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Dáil Éireann díospóireacht -
Wednesday, 7 Nov 2012

Vol. 781 No. 2

Personal Insolvency Bill: Report Stage (Resumed)

Debate resumed on 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,”.
- (Deputy Niall Collins).

Yesterday evening, I was about to start replying to points made on amendments Nos. 26 and 27, which are similar in seeking to raise the value, in the context of the qualifying criteria for a debt relief notice, of a car allowed to be retained by a debtor for his needs or the needs of dependants. The limit proposed in the Bill is a value of €1,200, or greater if the vehicle has been specially adapted in the context of use by a person suffering a disability. Deputy Pádraig Mac Lochlainn would raise the limit to €3,000 while Deputy Niall Collins appears to have no limit, with the only qualification that it is appropriate to the needs of the family. I am presuming the proposal of Deputy Niall Collins excludes a Maserati or another sports car as being appropriate to needs. He puts no limit on the amount. The amendment of Deputy Niall Collins is a quite meaningless concept. Some debtors may feel if it has been part of their lives for some years to drive a Mercedes and that it is appropriate they continue to do so for their family purposes.

I explained the rationale behind the proposed limit of €1,200 on Committee Stage.

As I explained during the discussion of other issues yesterday evening, it is unlikely that vehicles of a modest value would feature to any realistic degree in all of this or would be required to be sold or surrendered, unless the debtor wished to do so prior to an application for a debt relief notice or in the context of the granting of one. That outcome cannot be guaranteed, however. It is much more likely that a creditor would seize a vehicle of any significant value in payment of a debt. A car of significant value might encourage a creditor to get a court order against an individual in respect of a debt and the sheriff could be sent to seize a vehicle. The process we have for the debt relief notice is designed to provide relief to debtors and not to assist them in the continued benefit of items that cannot be afforded or might be used to repay debt. In drafting the Bill we looked at other jurisdictions, but there is much that is unique to our legislation. In Northern Ireland and Great Britain, the maximum motor vehicle value is £1,000. What we are proposing is similar.

The basic philosophy behind the legislation is that someone who is in serious debt will do what he or she can to realise assets and discharge his or her debt. That is what happens in such circumstances. Debts of up to €20,000 would largely be to local shopkeepers or credit unions, who have a particular communal benefit. Such debtors would have borrowed money or failed to pay for services or product and that failure might put in financial difficulties the people who paid for the services or product. Debts should not be written off where there is an ability to discharge them. That is a reasonable proposition. A motor vehicle of a very modest nature and of limited value may be retained, but not something of unspecified value that an individual may have been used to driving in different financial circumstances or when they had substantially overreached themselves, that was the vehicle they wanted and no assessment was made as to whether it was affordable. This is about achieving the balance. I am opposed to amendments Nos. 26 and 27.

We are also discussing amendment No. 28, which is a technical Government amendment required to improve the construction of the section as a consequence of the insertion of the proposed new subsection (iii). Government amendment No. 29 is also a technical amendment required to correct an error in the text.

I agree that people should have to trade down their vehicles. It is also reasonable to provide for a car that is appropriate to people's needs and the needs of their families, which is more important. Outside the greater Dublin area, Ireland is predominantly rural and a car is a necessity. It is not a luxury item.

Will the Minister consider this matter before the Bill goes to the Seanad for Report Stage, as was agreed with regard to the jewellery amendment which we discussed last night? We should be practical about this matter.

I am anxious to be practical, but I am conscious that we are both an urban and a rural society and that many more people lived in rural Ireland before there were as many vehicles on the road as there are now. Where someone is entering a system in which €20,000 of debt may be, effectively, written off to afford them an opportunity of a new start, they must take reasonable steps to realise assets to discharge a portion of the debt.

We had a constructive engagement on the issue we discussed last evening. I have undertaken to address that issue in the Seanad and to come back then to this House. I am not disposed, however, to revisit this figure. It is important that Deputies Niall Collins and Mac Lochlainn do what they are doing and that we tease out the Bill. I am conscious, however, that all their amendments seem to be about increasing the value of items people in serious debt retain while having no regard at all to the position of creditors. As Minister, I must ensure there is a balance.

I know there is no monopoly of wisdom in these matters. In the neighbouring jurisdiction of Northern Ireland, the vehicle value was fixed, relatively recently, at £1,000. I am not persuaded that we should do something different here. We are not likely to see a creditor making an issue of whether a vehicle is worth €1,200 or €1,500. If, however, one expects to have €20,000 of debt written off, one must make a real effort, based on the assets one has, to discharge debt where one can genuinely do so. We can argue about dividing lines on this issue, but I will stick to the provisions in the Bill. I envisage, however, that after the first year we will get a sense of how the legislation is working in practice and what difficulties are arising. If changes are required, I will not be slow to introduce them to ensure that we achieve the objectives of the legislation.

One can get a much better car for £1,000 in the North, even allowing for the VRT differential, than in the South. That is almost identical to the amount allowed in the Bill.

The road network in the North is superior to that in many areas of rural Ireland, where one needs a reasonable car. I can only speak with knowledge of my own constituency of Donegal North East. In the rural areas of my constituency, one could not sustain a family, have a reasonable opportunity of attaining employment or deal with the necessities of family life without having a car. There is no public transport infrastructure.

I accept that we are trying to strike a balance. I said so last night. We have all been lobbied by credit unions and we know stories of small businesses that are unable to pay their employees because they have not been paid by their customers. I accept that a balance must be found. However, I urge the Minister to reconsider the figure of €1,200. It will not allow someone to have a car that would sustain a family in vast swathes of rural Ireland.

There may be a mid-way point. Perhaps €2,000 would be a reasonable figure. I ask the Minister to reflect on this issue. Some basic consultation with the Society of the Irish Motor Industry, SIMI, might help to strike a reasonable balance between the rights of a creditor and the needs of a family who have gone through an exhaustive process and demonstrated that they do not have the capacity to pay their debts. We want people to meet their responsibilities but we do not want to humiliate them.

A Cheann Comhairle, will I talk to the Minister or is he reading his papers?

You speak to the Chair, Deputy.

We were here all last evening. The Deputy did not join us. He should not think I am not listening to him. I can listen to him while reading a note.

We will not have a dispute about it. The procedure is to address remarks to the Chair.

The Minister can be assured I was tuned in to him. When it comes to the proposed figure of €1,200, there is an important aspect the Minister is not taking into account, and I mean this in a helpful way. In many rural areas a motor car will not do for the family - that family might need a four wheel drive jeep. In those cases, to get any type of reasonable, respectable jeep that would be roadworthy and safe to use and that would comply with the various tests for such a vehicle, there would be no hope of getting anything for €1,200. The price would be far greater than that. Every case is not the same. I urge the Minister, as other Deputies have, to review that figure. It might be fine for urban areas, where a person could buy a car for €600 and it would do perfectly well for a family. In the rural areas I know well, however, it would not do.

We also want people to be able to work their way out of their difficulties. By the nature of what they might have been involved in or hope to stay at to earn money, they might need a jeep, van or similar vehicle that could not be bought for €1,200. I respectfully ask the Minister to take that on board and remember many of those who find themselves in financial difficulties might have been contractors, farmers or involved in other businesses that would need such a jeep. If they are to work their way out of their difficulties, they might need to hold on to the vehicle they have. If it was worth more than €1,200, I would hate to see the wheels being taken out from under them. This is an important issue and a lot people would fall into this category.

I will leave it to Deputy Healy-Rae to go to his local credit union and explain to its board why a €5,000 debt should not be repaid by an individual who is driving around the constituency in a jeep. He might want to explain the financial implications of that to the other members of the credit union who are anxious to ensure its continued solvency and the availability of funding.

That is a bit of a smart answer.

Question, "That the words proposed to be deleted stand", put and declared carried."
Amendment declared lost.
Amendment No. 27 not moved.

I move amendment No. 28:

In page 27, line 33, to delete “, or a dependant of the debtor,” and substitute “, or his or her dependant,”.

Amendment agreed to.

I move amendment No. 29:

In page 27, lines 35 and 36, to delete “dependent” and substitute “dependant”.

Amendment agreed to.

I move amendment No. 30:

In page 27, between lines 36 and 37, to insert the following:

“(iii) where the debtor or his or her dependant is attending a course of primary or second-level education, books, materials and other items of equipment that are reasonably necessary to enable the debtor or that dependant, as the case may be, to participate in and complete that course,”.

Amendment agreed to.

I move amendment No. 31:

In page 27, after line 40, to insert the following:

“(7) The Minister for Justice and Equality shall, no later than 30 days after the enactment of this Bill publish detailed guidelines concerning the household equipment and appliances that are reasonably necessary to maintain a reasonable standard of living for the debtor and his or her dependants, for the purposes of section 24(6)(c).”.

This is similar to the discussion yesterday evening. The amendment seeks a specific description of the household equipment and appliances that are reasonable. It would give direction to those drafting this.

My response to amendment No. 31 is similar to the response to amendment No. 20 that we discussed yesterday evening. The major approved intermediary for the processing of applications for a debt relief notice, MABS, has the necessary expertise in devising in respect of each individual application and circumstance those household items that are essential for that person's domestic requirements. The insolvency service will work closely with MABS and other expert organisations to seek the necessary realistic and workable guidelines. In this context, it would not be wise to commit to a specific timeframe for the reasons I gave yesterday evening and, for that reason, I am opposed to the amendment.

