument, €500, this will not preclude him or her from the debt relief notice? I ask because section 24(6) refers to "property (real and personal)". If this amendment potentially is to be considered, will there be a necessity to put something in there that would preclude it from being accounted part of the aforementioned €400?
I can assure the Deputy that I will consider the connectivity between the issues. While I am not stating categorically that I will do this, I will give it serious thought, now I finally have a figure to which Members on the other side of the House are agreeable and that may not be unreasonable in the overall context of what I am trying to achieve.
I accept what the Minister is saying and everyone must acknowledge he has come a long way since the Committee Stage debate. Deputy Donnelly's proposal is acceptable to me and as Fianna Fáil's press officer is off-duty at present, the Minister is okay in that regard. However, I ask the Minister to give consideration to this matter because it pertains to people's respect and dignity. I am not trying to be populist or political about it.
Amendment, by leave, withdrawn.
As for amendment No. 26, amendment No. 27 is an alternative and amendments Nos. 28 and 29 are related. Amendments Nos. 26 to 29, inclusive, will be discussed together.
I move amendment No. 26:
In page 27, to delete line 32 and substitute the following:
“(I) is appropriate to the needs of the debtor or the debtor’s family,”.
Again, this pertains to the value of the motor vehicle in the context of valuing people's assets. The amendment proposes that the vehicle should be viewed as appropriate to the needs of the debtor and the debtor's family. Car requirements for a two-member family would differ from the requirements appropriate to a family of five or six people. Moreover, the Road Safety Authority has a view on the type of vehicle one would need to carry a family of five or six, as opposed to a family of two or three. If Members take the route of reasonableness and common sense espoused by the Minister in some of the earlier discussions - as they must because one must adopt a practical commonsensical approach - and if they intend to allow the insolvency service of Ireland an amount of discretion through the process, the Minister should seriously consider this amendment. At present, the limit is arbitrary and one could go to two or three different garages along the Long Mile Road and get a different valuation for a car from each. However, the overriding principle here concerns what is deemed appropriate for a family's needs. It should be a small car for a small family and a larger car with greater seating capacity for a larger family. Moreover, one could have elderly dependants, disabled people and so on. At this point, the Minister is familiar with the argument I am making.
Sinn Féin's argument is along similar lines and obviously, we chose a monetary value of €3,000 in this regard. I am conscious that Deputies Niall Collins and Donnelly both represent considerable rural areas in their constituencies. I can only speak of County Donegal where, in vast swathes of the country, given the absence of an adequate public transport infrastructure, one must have a car to function as a family in real terms if one wishes to get by and to work. The imposition of a valuation of €1,200 on a vehicle is extremely limited and invites creditors to take a car that would be appropriate. I believe the terminology used in Deputy Niall Collins's amendment probably is a better way to phrase this than as a monetary value. A car that is appropriate to a family's needs could be taken from them and they could be obliged to get one that breaks down regularly. As for the limit of €1,200, as someone who has owned a car with such a valuation in County Donegal, I can assure the Minister that I often was stuck at the side of the road making telephone calls looking for someone to give me a tow and that is no way to get by. Consequently, I believe this is about common sense and coming to an arrangement that does not punish people, particularly in rural areas, or make life unbearable as this is not what Members are trying to achieve in this regard.
Amendments Nos. 26 and 27 are quite similar in seeking to raise the value in the context of the qualifying criteria.
Debate adjourned.
The Dáil adjourned at 10 p.m. until 10.30 a.m. on Wednesday, 7 November 2012.