Personal Insolvency Bill 2012: Report and Final Stages
Before we commence, I remind Senators that a Senator may contribute only once on Report Stage, except the proposer of an amendment who may reply to the discussion on the amendment. Each Opposition amendment must be seconded.
Amendments Nos. 1 and 5 are related and will be discussed together.
Government amendment No. 1:
In page 10, line 18, to delete "and apart".
Amendments Nos. 1 and 5 are similar technical drafting amendments required to refine the text of the Bill. I am advised by the Parliamentary Counsel that the words "and apart" are not required in this context and should be deleted in both instances.
The Minister has been helpful throughout this process but he should accept that an inordinate number of amendments have been tabled by him and we were only notified late last night. I acknowledge many of them are technical but this is not the best way for legislators to properly scrutinise legislation, as we have not been given sufficient notice. The Law Library could do not justice to these amendments in the timeframe we have been given. I acknowledge, however, that the Minister has been helpful in extending the time to debate the various Stages of the Bill.
I apologise to the Senator. We have a deadline to complete the legislation. Tens of thousands of people see this as important to their lives and it is important that we complete passage of the legislation prior to the Christmas break. Some of the amendments are technical while I was asked by Members to make others and address issues that were raised. Because of the lateness of completion of the debate on Committee Stage, it meant some amendments were not finalised by the Parliamentary Counsel's office until the last minute. I would have preferred to have gone through them myself a little earlier than I did but we have done our best to try to address any technical difficulties and deal with other issues we had to leave over until Report Stage. I hope Senators will appreciate that we have listened carefully to the debate in this House and that some amendments address issues they raised.
I support Senator Cullinane's comments. During the statements on the 90th anniversary of Seanad Éireann earlier, the conduct of this Bill was mentioned as a beacon of how the House can operate. I agree with Senator Cullinane's comments about the Minister's willingness to take on board points made in the House, which is appreciated.
Amendment agreed to.
Amendments Nos. 2, 21 and 135 are related and will be discussed together.
Government amendment No. 2:
In page 11, between lines 6 and 7, to insert the following:
" "electronic means" includes electrical, digital, magnetic, optical, electromagnetic, biometric and photonic means of transmission of data and other forms of related technology by means of which data is transmitted;".
Amendment No. 2 inserts a definition of "electronic means". The definition is required as a result of the proposed new section 23 in amendment No. 21, which provides for the insolvency service to communicate via electronic means. Amendment No. 21 is designed to facilitate the processing of documents by the insolvency service and the Courts Service in regard to applications for the various debt resolution arrangements provided for in the Bill. In developing the necessary systems for the insolvency service to operate the new debt relief notice, DRN, the debt settlement arrangement, DSA, and the personal insolvency arrangement, PIA, there is a significant effectiveness and efficiency requirement for the new processes to operate on a paperless basis to the maximum extent possible. The various elements of each process should operate on an electronic completion and transmission basis. The amendment makes clear that the functions of the insolvency service can be discharged by electronic means.
Amendments No. 135 proposes the insertion of a new section 134, which is consistent with the approach elsewhere in the Bill to allow maximum use of technology in the processes. This new section will allow a court to receive and issue a document by electronic means and this will include a judgment or any order made by this court. This provision will facilitate an efficient deployment of staff and court time. These provisions can be brought into operate by rule of court. It is my intention to bring forward as soon as possible similar provision to facilitate electronic lodgement of documents or information in respect of a broad range of court proceedings. The amendments will ensure the court processes and the connectivity between the insolvency service and the courts are at the front line of technical possibilities with a view to reducing the volume of paper necessary.
It is setting up and establishing for the first time the type of system which should ultimately be applied right across the broad range of court procedures.
Amendment agreed to.
Government amendments Nos. 3 and 127 are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 3:
In page 11, between lines 7 and 8, to insert the following:
" "insolvency arrangement" means a Debt Relief Notice, Debt Settlement Arrangement or a Personal Insolvency Arrangement;".
Amendment No. 3 is a technical drafting amendment which inserts the necessary definition of "insolvency arrangement" in the Bill. The proposed definition arises as a consequence of the amendments concerning transactions at undervalue where this terminology is used. Amendment No. 127 arises as a consequence of amendment No. 3. It removes the interpretation provision in section 128(7) regarding insolvency arrangements.