As I asked last night, is it the objective of the Minister to have guidelines provided when this process is instigated?

It will be for the insolvency agency in the context of the consultations it will have with MABS to advise on where it is appropriate to have detailed guidelines and where matters should be left in a general context to be worked out based on an individual's circumstances. Even within guidelines, there will be individual variations depending on background circumstances.

Amendment put and declared lost.

Amendments Nos. 32 to 36, inclusive, are related and may be taken together.

I move amendment No. 32:

In page 29, to delete lines 1 and 2 and substitute the following:

“(a) he or she has ever been a specified debtor,”.

Amendment No. 32 provides greater clarity on the eligibility for a debt relief notice and provides that a debtor is ineligible for a DRN where he or she has ever been a specified debtor. The text of this provision as it currently stands is not sufficiently clear in this regard.

Amendment No. 33 is a technical drafting amendment to improve the text of the Bill. Amendment No. 34 is also technical in nature to improve the quality of the text. Amendment No. 35 is a technical amendment that makes it clear it is the debtor who is being referred to here in case there was any ambiguity. Amendment No. 36 simply corrects a punctuation error in the text.

Amendment agreed to.

I move amendment No. 33:

In page 29, line 4, to delete “in the period” and substitute “within the period”.

Amendment agreed to.

I move amendment No. 34:

In page 29, line 9, to delete “successfully” and substitute “has successfully”.

Amendment agreed to.

I move amendment No. 35:

In page 29, line 17, to delete “person” and substitute “debtor”.

Amendment agreed to.

I move amendment No. 36:

In page 29, line 24, to delete “subject” and substitute “subject,”.

Amendment agreed to.

I move amendment No. 37:

In page 30, line 25, after “particular,” to insert the following:

“negotiation with a creditor or creditors with a view to restructuring the terms of a debt owed (including write-downs, reductions of interest rates, lengthening of maturities) to that creditor or creditors, whether as part of any arrears process or otherwise,”.

The objective of this amendment is for the debtor to be advised of options that might not be in the Bill related to write-downs, reductions of interest rates and lengthening of maturities. It would ensure the debtor has full information before engaging in the debt relief process.

The amendment misses the point of the debt relief notice process. The approved intermediary is required to advise the debtor as to the consequences of the application, the criteria and whether a different debt resolution process might not be more appropriate to his or her situation. The debtors will be in a position to consider all of these issues. Becoming a party to another debt process will likely involve the elements set out by the Deputy but there is no requirement to list them in this section, which deals with the provision of information and advice as to the debtor's options, not his or her potential negotiation strategy, to be arranged by a personal insolvency practitioner in another process. For that reason I am opposed to the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 38:

In page 30, line 29, after “(if any)” to insert “that is prescribed”.

This is again a technical amendment, the purpose of which is to highlight that the application fees, if any, for debt relief notices will be prescribed in regulations.

Amendment agreed to.

I move amendment No. 39:

In page 31, line 5, to delete “under this Chapter”.

This is yet another technical amendment. I am advised by the Parliamentary Counsel that the words "under this Chapter" are superfluous and should be deleted. I suppose one could argue that if they are superfluous we could have left them there, but Parliamentary Counsel's advices need to be followed, so I propose the amendment.

Amendment agreed to.

I move amendment No. 40:

In page 32, lines 17 and 18, to delete “paragraphs (a) to (c)” and substitute “paragraphs (a) and (b)”.

This is again a technical amendment that corrects a cross-referencing error in the original text.

Amendment agreed to.

Amendments Nos. 41, 95 and 139 are related and may be discussed together.

I move amendment No. 41:

In page 32, to delete lines 29 to 31 and substitute the following:

“(d) 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, and”.

These are drafting amendments recommended by the Parliamentary Counsel to improve on the presentation of these provisions. I do not believe they have any major substantive consequences, but it is important that we get the drafting right.

Amendment agreed to.

Amendments Nos. 42, 43, 96, 97, 140 and 141 are related and may be discussed together.

I move amendment No. 42:

In page 32, to delete lines 35 to 40 and substitute the following:

“(e) the debtor’s written consent to—

(i) the disclosure to the Insolvency Service,

(ii) the processing by the Insolvency Service, and

(iii) the disclosure by the Insolvency Service to creditors of the debtor concerned, of personal data of that debtor, to the extent necessary in respect of the Debt Relief Notice process;”.

The purpose of these amendments is to strengthen the Bill's provisions concerning the disclosure of the debtor's information for the purpose of his or her application for a debt relief notice, debt settlement arrangement or personal insolvency arrangement. It is important for data protection purposes that the debtor gives written consent to the disclosure of his or her personal data to the insolvency service and to his or her creditors, and also to the making of further inquiries by the insolvency service in considering the debtor's application. The proposed amendments seek to improve on the current text to make clearer the consent provisions required.

Amendment No. 42 proposes the substitution of the existing text in section 26(2)(e) with new text that sets out more clearly the disclosure requirements. It provides that the debtor is required to give written consent to the disclosure of his or her personal data to the insolvency service, the processing of those data by the service and the disclosure by the service of those personal data to his or her creditors by the insolvency service to the extent necessary for the processing of his or her application for a debt relief notice.

Amendment No. 96 proposes the substitution of the existing text in section 54(2)(f) with new text which sets out more clearly the disclosure requirements regarding a debt settlement arrangement. Amendment No. 140 proposes the substitution of the existing text in section 98(2)(f) with new text that sets out more clearly the disclosure requirements regarding a personal insolvency arrangement. Amendment No. 43 replaces the existing text of section 26(2)(f) with new text that makes clear that the debtor's written consent is also required for the making of any inquiry by the insolvency service under section 27 in considering the debtor's debt relief notice application. For consistency, amendment No. 97 makes a similar amendment to section 54(2)(g) regarding debt settlement arrangements. Amendment No. 141 makes a similar reference to section 89(2)(g) regarding personal insolvency arrangements.

Amendment agreed to.

I move amendment No. 43:

In page 32, to delete lines 41 to 43 and substitute the following:

“(f) the debtor’s written consent to the making of any enquiry under section 27 relating to the debtor by the Insolvency Service;”.

Amendment agreed to.

I move amendment No. 44:

In page 33, lines 14 and 15, to delete all words from and including “is” in line 14 down to and including “application.” in line 15 and substitute the following:

“is reviewed under section 28(2) that would affect the debtor’s eligibility for the issue of a Debt Relief Notice”.

This is a drafting amendment that seeks to provide greater clarity as to the intention of the section and to ensure that it works as originally envisaged.

Amendment agreed to.

I move amendment No. 45:

In page 34, line 23, to delete “be under a duty to”.

I am afraid we are visiting the superfluous again. I am advised by the Parliamentary Counsel that the words "be under a duty to" are superfluous and should be deleted.

Amendment agreed to.

Amendments Nos. 46 and 47 are related and may be discussed together.

I move amendment No. 46:

In page 35, line 33, to delete “debts of” and substitute “debts in respect of”.

These are again technical amendments recommended by Parliamentary Counsel to improve the drafting of the section.

Amendment agreed to.

I move amendment No. 47:

In page 36, line 1, to delete “the fact that a” and substitute “the fact that the”.

Amendment agreed to.

Amendments Nos. 48 to 50, inclusive, are related and may be discussed together.

I move amendment No. 48:

In page 36, to delete lines 10 to 18 and substitute the following:

“(2) The appropriate court, on application to it by the Insolvency Service, may extend the supervision period where it is satisfied that such extension is necessary in order to allow the Insolvency Service to—

(a) carry out or complete an investigation under section 37, or

(b) take any other action it considers necessary (whether as a result of such an investigation or otherwise) in relation to the Notice concerned.”.

The purpose of amendments Nos. 48 and 49 is to improve on the existing construction used in sections 31(2) and 31(3) to provide greater clarity. Amendment No. 50 provides for necessary and more specific cross-referencing in section 35(5) than is contained in the existing text.

Amendment agreed to.

I move amendment No. 49:

In page 36, to delete lines 19 to 22 and substitute the following:

“(3) The appropriate court may extend the supervision period for the purposes of determining an application under section 39, 40 or 41.”.

Amendment agreed to.

I move amendment No. 50:

In page 36, line 30, to delete “subsection (2) or (3).” and substitute the following:

“under subsection (2) or (3) or under section 38(3)(c), 39(3)(c), 40(5)(b) or 41(4)(b).”.

Amendment agreed to.

I move amendment No. 51:

In page 36, between lines 38 and 39, to insert the following:

“(a) contact the debtor seeking the repayment of the debt,”.

Am I right in saying that the intention of my amendment is covered by 32(1)(f)?

On that basis, I will withdraw it.

Amendment, by leave, withdrawn.

Amendments Nos. 52 to 56, inclusive, and 66 are related and may be discussed together.

I move amendment No. 52:

In page 36, lines 39 and 40, to delete “specified debt” and substitute “specified qualifying debt”.

These are technical drafting amendments recommended by the Parliamentary Counsel. They make clear that it is only the "specified qualifying debt" that is being referred to.

Amendment agreed to.

I move amendment No. 53:

In page 37, lines 3 and 4, to delete “specified debt” and substitute “specified qualifying debt”.

Amendment agreed to.

I move amendment No. 54:

In page 37, line 6, to delete “specified debt” and substitute “specified qualifying debt”.

Amendment agreed to.

I move amendment No. 55:

In page 37, lines 10 and 11, to delete “specified debt” and substitute “specified qualifying debt”.

Amendment agreed to.

I move amendment No. 56:

In page 37, line 19, to delete “specified debt” and substitute “specified qualifying debt”.

Amendment agreed to.

I move amendment No. 57:

In page 37, to delete lines 21 to 24 and substitute the following:

“(a) a bankruptcy petition relating to the debtor, or

(b) a summons under section 8 of the Bankruptcy Act 1988.”.

This is a technical drafting amendment that seeks to improve the text of the Bill. I am advised that section 32(2)(c) is superfluous as the matter is already covered by the wording of section 32(2)(a).

Amendment agreed to.

Amendments Nos. 58, 59, 98, 99, 142 and 143 are related and may be discussed together.

I move amendment No. 58:

In page 37, line 27, after "process" to insert "in respect of a specified qualifying debt".

The aim of amendment No. 58 is to ensure that section 32(3) will not prevent the initiation or continuation of tort claims or other legal proceedings that have no connection to a debt and may involve persons who have no connection to a debt. To better reflect the policy intention of this provision, the proposed amendment limits the effect of the exclusion to the specified debts in the debt relief notice. For consistency, similar amendments are proposed to the corresponding provisions regarding debt settlement arrangements in amendment No. 98 and regarding personal insolvency arrangements in amendment No. 142.

Amendment No. 59 deals with an issue related to amendment No. 58. The provisions of section 32(3) as drafted could be given a wide interpretation so as to prevent criminal proceedings or applications to court relating to criminal investigations being made against a person subject to a debt relief notice. It would be costly to the State if applications have to be made to the Circuit Court or High Court for leave, for example, to initiate a District Court prosecution. The amendment makes it clear that the existence of a protective certificate will not prohibit criminal proceedings against a debtor. For consistency, similar amendments are proposed to the corresponding provisions regarding debt settlement arrangements in amendment No. 99 and regarding personal insolvency arrangements in amendment No. 143.

I am sure Deputies will appreciate it was never intended that there would be a bar on the initiation of criminal proceedings, where appropriate, because of an application for any of the debt relief mechanisms available under the legislation.

Amendment agreed to.

I move amendment No. 59:

In page 37, line 31, to delete "deems appropriate." and substitute the following:

"deems appropriate, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.".

Amendment agreed to.

Amendments Nos. 60 and 85 are related and may be discussed together by agreement.

I move amendment No. 60:

In page 38, to delete lines 1 to 10.

Amendment No. 60 proposes the deletion of section 32(7) and 32(8). These subsections apply where the debt relief notice is terminated and hence should be in section 42.

Amendment No. 85 makes the necessary amendments to section 42 to ensure the matter is properly addressed.

Amendment agreed to.

Amendments Nos. 61, 115 and 181 are related and may be discussed together by agreement.

I move amendment No. 61:

In page 38, lines 22 and 23, to delete "the level of" and substitute "the extent of".

These are drafting amendments which are required to ensure consistency in relation to the construction used in the Bill.

Amendment agreed to.

Amendments Nos. 62, 63 and 72 are related and may be discussed together by agreement.

I move amendment No. 62:

In page 38, line 27, to delete "by him or her or on his or her behalf" and substitute "by him or her, or on his or her behalf,".

These are technical amendments. Amendments Nos. 62 and 63 are designed to improve the presentation of the text. Amendment No. 72 is to improve the punctuation in section 38(4). It is important we get our punctuation right.

Amendment agreed to.

I move amendment No. 63:

In page 38, lines 34 and 35, to delete "by him or her or on his or her behalf" and substitute "by him or her, or on his or her behalf,".

Amendment agreed to.

I move amendment No. 64:

In page 38, line 38, to delete "€250" and substitute "€400".

I hope Deputies will welcome this amendment. Deputies may recall that during the Committee Stage debate on this section I undertook to re-examine the earned income threshold under subsection (3). As currently drafted, section 33(3) provides that where a specified debtor's income increases by €250 or more a month after the deduction of income tax, social insurance contributions and other levies and charges, the debtor is required to surrender 50% of that increased income to the insolvency service for the benefit of creditors. Having considered the matter further since Committee Stage, I now propose to raise the €250 per month limit to €400 per month. The proposed increase should act as an incentive for debtors who are the subject of debt relief notice to continue in employment or to seek to improve their employment situation during the supervision period.

I welcome the amendment.

Amendment agreed to.

I move amendment No. 65:

In page 39, lines 1 and 2, to delete all words from and including "during" in line 1 down to and including "effect" in line 2 and substitute "during the supervision period concerned".

This is a drafting amendment to improve presentation of the text.

Amendment agreed to.

I move amendment No. 66:

In page 39, line 6, to delete "specified debts" and substitute "specified qualifying debts".

Amendment agreed to.

I move amendment No. 67:

In page 39, line 19, to delete "section 34(2)" and substitute "section 34".

This amendment corrects the cross reference in section 35 to section 34 and makes clear that all of section 34 and not just subsection (2) is being referred to.

Amendment agreed to.

I move amendment No. 68:

In page 39, line 39, to delete "the Notice" and substitute "that Notice".

Amendment No. 68 is a drafting amendment which is designed to correct a grammatical error.

Amendment agreed to.

Amendments Nos. 69, 70, 76 and 80 are related and will be discussed together by agreement.

I move amendment No. 69:

In page 40, line 11, to delete "as it thinks fit," and substitute "as it deems appropriate,".

These are drafting amendments which are required to ensure consistency in relation to the construction used in the Bill.

Amendment agreed to.

I move amendment No. 70:

In page 40, line 16, to delete "as the court thinks fit." and substitute "as it deems appropriate.".

Amendment agreed to.

I move amendment No. 71:

In page 40, line 18, to delete "section 41(4)(c)" and substitute "section 41(4)(d)".

This amendment corrects a cross referencing error in the text.

Amendment agreed to.

I move amendment No. 72:

In page 40, line 22, to delete "by the specified debtor or on his or her behalf" and substitute "by the specified debtor, or on his or her behalf,".

Amendment agreed to.

Amendments Nos. 73 and 75 are related and may be discussed together by agreeemnt.

I move amendment No. 73:

In page 40, lines 27 and 28, to delete "in connection with a Debt Relief Notice." and substitute the following:

"in connection with the Debt Relief Notice concerned.".

Amendment No. 73 is a technical drafting amendment, the intent of which is to improve the construction used in section 39(1). Amendment No. 75 is also a technical drafting amendment recommended by Parliamentary Counsel to improve the text of the section.

Amendment agreed to.

I move amendment No. 74:

In page 40, to delete lines 40 and 41 and substitute the following:

"(b) make an order for the compliance by the specified debtor concerned with an obligation under section 33,".

This is a technical drafting amendment recommended by parliamentary counsel to improve the text. We believe it provides greater clarity as to the powers of the court.

Amendment agreed to.

I move amendment No. 75:

In page 40, line 44, to delete "Notice," and substitute "Notice concerned,".

Amendment agreed to.

I move amendment No. 76:

In page 41, line 1, to delete "as the court thinks fit." and substitute "as it deems appropriate.".

Amendment agreed to.

Amendments Nos. 77, 78, 81 and 82 are related and may be discussed together.

I move amendment No. 77:

In page 41, line 12, to delete "are limited to the following matters:" and substitute "are the following:".

These amendments are to provide greater clarity in relation to the relevant provisions in the Bill.

Amendment agreed to.

I move amendment No. 78:

In page 41, to delete lines 18 to 21 and substitute the following:

"(i) there is a material inaccuracy or omission in the Prescribed Financial Statement concerned, or other information provided, or documents submitted, by the specified debtor, or on his or her behalf, under section 26;".

Amendment agreed to.

Amendments Nos. 79 and 83 are related and may be discussed together by agreement.

I move amendment No. 79:

In page 41, line 31, to delete "not followed." and substitute "not complied with.".

These are technical amendments required to improve the drafting of the Bill.

Amendment agreed to.

I move amendment No. 80:

In page 41, line 42, to delete "as the court thinks fit." and substitute "as it deems appropriate.".

Amendment agreed to.

I move amendment No. 81:

In page 42, line 10, to delete "are limited to the following matters—" and substitute "are the following—".

Amendment agreed to.

I move amendment No. 82:

In page 42, to delete lines 14 to 17 and substitute the following:

"(b) there is a material inaccuracy or omission in the Prescribed Financial Statement concerned, or other information provided, or documents submitted, by the specified debtor, or on his or her behalf, under section 26,".

Amendment agreed to.

I move amendment No. 83:

In page 42, to delete line 26 and substitute "not complied with.".

Amendment agreed to.

I move amendment No. 84:

In page 43, line 3, to delete "or 34" and substitute "or under section 34".

This is a technical drafting amendment which seeks to improve on the cross references to sections 33 and 34.

Amendment agreed to.

I move amendment No. 85:

In page 43, between lines 3 and 4, to insert the following:

"(3) Where subsection (1) applies—

(a) the period during which the Debt Relief Notice concerned was in effect shall be disregarded in reckoning any period of time for the purpose of any applicable limitation period (including any limitation period under the Statute of Limitations 1957) in relation to any proceedings or process in respect of a specified qualifying debt to which section 32 applied, and

(b) the period for which any judgment against the specified debtor in relation to a specified qualifying debt has effect (whether under statute or rule of court) shall, subject to the provisions of this Act, be extended by the period that the Debt Relief Notice was in effect.".