Amendment agreed to.
Government amendments Nos. 4, 25, 28, 42, 72, 117 and 142a are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 4:
In page 11, between lines 34 and 35, to insert the following:
" "relevant pension arrangement" means:
(a) a retirement benefits scheme, within the meaning of section 771 of the Taxes Consolidation Act 1997, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1 of Part 30 of that Act;
(b ) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784 of the Taxes Consolidation Act 1997;
(c ) a PRSA contract, within the meaning of section 787A of the Taxes Consolidation Act 1997, in respect of a PRSA product, within the meaning of that section;
(d) a qualifying overseas pension plan within the meaning of section 787M of the Taxes Consolidation Act 1997;
(e ) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004;
(f ) a statutory scheme, within the meaning of section 770(1) of the Taxes Consolidation Act 1997, other than a public service pension scheme referred to in paragraph (e );
(g ) such other pension arrangement as may be prescribed by the Minister, following consultation with the Ministers for Finance, Social Protection and Public Expenditure and Reform;".
These amendments essentially relate to the new provisions in the Bill in regard to the treatment of pensions in the new and reformed insolvency processes. Amendment No. 4 provides for definitions in regard to relevant pension arrangements for the new debt resolution processes in bankruptcy. The definition is a prerequisite in regard to further amendments to the Bill providing that a pension pot will not be counted as an asset in the overall insolvency regime. For example, in the debt relief notice process, a pension pot will not be counted against the asset exemption limit of €400, but payments which the debtor is entitled to receive but has not yet received will be regarded as income. This amendment mirrors an amendment in the similar UK and Northern Ireland debt relief notice process to address a situation whereby small future pension arrangements push debtors over the asset exemption limit and prevent them from accessing this basic debt relief.
Amendments Nos. 25 and 28 are linked. Amendment No. 25 provides for the exemption in regard to a pension pot. However, this is subject to the provisions being inserted by amendment No. 28 which does not exempt income received or entitled to be received in the context of the income test in relation to a debt relief notice application.
Amendment No. 42 sets out how pension arrangements are to be treated in the context of debt settlement arrangements and personal insolvency arrangements. It provides that the DSA and PIA processes cannot require a debtor to hand over his or her pension pot or to draw down a pension early.
Amendment No. 72 inserts a new section in the Bill which will allow a creditor or a personal insolvency practitioner of a debtor in respect of whom a debt settlement arrangement is in force to make an application to the appropriate court for relief in accordance with this section where the creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement. The net excessive contributions to the debtor's pension must have been made within the three-year period prior to the issue of the protective certificate. Subsection (3) provides that where the court finds that the debtor's pension contributions were excessive, it can direct such part of the contribution concerned, less any tax required to be deducted, to be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution among creditors of the debtor. It may make such other orders as the court deems appropriate, including an order as to the costs of the application. Subsection (4) sets out matters that the court should have regard to in the consideration of this matter.
Amendment No. 117 is similar to amendment No. 72. The purpose of the amendment is to allow a creditor challenge a personal insolvency arrangement in a situation where the debtor may have made excessive pension contributions in the three years prior to the issue of the protective certificate with a view to putting funds out of reach of creditors.
Amendment No. 142a provides for the insertion of two new sections, new section 44A and new section 44B, into the Bankruptcy Act 1988. The new section 44A provides that the future entitlement to payment under a relevant pension arrangement, perhaps better and more colloquially described as a pension pot, of a person adjudicated bankrupt will not vest in the official assignee in bankruptcy. The section sets out the various conditions attached and lists the types of relevant pension arrangements accompanied by the section. However, any income from a pension, either in payment or whether there is an entitlement to receive a payment, is not exempt and may be claimed by the official assignee or the trustee in bankruptcy. This is a significant improvement in our bankruptcy law as it recognises the desirability of persons making contributions to provide for the future and not impose an excessive burden on the State. This provision is similar to that in the UK to exempt pension pots from being ceased in a bankruptcy.
Section 44B provides again that in a case where the bankrupt has made excessive contributions to his or her pension within the three years prior to being adjudicated bankrupt, the official assignee or the trustee in bankruptcy can apply to court for an order in relation to the pension for the purpose of ensuring the excessive contributions can be made available for distribution to creditors. This mirrors similar provisions in regard to excessive contributions in the debt settlement arrangement and personal insolvency arrangement processes. This is an important counterbalance to the exemption allowed in the previous section.