Amendment agreed to.

I move amendment No. 86:

In page 43, line 12, to delete "delay—" and substitute "delay and, in any event, within 3 months—".

The purpose of this amendment is to make clear that the information is to be removed from the register of debt relief notices within three months of the discharge of the debtor from his or her debt.

I take this opportunity to inform Members that we intend to bring forward corresponding amendments in relation to debt settlement arrangements and personal insolvency arrangements in the Seanad. It is important that people know when they will come off the register. It is also important there is consistency in the Bill. These particular matters will be addressed in the Seanad, following which the Bill will return to this House for a brief session.

Amendment agreed to.

Amendments Nos. 87, 154 and 194 are related and may be discussed together by agreement.

I move amendment No. 87:

In page 43, line 43, after "intermediaries" to insert the following:

"and the withdrawal of authorisation of such persons".

The objective of this amendment is to provide added protection by the addition of the words "and the withdrawal of authorisation of such persons."

I thank Deputy Mac Lochlainn for raising this point. There is substantial merit in this proposal and it would appear sensible to add this provision in regard to approved intermediaries. I am advised by the Parliamentary Counsel that it would be prudent to await the final determination of the regulatory approach to personal insolvency practitioners which may lead to further adjustment of this particular section. I intend to address this matter when the Bill is going through the Seanad and I ask the Deputy whether this assurance is sufficient for him to withdraw the amendment.

Amendments Nos. 154 and 194 relate to the regulation standards, conditions and conduct of personal insolvency practitioners in the operation of the new debt settlement arrangement and the personal insolvency arrangement. I have received the approval of the Government that the insolvency service will be responsible for the direct regulation of the personal insolvency practitioners. I wish to make it clear in response to the many representations I have received in this regard that we will not impose any particular restrictions on the type of professions of persons who will be licensed to perform this function. Normally, looking at the experience in other countries, such insolvency practitioners tend to be accountants or lawyers. They can also be other professionals from the broad financial services sectors. Many of these will be regulated as appropriate by the Central Bank for the provision of other financial services. This is the approach I intend to take. Suitable persons meeting the normal fit and proper criteria and having indemnity insurance will be able to apply for registration on an individual and not on a corporate basis.

I will bring forward a new Part when the Bill goes through the Seanad to replace the current Part 5. The new Part will, by its nature, contain an extensive number of sections. I expect, subject to our consultations with the Parliamentary Counsel, that many of these regulatory provisions exist in our legislation and can be utilised and adapted appropriately to persons undertaking the work of personal insolvency practitioners. Deputies may wish to withdraw their amendments on the assurance they will be taken into account in preparing the final text.

I very much appreciate the proposals made in the amendments because they are assisting in the process in which we are engaged. I had hoped to have for Report Stage the amendments required for the personal insolvency practitioners, but a substantial amount of work had to be undertaken with regard to their formulation and certain policy decisions had to be made which required consultation with the Central Bank. We were very anxious to ensure we made progress in order that the legislation is enacted before the end of the year, and we are probably ten days or so away from the Office of the Attorney General finalising the required amendments. We will bring forward to the Seanad the amendments required, and after the Bill has completed its passage through the Seanad, it will revert to this Chamber, affording Members an opportunity to consider the provisions that are be made.

Amendment, by leave, withdrawn.

I move amendment No. 88:

In page 48, line 8, to delete "prepare" and substitute "complete".

This is a technical drafting amendment to improve the language of the Bill. I assume the Deputies are happy that we make it.

Amendment agreed to.

I move amendment No. 88a:

In page 48, lines 17 and 18, to delete all words from and including "and" in line 17, down to and including "be," in line 18.

Amendment agreed to.

I move amendment No. 89:

In page 48, line 33, to delete "6 years" and substitute "5 years".

This amendment corrects an error in the text. The reference to a six year "look forward" period in relation to a personal insolvency arrangement is incorrect. It should be a reference to five years rather than six years.

Amendment agreed to.

I move amendment No. 90:

In page 49, line 7, after "domiciled" to insert "and ordinarily resident".

The intent of the amendment is to broaden the definition. It is self-evident.

It is not clear from the Deputy's amendment whether it is "and ordinarily resident" or "or ordinarily resident" which is intended to be added to the text in section 53. In either case the amendment is not desirable. The current text of the provision deals with ordinary residents in the next paragraph. I am advised one cannot state that "domicile" encompasses "ordinarily resident" as it does not necessarily do so. The two concepts are different and separate. Being domiciled in the State means having a fixed and permanent home here with, crucially, an intention of remaining here or returning if absent. To change one's domicile would mean moving to another jurisdiction and intending to remain there permanently or at least indefinitely. A person being ordinarily resident in the State means he or she resides here, which is largely a factual determination based on previous residence patterns. It is possible to be domiciled in the State without being ordinarily resident here and vice versa.

Sections 53(1)(a)(i) and 53(1)(a)(ii) provide for alternatives. A debtor can either be domiciled in the State or ordinarily resident in the State or have a place of business in the State. In this context I refer the Deputy to section 53(1)(a)(ii). To add "ordinarily resident" to section 53(1)(a)(i) would make the provision and possible alternatives unclear and introduce uncertainty and complications unnecessarily. In the circumstances, I ask the Deputy to consider withdrawing the amendment. Either way, I cannot accept it.

For clarification it is "and ordinarily resident". It is to strengthen the provision. I do not know whether this changes the Minister's perspective.

The problem is one would need to be both domiciled and ordinarily resident whereas by being ordinarily resident, one can invoke the measures. I can be ordinarily resident in Ireland and have a domicile in France. I could have come here to live for a few years and be ordinarily resident here, but it is my ultimate intention to return to France which is my domicile of origin. If the words proposed were included, it would add complications which I believe are unnecessary. In the circumstances, I cannot accept the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 91:

In page 49, line 12, after "insolvent" to insert the following:

", or clearly unable to pay his or her debts as they fall due and it is unlikely that he or she will do so for the duration of the payment plan, as certified by a Personal Insolvency Practitioner".

Amendment put and declared lost.

I move amendment No. 92:

In page 49, to delete lines 18 to 24 and substitute the following:

"(d) that the personal insolvency practitioner has completed a statement under section 50 in respect of the debtor;".

Amendment agreed to.

I move amendment No. 93:

In page 50, to delete lines 8 to 15.

Amendment agreed to.
Amendment No. 94 not moved.

I move amendment No. 95:

In page 50, to delete lines 41 to 43 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, and".

Amendment agreed to.

I move amendment No. 96:

In page 51, to delete lines 1 to 6 and substitute the following:

"(f) the debtor's written consent to—

(i) the disclosure to the Insolvency Service,

(ii) the processing by the Insolvency Service, and

(iii) the disclosure by the Insolvency Service to creditors of the debtor concerned, of personal data of that debtor, to the extent necessary in respect of the Debt Settlement Arrangement procedure provided for in this Chapter;".

Amendment agreed to.

I move amendment No. 97:

In page 51, to delete lines 7 to 9 and substitute the following:

"(g) the debtor's written consent to the making of any enquiry under section 55 relating to the debtor by the Insolvency Service.".

Amendment agreed to.

I move amendment No. 98:

In page 54, line 36, after "process" to insert "in respect of a specified debt".

Amendment agreed to.

I move amendment No. 99:

In page 54, line 40, after "Arrangement" to insert the following:

", but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor".

Amendment agreed to.

I move amendment No. 100:

In page 55, to delete lines 18 to 22 and substitute the following:

"58.—(1) Where a creditor or debtor is aggrieved by the issue of a protective certificate that creditor or debtor may, within 14 days of the giving of notice of the issue of the protective certificate, apply to the appropriate court for an order directing that the protective certificate shall not apply to that creditor or debtor. On such application, the Court shall make such order as seems just and reasonable taking into account all the circumstances of the debt.".

I seek to insert amended wording that will effectively allow debtors to have recourse to the court if they feel the protective certificate, as issued, is inadequate. It is to give the debtor a greater say.

I am a little confused by this proposal. Deputy Collins raised a similar point on Committee Stage in regard to adding a reference to the debtor being able to object to the court in regard to the issuance of a protective certificate. The only reason a protective certificate would be issued is to protect the debtor. Therefore, it is difficult to understand how the debtor would object to being given the protection he or she requires. My answer to this proposal remains as it was on Committee Stage. There is no need to extend this appeal facility to the debtor as the debtor would not be aggrieved by the issuance of a protective certificate sought on his or her behalf by an insolvency practitioner. The provision of such a certificate is essentially for the benefit of the debtor, and it is not to his or her detriment. If the certificate were not issued, it would leave the debtor vulnerable to a court application or court proceedings in respect of an outstanding debt he or she was trying to have dealt with through debt settlement procedures.

I do not understand how this issue arises. I appreciate there may be a misunderstanding over it. We touched on it on Committee Stage. What is proposed in the amendment would make no sense and would erect a barrier to effective discussions to bring about a settlement of debt issues. Therefore, it would practically defeat the purpose of the protective certificate mechanism and substantially undermine any role that might be undertaken by an intermediary to bring about debt resolution.

The Deputy seeks to make a further addition in regard to how the court should make orders, taking into account all the circumstances of the debt. First, it is objectionable to suggest the court would not operate on a just and reasonable basis. Second, the Deputy's proposed addition might risk a court rejecting the protective certificate sought for the protection of the debtor. We must remember the protective certificate is only a temporary remedy to create an environment that might facilitate debt resolution. I do not believe the Deputy really desires to achieve an outcome that might encourage courts to reject protective certificates. I do not want to score some cheap political point by suggesting that is his intention as I believe there is a misunderstanding over this matter.

Could the Minister clarify one point?

If the intermediary draws up the arrangement with the debtor, can the insolvency service alter that arrangement prior to presenting it without recourse to the debtor?

No. The insolvency service cannot do so.

That is satisfactory.

The process envisages that on the issuing of a protective certificate, engagement may occur to resolve matters using the intermediary between debtor and creditor. Ultimately, if things work out based on the provisions of the legislation, an agreement will be reached as to the debt resolution mechanism and the arrangements thereunder. The matter will then be passed to the insolvency service, which will ensure the documentation furnished is in order and complies with the parameters of the legislation and the requirements have been met fully. If there is any doubt as to whether the appropriate agreement is reached, the insolvency service can raise that issue. In tabling this amendment, the Deputy may have misunderstood the process.

Amendment, by leave, withdrawn.

Amendments Nos. 101 and 144 are related and may be discussed together.

I move amendment No. 101:

In page 55, line 29, to delete "the order" and substitute "an order".

The amendments are technical drafting amendments to improve the clarity of the text of the Bill.

Amendment agreed to.

Amendments Nos. 102 and 148 are related and may be discussed together.

I move amendment No. 102:

In page 57, between lines 6 and 7, to insert the following:

"(b) in the first three years post enactment of this Act, the maximum duration of a Debt Settlement Arrangement shall be limited to 36 months, after which, and on return to normality, the period should be increased again to 60 months;".

The Minister and I have discussed this previously. The objectives of these two amendments are job creation and economic growth. I broadly support the Bill but my concern is that while the periods for debt settlement and personal insolvency arrangements of five years and six years, respectively, are not unreasonable for a business-as-usual economy, we are dealing with a unique set of circumstances. A large number of people with unsustainable debts who would normally be highly economically productive are in their current circumstances almost entirely because of the bubble. If many of these people are subject to an arrangement covering five years or six years, they will be taken out of economic productivity in a very substantial way. If, for the next three years, people begin to move into this process and are not cleared out of it for six years, almost a decade will have elapsed by the end of it. Many entrepreneurs will be affected. Inevitably, some of those who took risks during the bubble will be trapped.

An interesting fact I heard recently is that the average age of founders of successful start-up companies in the United States is 39 years, which is probably the average age of those affected by the property collapse, unsustainable mortgages, job losses, and so on. With regard to those who have debts as a result of the collapse of the bubble, there is no moral hazard issue at all. None of those concerned will seriously consider borrowing again sums of money as great as those they borrowed during the bubble. For the sake of economic growth, existing household debt needs to be cleared as quickly as possible. Therefore, I propose that, for a limited period, the debt settlement and personal insolvency arrangement periods be no more than three years. The Minister referred to the United Kingdom several times and we talked about the value of the car and the debt relief notice. He was benchmarking against the United Kingdom. As he is well aware, the United Kingdom has a bankruptcy period of one year, potentially with an income attachment of two years. In this case, I would be more than happy to benchmark against the United Kingdom.

The amendments are important. If there were another way to address this matter, I would certainly urge the Minister and his team to consider it.

Asking people to go through a six-year period to clear existing debt represents a huge missed opportunity to clear out unsustainable household debt in the economy and begin driving job creation and economic growth.

The Deputy's amendments seek to reduce the maximum duration of a debt settlement arrangement from 60 to 36 months and in the case of a personal insolvency arrangement, from 72 to 48 months. I have no doubt that these proposals are motivated by a desire to assist people struggling with debt to return to a more normal situation. However, normality can be a difficult concept to define. The debt settlement arrangement process will allow debtors to enter into a consensual arrangement to resolve debt issues which, in this instance, relate to unsecured debt. In circumstances where, at the end of the period, an amount of the debt may well be forgiven or wiped out, there must be some incentive for creditors to enter into such an arrangement. This is provided by way of a significant specified timeline for some payments to be made. The time provision in the debt settlement arrangement mirrors similar timeframes allowed for the settlement of unsecured credit in other common law jurisdictions. It permits a reasonable period for the debtor to make payments to creditors and receive the likely discount on his or her debts. The Deputy's proposal to shorten the period to 36 months could make it difficult to facilitate the conclusion of an arrangement in many cases. Moreover, it might well be counterproductive in that it would offer a major disincentive to creditors to agree to a settlement.

Similar considerations apply in regard to the personal insolvency arrangement, which is a unique process not replicated elsewhere. The proposed duration period of 72 months is of a reasonable length for the debtor to fulfil the terms, which may include significant debt write-offs by secured creditors. As I have said on other occasions, we are dealing here with debtors whose financial circumstances are extraordinarily difficult, who might be in substantial negative equity and who have no realistic prospect, based on their income and resources, of being able to cope in the near to middle term with their repayments. In some instances - not all, but some - the only way forward for such individuals, both in their own interests and in terms of financial institutions crystalising the reality of non-recoverable debt, will be debt forgiveness as opposed to debt forbearance, that is, the writing off of some level of debt. Where that occurs, there must be an identifiable reasonable period of time during which the new arrangements work and an assurance that payments will be received in the context of the arrangements into which the parties have entered.

We have fixed the durations we regard as appropriate in the context of our debt resolution measures as the best means of ensuring consensus between debtors and creditors. I very much acknowledge the Deputy's position on this issue and the sincerity with which he has made his case. In addressing the problems facing this country, we must not only ensure there is a reasonable relationship between State expenditure and State income but we must, in addition, do everything possible to get the domestic economy motoring to a substantially greater extent than is currently the case and give people who are weighed down with debt a genuine hope of reorganising their lives in circumstances in which their income now and for the reasonably foreseeable future renders it impossible for them to meet their levels of indebtedness. These are clear and important objectives.

We must also bear in mind that this legislation is not simply about those in mortgage difficulties. Its function, rather, is to deal with the broad range of insolvency circumstances in which people may find themselves. The personal insolvency arrangement is applicable where there is a mixture of secured and unsecured debt, while the debt settlement arrangement relates exclusively to unsecured debt. We must incentivise creditors to agree to what are effectively personal reorganisations or recalibrations of the financial circumstances of customers who are in debt distress. In other words, we must incentivise creditors, where it is necessary, desirable and appropriate so to do, based on a full and frank financial disclosure of the income, assets, resources and liabilities of a debtor, to do a deal. Such deals will involve an agreement to a write-off, where appropriate, of a portion of what is due in return for an assurance that the remaining portion will be paid over a reasonable period. For some debtors, two or three years will not be a reasonable period. They will require greater latitude in order to ensure they retain for themselves the funding necessary to meet reasonable expenses, which includes not only their own personal outgoings but, where applicable, those of dependent spouses, partners or children.

The elasticity in this arrangement will be beneficial for debtors. A shorter period, on the other hand, might encourage creditors, even where they agree to some level of write-off, to demand that a larger amount be paid within a shorter period, which might not be financially feasible and could render it impossible for some people to avail of a debt settlement arrangement or personal insolvency arrangement, thus leaving them with no choice but to go into bankruptcy. It is vital that people are not unduly burdened in circumstances where there is no reasonable prospect of their being able to meet their overall indebtedness, but we must ensure there is a period during which creditors are assured of receiving at least a portion of what is due to them. In the case of mortgage debt, where there is debt forbearance over a sufficiently elongated period to allow people to get their finances in order and where that forbearance may involve a discharge of a portion of unsecured debt, there must be the prospect for the financial institution that payments of an additional nature will be made at the end of the five years.

What we are saying here is that if debt forgiveness is granted, there must be some period during which the new arrangement that is put in place is abided by and is seen to work. Take, for example, a household in serious negative equity where there were previously two incomes but now there is only one, and that substantially lower than what it might have been in 2005 or 2006. The financial institution, having examined the household's financial position and taking account of the current property value, might conclude that it is not realistic financially to expect the debtor in question to discharge his or her capital debt in full. The bank will weigh this option against the losses it would suffer were it to repossess the property and sell it at a loss. One of the objectives of the legislation is to ensure that where people who are in financial difficulties are living in properties deemed reasonable in terms of their family requirements, as opposed to large mansions, they must be facilitated to retain their home. We are seeking to ensure that such persons do not fall into bankruptcy and do not lose their home. Under the various options for personal insolvency arrangements that we are providing, there might be some type of incentivised debt forgiveness mechanism whereby, for instance, a debtor complies with an agreement to pay a certain portion of interest and capital in years one and two on the basis that if his or her financial circumstances do not improve, the financial institution will, in year three, agree formally to write off a portion of the capital debt. Likewise, an institution might agree, over a period of five years, to write off particular portions of capital debt.

The timeframes set out in the Bill are reasonable.