Amendment agreed to.
Government amendment No. 5:
In page 12, line 17, to delete "and apart".
Amendment agreed to.
Government amendment No. 6:
In page 12, to delete lines 46 to 48.
This amendment, in regard to section 2(2)(b), as currently drafted, refers to section 157 of the Corporation Tax Act 1976 for the interpretation of "control". I am advised by the Parliamentary Counsel that this definition should be deleted.
Amendment agreed to.
Government amendments Nos. 7, 22, 26, 69 to 71, inclusive, and 114 to 116, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 7:
In page 13, between lines 2 and 3 to insert the following:
"(4) For the purposes of section 24(2)(g)(i), 84(1)(g) and 116(1)(g), a debtor enters into a transaction with another person at an undervalue if he or she-
(a) makes a gift to, or otherwise enters into a transaction with, that other person on terms that provide for the debtor to receive no consideration or
(b) enters into a transaction with that other person, the value of which, in money or money's worth, is significantly greater than the value, in money or money's worth, of the consideration provided by that other person.
(5) For the purposes of section 24(2)(g)(ii), 84(1)(h) and 116(1)(h), a debtor gives a preference to another person if-
(a) the other person is a creditor of the debtor to whom a debt (other than an excluded debt or an excludable debt) is owed, or is a surety or guarantor for any such debt, and
(b) the debtor does any thing (including the granting of security), or suffers any thing to be done, which has the effect of putting that other person into a position which, in the event that the insolvency arrangement concerned is issued or comes into effect, as the case may be, would be better than the position in which that other person would have been if that thing had not been done or suffered to be done.".
Amendment No. 7 provides for definitions in regard to transactions at undervalue or the giving of a preference, such actions being designed to frustrate the legitimate interests of creditors. Amendment No. 22 is designed to refine the provisions in section 24 in regard to the conditions on the debtor applying for debt relief notice concerning any transactions he or she may have entered into in the previous two years designed to frustrate the legitimate rights of creditors. Amendment No. 26 is a drafting amendment. It arises as a consequence of the revised approach to transactions at an undervalue or of fraudulent preference.
Amendment No. 69 is a technical drafting amendment. It arises as a consequence of amendment No. 71 which proposes the deletion of section 84(2) and (3) from the Bill. Amendment No. 70 is a technical drafting amendment to improve the construction of paragraph (h) in relation to fraudulent preferences that might be made by the debtor. Amendment No. 71 proposes the deletion of section 84(2). This provision is no longer required following the proposed amendments in relation to transactions at undervalue by the debtor.
Amendment No. 114 is a technical drafting amendment which arises as a consequence of amendment No. 116 which proposes the deletion of section 116(2). Amendment No. 115 is a technical drafting amendment to improve the construction of paragraph (h) of section 116(1) in relation to fraudulent preferences that might be made by the debtor. Amendment No. 116 proposes the deletion of section 116(2) and (3). This provision is no longer required following the proposed amendments in relation to transactions at undervalue by the debtor.
Amendment agreed to.
Government amendments Nos. 8, 154 and 155 are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 8:
In page 13, to delete lines 29 to 42 and substitute the following:
"(2) The performance of the functions, and the exercise of the powers and jurisdiction, conferred by this Act on the Circuit Court shall be within the jurisdiction of the circuit of the Circuit Court in which-
(a ) the debtor to whom an application under this Act relates is residing at the time of the making of the application or has resided within one year of the time of the making of the application, or
(b ) the debtor to whom the application relates has a place of business at the time of the making of the application or has had a place of business within one year of the time of the making of the application.
(3) An application to the Circuit Court under this Act may be made
(a ) in such office of, or attached to, the Circuit Court within the circuit concerned.
(b ) in such combined court office (within the meaning of section 14 of the Courts and Court Officers Act 2009) within the circuit concerned, or
(c ) in such office of the Courts Service, within the circuit concerned, designated by the Courts Service for the purpose of this Act,
as may be prescribed by rules of court.".
Amendment No. 8 further refines the existing text inserted by amendment No. 96 on Committee Stage. It proposes to delete the current section 5(2) and (3) and replace them with a minor technical amendment to ensure consistency with other courts Acts. Subsection (3)(c) is being added to facilitate the designation of a particular court office within each circuit for the purposes of the Bill. This will result in more efficient use of staff resources and allow staff to develop expertise in dealing with insolvency applications.