I could argue the concerns the Deputy is making, but I do have concerns that may result in creditors not agreeing to arrangements because their perspective may be that if it was more elongated they would recover more. It may act as a disincentive to some creditors engaging. It may force some families and individuals into bankruptcy who may be kept out of that. Some of this is based on human conduct and how people may respond to and deal with new mechanisms. However, as I have said on other issues, we will keep the workings of this under review. We will look carefully at how it is functioning. I would expect the insolvency service to produce a report at the end of the first year as to how things are working. I expect we will have active personal insolvency practitioners who see at the coal face the extent to which creditors, including financial institutions, are co-operating. The issue of the co-operation of financial institutions in this is something that the Financial Regulator is keeping under a watchful eye. We have had reports on the extent to which financial institutions are currently engaging with debtors. In the context of the architecture of this legislation, there will be an overview of the possibilities of agreed debt resolution.

What we have here is practical and reasonable and holds out the maximum possibilities of engaging creditors. I am aware, as is the Government, of the importance of those who are currently weighed down by debt not only having hope for the future but also having some of the burden relieved so they become active participants in the wider economy. That clearly is an important issue but I am afraid that at this stage I cannot accept the Deputy's amendments, although I know they have been tabled in good faith. It is important that we tease this out publicly and discuss it, however, so I thank the Deputy for giving us an opportunity to do so.

I thank the Minister for his comprehensive response. I appreciate the spirit in which he is trying to set these limits. I also appreciate that he is trying to achieve a delicate balance. From what I have heard, I understand the Minister's position to be that it has to be that long - five or six years - to make it worthwhile for banks or other creditors.

There are a lot of other creditors out there. They are not all banks.

Absolutely. I appreciate that but we have to make it worth their while. Therefore in a business-as-usual situation I do not think these are necessarily unreasonable. However, we do know how the banks have been behaving to date. We are all dealing with this in our constituencies. FLAC, New Beginning, MABS and others are dealing with some very objectionable behaviour from the banks. I was dealing with a case late last night where a bank brought in solicitors but did not tell the borrower in advance. They scared the daylights out of her with all sorts of threats. It is going on every day and we are all well aware of it.

As the Minister knows, the purpose of the amendments is not to shorten the time permanently; they are for a time-limited period. This is in the spirit of clearing out household debt. Therefore, while I did not believe the Minister would necessarily accept my amendments, I would like to offer three ways in which the spirit of what I am trying to achieve might be considered. Let us take the case of a lady I met recently in Wicklow town where she bought a house which is now worth about one third of what she paid for it. She became very ill and as a result had to give up her job. She was three years out and is ready to resume work but there is no work available. Meanwhile, the bank is moving to take the property off her. I have looked at the numbers and they are not sustainable. In that situation there is no public good to be served by keeping that lady in a six-year process. We could argue that the bank needs an incentive to make a deal with her but if she is put into a six-year process she is not necessarily going to look for work. She is not going to try to better her own economic situation if she believes that everything she does will be taken by the banks. There are a large number of current unsustainable debts for which the public good is best served by getting people out of that situation as quickly as possible. Between the Minister, Deputy Shatter, and the Minister for Finance, additional pressure can be brought to bear on the banks, many of which we own. We can instruct them to act as we see fit.

I would like to suggest three things for the Minister's consideration. The first is that the settlement period should begin from when the arrears started. I appreciate that there is potentially a moral hazard issue, but that system is used in the UK. I would hate to see a situation whereby the debt becomes unsustainable, somebody goes into arrears and they spend six months trying to work it out with the bank. They then go to the personal insolvency professional and there follows several months of negotiation, and it is a year after the debt becomes unsustainable that the five or six-year period even begins. I would like the Minister to take a look at that - to get the period to start as quickly as possible.

The second point concerns guidance from the Minister and the Government. The legislation contains the phrase "no more than five years" or "no more than six years", so deals of one, two or three years could be done. The Minister and the Government should provide clear guidance to the personal insolvency professionals, courts and banks to the effect that in situations where there is clearly no public good - as per the example I just gave and there are many more - it is the Government's intention that the maximum duration periods would not be used. What I am hoping to achieve in terms of job creation and economic growth, could be achieved through clear direction from the Minister as to the use of the period. There is latitude here for the personal insolvency professionals, courts, debtors and creditors to use whatever period they see fit.

The third point concerns additional income. I note that in the debt relief notice the amount a person can take - as we discussed earlier - is 50% of net income. Therefore, if a person earns €1,000 a month and taxes and levies take €500 of that, they get to keep €250 while giving €250 to the creditor. If deals are done whereby during the five or six-year period somebody has to give up half or more of the net amount to the bank, we are essentially talking about a marginal tax rate of 75%, 80% or 85%. Some 50% goes to the Government, while another 25%, 30% or 35% goes to the bank so one is left with 15% or 20%. It is clear that if we apply what would essentially be a marginal tax rate on new work of 80%, people are not going to work the extra hours. Neither will they go back to college to get extra qualifications in order to increase their income if some 85% of it goes to the Government and the banks.

Those are the three things I would like the Minister to consider. First, arrears should be started as early as possible. Second, clear guidance should be provided that the legislation is setting a maximum of five or six years. We all know the banks will drive it and will throw the most expensive lawyers, analysts and accountants at this to set a precedent at the start. They will want to anchor these things at the maximum amounts. Clear guidance from the Minister on this would be incredibly useful to people with unsustainable mortgages. Third, the Minister should also provide some guidance on leaving the debtor with sufficient additional income during the period, so that it is worth their while upskilling, training, retraining and working hard.

I will reply, first, to the Deputy's example of his constituent in Wicklow. The answer to that is blindingly obvious and the financial institutions will have to address that issue properly. Where someone has either no income or a reduced income, their only asset is the family home which has dropped in value by two thirds and is therefore in negative equity, and where the individual has no other source of income or other asset, financial institutions have two choices. They could try to repossess the home where there are arrears. If so, all they will realise when they sell it, if they can sell it at all, is one third of the value.

That is exactly what they are doing.

It will not recoup the extra two thirds and if that individual has no other assets, even if the institution is not willing to write off formally the outstanding debt, there is no way it will ever recover it. For individuals in this position, there is one message and one message only to the financial institutions, which is to use the personal insolvency arrangement, PIA, to effect what Members call debt forgiveness and which everyone outside this House refers to as being when one writes off a portion of the capital debt. There is nothing to be gained by the bank in doing anything other than that and it is better off doing this if the circumstances bring about a position in which the individual can now start repaying both capital and interest on what remains of the capital debt. In such circumstances, the bankers save the cost of repossessing a property, of securing the property and of engaging agents to sell the property when possibly, because it has been repossessed, it might go at an even lower price than market value. Were the banks to start repossessing homes of individuals in such circumstances, all they will do is undermine further the security they have in other properties held in the residential home mortgage sector or even in the purchase-to-let sector.

Consequently, I will repeat yet again what I have stated previously in this House, which is the financial institutions must use this legislation to engage with people whose financial circumstances are so burdened that there is no realistic possibility of them ever being able to discharge the capital sum due on their homes, where they are in negative equity and where they cannot afford to make the repayments. It is not about people who will not pay; it is about those who cannot pay. Moreover, the personal insolvency arrangement is designed to ensure that in such circumstances, where it is appropriate, fair and reasonable, that individuals will retain their homes. The benefit to the individuals is they will retain their homes and there is a rearrangement of debt. Effectively, the personal insolvency arrangement is a form of personal examinership and recalibration of financial circumstances.

I am anxious to ensure that whatever the position has been of the financial institutions heretofore, that they do so engage. The Deputy gave an example of an event of which he has experience. There is a difficulty, which is that in the first instance, the financial institutions must apply the provisions of the legislation although in fairness, the legislation has not been enacted yet. However, once it has been enacted, we will be in a different and new world. Second, the financial institutions must ensure they have staff within the institutions who have the skill to deal with this in a sensible, commonsensical and humane manner, as well as in a way that is financially appropriate with regard to both financial institutions and individuals. There is no point in making a pretence that one can recover a debt in circumstances in which there has been a full-faith disclosure and one knows there is nothing from which one can recover it. In such circumstances, one enters into an appropriate discussion with the personal insolvency practitioner and appropriate arrangements should be reached. If banks and financial institutions fail to engage constructively in using these mechanisms, I will not be slow to return to this House and to do anything that is necessary to ensure this occurs.

However, I believe we are heading into a different set of circumstances. I believe that within the financial institutions, in circumstances that are appropriate to debt forgiveness, there has been too much kicking the can up the road and only dealing with what is short to medium-term debt forbearance. However, each of these issues must be dealt with based on the individual background circumstances of the individuals concerned, with a full good-faith financial disclosure into which everything fits, including income, resources, assets and liabilities, as well as with a degree of expertise within the financial institutions to ensure a uniform approach is taken in the context of similar circumstances and that people are not unnecessarily frightened.

However, there are other issues. Some individuals who are in debt are not engaging with their financial institutions and are simply ignoring any correspondence they receive. It is important that there be constructive engagement and that these mechanisms are used. I revert to the issues raised by the Deputy as to whether one could start the timeframe for a PIA from the date someone begins to go into arrears. I believe the Deputy primarily is referring to a PIA, as opposed to the debt settlement arrangement.

I believe the answer to this is one could not. For example, in the current climate some people may have been in arrears for the past three years and while the banks have not dealt with overall settlements, they have engaged in substantial forbearance for tens of thousands of people. This is a reality. Members popularly kick our absent friend, Deputy Ross, who has not engaged in this Bill at all. He has not participated on Committee or Report Stages and has not tabled a single amendment to it. He uses this forum as a stage to regularly kick the banks and while there is a great deal for which they can be criticised, the truth also is that had they not engaged in debt forbearance and had certain Government decisions not been made which encouraged debt forbearance, tens of thousands of people, who remain in their family homes and with whom at least temporary or intermediate arrangements have been made, would otherwise have been facing repossession proceedings. In reality, we have had debt forbearance on a grand scale but this tends to be ignored.

I agree with the Deputy - this is the reason Members are passing this legislation - that what is needed is what I would describe as final resolution. We need the mechanisms that facilitate final decisions being made where debt forbearance will work and where over a period of years, people will be allowed to work through their debt position, there is light at the end of the tunnel and obligations to creditors ultimately are met or are met in a recalibrated way that allows one to exit. This is one sense of this proposal. However, in the context of the debt resolution mechanisms, it is clear that within each, from the lowest one down, that is, the debt relief notice, all the way up to the PIA, there is the understanding and the architecture to provide for debt forgiveness or debt write-off, where appropriate. It is that piece of the jigsaw which has not yet been addressed adequately.

I note that in arrangements reached between creditors and banks in some instances, certainly for business purposes, there have been arrangements of debt write-off. In cases where has been a perspective that a business is viable, there has been some element of this. However, in the broad sense of residential mortgages, it still has not been addressed adequately and where it has happened - I know of some cases, albeit not many - it is not publicised. The banks have a fear that as soon as one uses words such as "write off" or "forgiveness", individuals who quite clearly can pay will contrive to create circumstances in which they may try to seek debt write-off in circumstances in which it is not warranted and which is unfair to taxpayers. One must remember it is taxpayers who have been financing the banks and no matter how one might deplore the previous behaviour of financial institutions, everyone in the State has an interest in ensuring the banks' capitalisation is sound. Everyone has an interest in the banks playing a normal role in the economy. The Deputy was correct when he noted we are not in normal times. We are not as we are in extraordinary times, unfortunately. However, we must build the mechanisms around this and the mechanism being proposed here provides an opportunity to address these issues.

Were one to take the timeframe from the date someone went into arrears, it would not work because the idea is that one works through one's debt over the period from the moment when the agreement is reached. Were one to do that, it might suit some debtors to manipulate the system whereby one becomes engaged in a never-ending negotiation to effect some solvency resolution but one knows that as the time ticks, one is reducing the period during which one might be obliged to make some repayment and one will exit quicker. Consequently, there could be a disincentive for debtors to come to resolution. In the context of the timeframes, it is reasonable and rational, particularly in respect of the personal insolvency arrangement, which is a new mechanism, that a reasonable time be left, both to work through debt and to cater for changed circumstances. Individuals who may be unemployed at a time when such an arrangement is entered into may get new job opportunities and their world may change. Moreover, the mechanisms provide that if someone's circumstances change after initial agreement has been reached, it will be possible to recalibrate or to change the agreement or to exit earlier.

While the Deputy is correct about several issues, he is absolutely correct about one particular issue, which is the five or six-year period is a maximum and is not compulsory.

In this regard I agree entirely with his comments. If the financial circumstances are absolutely clear, with no reason to believe they will drastically change and where the deal to be done is blindingly obvious, there is a good argument that part of the agreement might allow for a party to exit early. That might apply particularly to the case the Deputy outlined of a Wicklow constituent. The agreement may span two or three years of payments and at the end of that both sides may see an advantage in exiting early.

The issue of how much income is retained is a value judgment. We can park the financial institutions for a moment as there are many other categories of creditors. If a person retains 50% of net additional income, it would be reasonable for somebody running a small business, which may be in difficulty because people owe it money, to say it is grossly unfair. The business may not be happy that people can retain 50% of income but there must be an incentive for people. It would be grossly unfair for people to retain an even bigger tranche of income for lifestyle benefits and not pay the business what it is owed.

An individual may have had a holiday to the south of France two or three times a year but that practice may have temporarily stopped. If that person's job position changes, leading to additional income, is it fair for the holidays to resume when creditors are not being paid? Being able to retain 50% of net income is a real incentive for people to work harder and create opportunities, whether self-employed or needing to work overtime if in employment to generate income. There must be a point where that issue is utilised, particularly when there is debt forbearance or forgiveness, in trying to get people to meet debt obligations. The provisions provided are reasonable.

I hope I have addressed the issues raised by Deputy Donnelly. We have probably gone on far too long with the issue with regard to Report Stage time constraints but it is important. I thank the Deputy for raising it.

I allowed some latitude because this is an important element of the Bill.

Amendment put and declared lost.

Amendments Nos. 103 and 157 are related and may be discussed together by agreement.

I move amendment No. 103:

In page 60, to delete lines 42 to 45 and substitute the following:

"require the debtor to—

(a) dispose of an interest in, or

(b) cease to occupy,

all or a part of his or her principal private residence and the personal insolvency practitioner shall consider any appropriate alternatives.".

The purpose of these drafting amendments is to improve the clarity and readability of the provisions in the debt settlement and personal solvency arrangement chapters regarding the debtor's principal private residence.

Amendment agreed to.

Amendments No. 104 and 158 are related and may be discussed together by agreement.

I move amendment No. 104:

In page 61, line 36, to delete "that".

These are essentially technical drafting amendments to remove superfluous words from the provisions. We are taking a principled stance on superfluous words.

Amendment agreed to.

Amendments Nos. 105 and 161 are related and will be discussed together by agreement.

I move amendment No. 105:

In page 62, to delete lines 7 and 8 and substitute the following:

"(b) ensure that a copy of the documents referred to in section 66 are sent to each creditor concerned with the notice calling the meeting;".

The purpose of these amendments is to clarify the requirements in sections 65 and 102 regarding the documents that must be supplied to creditors in advance of the creditors meeting to consider a proposal for debt settlement arrangement or a personal insolvency arrangement.

Amendment agreed to.

I move amendment No. 106:

In page 63, lines 23 and 24, to delete "regulations made under it" and substitute "any regulations made under that section".

The purpose of the amendment is to clarify that the regulations referred to in section 67 are the regulations to be made under section 69 regarding the holding of a creditors' meeting, which will be particularly important in the working of the legislation.

Amendment agreed to.

Amendments Nos. 107 and 108 are related and will be discussed together by agreement.

I move amendment No. 107:

In page 63, line 44, to delete "subsection (5)" and substitute "subsection (6)".

These amendments correct cross-referencing errors in the text of section 67.

Amendment agreed to.

I move amendment No. 108:

In page 64, line 13, to delete "section 57" and substitute "section 56".

Amendment agreed to.

I move amendment No. 109:

In page 65, lines 3 to 5, to delete all words from and including "representing" in line 3 down to and including "voting" in line 5 and substitute the following:

"representing not less than 50 per cent in value of the creditors present and voting".

This concerns the old chestnut of the banks wielding undue influence in voting power at a creditors' meeting. It is right and proper that we should seek to lessen the influence of overly dominant creditors with a consequential weighted vote that an organisation may have at such a meeting. It would be right to reduce it to a simple majority in order to lessen the impact of a particular creditor. The amendment would reduce the voting value in question from 65% to 50%.

The Deputy's amendment proposes to reduce the requirement that 65% of creditors vote in favour at a creditors' meeting to a value of 50% of voters. This proposal was discussed on Committee Stage and at the time I acknowledged that the question of what is the appropriate level of the qualified majority required to approve a debt settlement arrangement is difficult. As with many provisions in this Bill, a balance must be struck between the rights of debtors and those of creditors. The threshold should not be so high so that creditors representing a relatively small amount of a debtor's overall indebtedness would be in a position to prevent an arrangement from being approved.

A threshold of 50% is proposed by Deputy Collins, and that would reduce protection for creditors' rights in a very significant way. It may not incentivise them to conclude arrangements and may, among other things, have implications for the supply of credit in the economy. Having regard to the features of the debt settlement arrangement process as contained in the Bill, I remain of the view expressed on Committee Stage that the threshold level of 65% is appropriate and will achieve a suitable balance between the rights of debtors and creditors.

It is worth mentioning an issue we discussed on Committee Stage. When the Law Reform Commission examined the issue for the purpose of its report on personal debt management and debt enforcement, which was published in December 2010, the level of qualified majority proposed from the various submissions ranged from between 60% and 75% of creditors in value. The commission ultimately recommended a threshold of 60% and described this as a "relatively low value".

Deputy Donnelly stated he would be happy to adopt certain aspects of the English approach but I am not sure he would be happy to do so in this context. In England, Wales and Northern Ireland, under the comparable individual voluntary arrangement process, which reflects our debt settlement arrangement, a threshold of 75% creditor approval is required. One could argue about whether the level should be 60% or 75% but considering the outcomes in Britain, the higher threshold has not prevented the successful operation of that process in the jurisdictions I mentioned. There were approximately 50,000 individual voluntary arrangements approved in 2011 with the higher threshold of 75%.

Bearing in mind the background of the submissions made to the Law Reform Commission and the need to ensure that creditors are brought on board and we deal with this issue in a way that does not create any risk of constitutional difficulties as well, 65% is a reasonable threshold to prescribe.

Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 81; Níl, 38.