Amendment No. 154 proposes to replace the provision inserted on Committee Stage with a new section 153 which will now include a new provision at 19A specifying that a specialist judge shall undertake training as required by the Chief Justice or the President of the Circuit Court. This Bill contains a new area of law and it is desirable that particular training in insolvency and bankruptcy law should be undertaken. In addition, as I mentioned, as this court business would be conducted electronically, some training in the use of the relevant ICT package may also be appropriate and required.
Amendment No. 155 proposes to delete the text inserted on Committee Stage and replace it with an expanded text which includes a new provision at subsection (12) allowing the President of the Circuit Court, after consultation with the specialist judge, to assign work as appropriate between a county registrar and a specialist judge.
Amendment agreed to.
Government amendments Nos. 9 to 15, inclusive, are related and may be discussed together.
Government amendment No. 9:
In page 14, to delete lines 10 to 17 and substitute the following:
"(2) The Insolvency Service shall be a body corporate with perpetual succession and, without prejudice to the generality of the foregoing, may sue and be sued in its corporate name.".
Amendment No. 9 arises following further consideration of the organisational approach to the insolvency service. I am advised that the provisions of subsection (2)(b) and (c) are not necessary for the purposes of the operation of the insolvency service as it will not be owning or holding property in its own name - the OPW will make the necessary office accommodation available - and should be deleted. Amendment No. 10 is intended to make it clear that it should be the director, rather than the insolvency service itself, who authorises a person to enter into contracts on behalf of the insolvency service. Amendment No. 11 replaces that inserted by amendment No. 4 on Committee Stage, and improves and extends the functions of the insolvency service by now including a reference to use of the reasonable expenses guidelines, and to education and training.
Amendment No. 12 provides for the term of office of the director of the insolvency service. Amendment No. 13 addresses the current wording of section 11(3) which may not fully reflect the reporting relationship within the insolvency service in regard to who will be making the policies and decisions of the insolvency service that the director will implement. I am advised that subsection (3)(a) is not required in the context of the insolvency service and should be deleted.
Amendment No. 14 amends the text of section 8(11)(a) to delete the reference to disqualification which is not appropriate in this particular context. Amendment No. 15 makes it clear that the five-year tenure of the first director of the insolvency service, where he was previously appointed as director designate, commences on the date of appointment under this section. The current draft of the Bill does not adequately deal with this matter.
Amendment agreed to.
Government amendment No. 10:
In page 14, to delete lines 35 to 39 and substitute the following:
“(6) Any contract or instrument which, if entered into or executed by an individual, would not require to be under seal may be entered into or executed on behalf of the Insolvency Service by the Director or any person generally or specially authorised by the Director in that behalf.”.
Amendment agreed to.
Government amendment No. 11:
In page 2 of the list of amendments made in Committee, to delete the text inserted by amendment no. 4 and substitute the following:
“(h) in accordance with Part 5—
(i) authorise individuals to carry on practice as personal insolvency practitioners,
(ii) supervise and regulate persons practising as personal insolvency practitioners,
(iii) perform such functions as are assigned to the Insolvency Service under that Part,
(i) prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses under section 23,
(j) arrange for the provision of such education and training, in relation to the performance by them of their functions under this Act, of approved intermediaries, personal insolvency practitioners and other persons, as it thinks fit,”.
Amendment agreed to.
Government amendment No. 12:
In page 15, to delete lines 39 to 41 and substitute the following:
“(b) Subject to subsection (13), the Director shall hold office for such period, not exceeding 5 years from the date of his or her appointment under this section, as may be determined by the Minister.”.
Amendment agreed to.
Government amendment No. 13:
In page 16, to delete lines 14 and 15.
Amendment agreed to.
Government amendment No. 14:
In page 17, to delete lines 1 and 2 and substitute the following:
“(a) dies, resigns or is removed from office, or”.
Amendment agreed to.
Government amendment No. 15:
In page 17, to delete lines 17 to 19 and substitute the following:
“(13) If, immediately before the establishment day, a person stands designated by the Minister under subsection (12)—
(a) the Minister shall appoint that person to be the first Director, and
(b) for the purposes of subsection (1)(b), the date of that person’s designation under subsection (12) shall be deemed to be the date of his or her appointment under this section.”.