  • Barry, Tom.
  • Breen, Pat.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Coveney, Simon.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Heydon, Martin.
  • Hogan, Phil.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Keaveney, Colm.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • McCarthy, Michael.
  • McEntee, Shane.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mathews, Peter.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Dara.
  • Murphy, Eoghan.
  • Neville, Dan.
  • Nolan, Derek.
  • Ó Ríordáin, Aodhán.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Reilly, Joe.
  • Penrose, Willie.
  • Perry, John.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Rabbitte, Pat.
  • 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

  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Browne, John.
  • Calleary, Dara.
  • Collins, Joan.
  • Collins, Niall.
  • Colreavy, Michael.
  • Cowen, Barry.
  • Crowe, Seán.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Ferris, Martin.
  • Fleming, Tom.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Kitt, Michael P.
  • Mac Lochlainn, Pádraig.
  • McConalogue, Charlie.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGuinness, John.
  • McLellan, Sandra.
  • Moynihan, Michael.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Ó Caoláin, Caoimhghín.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Dea, Willie.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Troy, Robert.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Michael Moynihan and Seán Ó Fearghaíl.
Question declared carried.

I move amendment No. 110:

In page 65, lines 22 and 23, to delete "shall be 14 days, but such period".

Amendment No. 110 is being discussed with amendment No. 169. The purpose of these amendments is to remove superfluous references to the 14-day notice period for creditors meetings in sections 69 and 107. The 14-day notice period is already provided for in sections 65 and 102.

Amendment agreed to.

I move amendment No. 111:

In page 66, lines 10 and 11, to delete "section 69(3)" and substitute "section 70(3)".

This amendment corrects a cross-referencing error in the text of section 71.

Amendment agreed to.

Amendments Nos. 112 and 171 are related and may be discussed together.

I move amendment No. 112:

In page 66, to delete lines 15 to 18 and substitute the following:

"(2) The hearing of an objection lodged under section 70(3) shall be heard with all due expedition.".

The purpose of these drafting amendments is to improve the clarity of the provision regarding court hearings of objections to the coming into effect of a debt settlement agreement or a personal insolvency arrangement and also to ensure consistency between sections 72 and 110.

Amendment agreed to.

Amendments Nos. 113 and 172 are related and may be discussed together.

I move amendment No. 113:

In page 66, line 22, to delete "by the Insolvency Service" and substitute "under section 56".

These proposed amendments seek to correct drafting errors in the text of sections 72 and 110. As currently worded, the text refers to the protective certificate being issued by the insolvency service when, in fact, the certificate will be issued by the appropriate court.

Amendment agreed to.

Amendments Nos. 114 and 173 are related and may be discussed together.

I move amendment No. 114:

In page 67, lines 17 and 18, to delete all words from and including "every" in line 17 down to and including "meeting" in line 18 and substitute the following:

"in respect of every specified debt, the creditor concerned,".

These are technical amendments which aim to ensure that all relevant creditors are bound by debt settlement arrangement or personal insolvency arrangement whether or not they voted in favour of the arrangement.

Amendment agreed to.

Amendments No. 115 has already been discussed with amendment No. 61.

I move amendment No. 115:

In page 70, line 1, to delete "the level of" and substitute "the extent of".

Amendment agreed to.

I move amendment No. 116:

In page 70, line 7, after "subject" to insert "as a debtor".

The purpose of this technical amendment is to clarify the application of section 76(4) and to bring the text of the provision into line with corresponding provisions that apply to debt relief notices and personal insolvency arrangements.

Amendment agreed to.

I move amendment No. 117:

In page 70, line 29, to delete "may" and substitute "shall".

The objective of the change in the wording is to compel the practitioner to do his or her job effectively.

I thank the Deputy for this proposed amendment. Changing "may" to "shall" in regard to the requirement on the personal insolvency practitioner, in the context of proposing a variation of a debt settlement arrangement, may seem logical but there may be circumstances where a debtor's financial circumstances deteriorates so rapidly that termination of the arrangement seems imminent. In such a case, a statutory requirement for a meeting to be called might not be desirable. However, I am conscious that we should have regard to any inconsistency issues which may arise in the context of a similar provision in section 115 in respect of a variation of a personal insolvency arrangement.

I wish to consider the point further with the Parliamentary Counsel and I assure the Deputy that any amendment necessary to achieve consistency, including his amendment, will be brought forward on Committee Stage in the Seanad. With that assurance, I hope the Deputy will agree to withdraw the amendment so that we can get further advices from Parliamentary Counsel on what is proposed.

Amendment, by leave, withdrawn.

I move amendment No. 118:

In page 72, line 14, to delete “should” and substitute “shall”.

The purpose of this amendment is to correct a grammatical error in the text of section 78.

Amendment agreed to.

Amendments Nos. 119, 183 and 184 are related and may be discussed together.

I move amendment No. 119:

In page 72, lines 21 and 22, to delete all words from and including “at” in line 21 down to and including “Arrangement,” in line 22 and substitute the following:

“as respects a Debt Settlement Arrangement, at any time during which the arrangement concerned is in effect,”.

The purpose of amendments Nos. 119 and 183 is to improve the clarity of the provisions regarding the timeframe in which an application can be made to have a debt settlement arrangement or personal insolvency arrangement terminated by the court. Amendment No. 184 is a technical drafting amendment to improve the clarity of the text of section 117.

Amendment agreed to.

Amendments Nos. 120 to 127, inclusive, are related and may be discussed together.

I move amendment No. 120:

In page 72, line 39, to delete “3 months” and substitute “6 months”.

This is an attempt to be on the side of the debtor in this process. The section provides for the right of a creditor to have a settlement annulled for a number of reasons. If the debtor is in arrears for up to three months, the creditor can apply to have the arrangement ended. The amendment seeks to extend this period from three to six months. Given the large number of people in arrears, it basically reflects that reality. It would give people more breathing space to work themselves out of the process if they find themselves in difficulty after signing up to it. It provides for flexibility in achieving the goal of the process.

Amendments Nos. 120 to 123, inclusive, refer to section 79 and seek to increase the time period for an application by a creditor or personal insolvency practitioner to the appropriate court to have a debt settlement arrangement terminated where the debtor has been arrears with payment for a period of not less than three months to a period of six months. Deputy Collins raised this point on Committee Stage. In the context of the debt settlement arrangement where, without any notification by the debtor to his or her personal insolvency practitioner, a six month payment default occurs, that arrangement is unlikely to succeed. It is important to remember that we are seeking to balance the interests of debtors and creditors through the debt resolution process. I remain unconvinced that the period in this section should be extended to six months. It is likely that substantial arrears accumulating in the context of moneys owing to a variety of individuals was the reason that the arrangement was put in place in the first instance. It would be put in place on the assumption that the debtor was going to meet his or her repayment commitments, as agreed, and indeed would have the capacity to meet them. It would be unfair to creditors to prolong matters unduly to a six month period in circumstances where it has become obvious the arrangement simply is not working. A three month period in this context is adequate, so I oppose the amendments.

Amendments Nos. 124 to 127, inclusive, refer to section 80 and seek to increase from six months to nine the timeframe in which the debtor has been in default sufficient for a debt settlement arrangement to be deemed to have failed and needing to be terminated. Deputy Collins also raised these points on Committee Stage. I am opposed to the amendments for the reasons I expressed on Committee Stage. In a debt settlement arrangement where, without any notification by the debtor to his or her personal insolvency practitioner, a six month payment default has occurred, that arrangement is clearly unlikely to succeed. I am not convinced the default period should be extended to nine months.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 121:

In page 73, line 2, to delete “3 months” and substitute “6 months”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 122:

In page 73, line 4, to delete “3 month” and substitute “6 month”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 123:

In page 73, line 9, to delete “3 month” and substitute “6 month”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 124:

In page 73, line 19, to delete “6 months” and substitute “9 months”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 125:

In page 73, line 28, to delete “6 months” and substitute “9 months”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 126:

In page 73, line 29, to delete “6 month” and substitute “9 month”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 127:

In page 73, line 33, to delete “6 month” and substitute “9 month”.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

Amendments Nos. 128 and 187 are related and may be discussed together.

I move amendment No. 128:

In page 73, line 44, to delete “otherwise;” and substitute “otherwise; or”.

These are technical drafting amendments which are required to ensure consistency in the terminology used in the Bill.

Amendment agreed to.

Amendments Nos. 129 and 188 are related and may be discussed together.

I move amendment No. 129:

In page 74, line 10, after “debtor” to insert “concerned”.

These are technical drafting amendments to improve the clarity of the references to the debtor in sections 83 and 120.

Amendment agreed to.

Amendments Nos. 130 and 131 are related and may be discussed together.

I move amendment No. 130:

In page 74, line 45, to delete “3 years” and substitute “2 years”.

The amendment seeks to shorten the look-back period which a creditor can cite if they come into dispute with the debtor in terms of alleging that the debtor manipulated or put themselves into a position where they would have to avail of a debt settlement arrangement.

I oppose the amendments. Deputy Collins seeks to reduce the period prior to the debtor seeking to agree a debt settlement arrangement during which a transaction at under value or at a preference which seeks to deny creditors' their legitimate rights may be challenged by a creditor. The reduction he is seeking is from three years to two. The three year period provides a useful deterrent to any temptation on the part of a debtor to rearrange his or her affairs strategically in such a way as to deprive creditors of their rights and entitlements. I am similarly providing for a three year period in regard to bankruptcy. Deputy Collins has said nothing to convince me the reduction is warranted. I believe the three year period is reasonable. We should not seek to facilitate individuals deliberately dealing with their affairs in a manner which could effectively deprive creditors of the funding to which they are entitled.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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