Amendment agreed to.
Amendments Nos. 16 to 19, inclusive, are related and may be discussed together.
Government amendment No. 16:
In page 19, to delete lines 10 to 45 and in page 20, to delete lines 1 to 21 and substitute the following:
15.—(1) Subject to this section, the Insolvency Service shall, in each year—
(a) prepare and adopt a business plan in respect of that year or of such other period as may be determined by the Minister, and
(b) submit the plan to the Minister.
(2) A business plan shall—
(a) indicate the activities of the Insolvency Service for the period to which the business plan relates,
(b) contain estimates of the number of employees of the Insolvency Service for the period and the business to which the plan relates, and
(c) accord with policies and objectives of the Minister and the Government as they relate to the functions of the Insolvency Service.
(3) In preparing the business plan, the Insolvency Service shall have regard to the strategic plan in operation at that time approved under section 14.
(4) The Insolvency Service shall submit to the Minister with a business plan a statement of its estimate of the income and expenditure relating to the plan that is consistent with the moneys estimated to be available to the Insolvency Service for the period to which the business plan relates.”.
Amendment No. 16 seeks to replace the existing section 15 of the Bill with new text. The proposed new text retains the requirement for the insolvency service to submit its business plans to the Minister for approval every year. However, it removes the current requirement in the Bill for the business plans to be laid before the Houses of the Oireachtas. Having reviewed the matter, I believe this onerous requirement is not necessary. The proposed amendment brings the insolvency service more in line with the governance provisions of other similar entities. It does not, however, diminish the accountability provisions of the service to the Houses of the Oireachtas.
Amendment No. 17 is a technical drafting amendment. It makes clear that the report referred to in subsection (6) is the annual report of the insolvency service which is required to be laid before both Houses of the Oireachtas. Amendment No. 18 proposes the insertion of a new subsection (8) and is linked to the previous amendment to subsection (6). The purpose of section 16 is to make provision for the preparation of reports by the insolvency service to the Minister. The provision, as currently drafted, permits the preparation of reports on a number of matters and is not limited to the preparation of annual reports. The current construction would have the effect that every single report prepared by the insolvency service, even on very minor matters, would be required to be laid before the Houses of the Oireachtas. New subsection (8) seeks to improve on the current text by giving the Minister the discretion to decide whether reports prepared by the insolvency service under the provisions of subsection (3) are to be laid before the Houses of the Oireachtas and published.
Amendment No. 19 is a technical drafting amendment required to improve the presentation of the text. It now refers to "a Committee" rather than "the Committee".
I ask the Minister to explain the impact of amendment No. 16 relating to the business plan.
This is the provision requiring that the business plan be submitted to the Minister with a statement of its estimate of the income and expenditure relating to the plan that is consistent with the moneys estimated to be available to the service for the period during which the business plan relates. Clearly if there is a business plan is presented, the funding for the insolvency service would be contained in the Estimates of expenditure. For example there is provision in the 2013 Estimates for the insolvency service. There is a general provision in the legislation whereby the insolvency service makes an annual report to the Houses of the Oireachtas. The Oireachtas Joint Committee on Justice, Defence and Equality may invite the director of the service to appear before it, if it wishes. Obviously members of the committee would be able to raise questions about the business plan with the director of the service.
As originally drafted, the director would have been peppering the Houses of the Oireachtas with a range of things to no particular benefit or advantage. We have aligned the position of the insolvency service to that of other similar agencies. It does not diminish accountability of the director to the Oireachtas Joint Committee on Justice, Defence and Equality, nor does it diminish the obligation to present the annual report. There is little purpose that minor issues that are reported to the Minister must also be laid before both Houses of the Oireachtas. That would not happen in any other aspect of the Courts Service or in related agencies. In our anxiety to be transparent, it was imposing an unnecessary bureaucracy on the service.
That is an utterly sensible approach. Would the director have the power to refuse to appear before the Oireachtas Joint Committee on Justice, Defence and Equality? Is it at his discretion or is he mandatorily required to appear before the committee? Clarity is needed to avoid a potential conflict between the committee and the director.
If the Oireachtas Joint Committee on Justice, Defence and Equality requested the director of the insolvency service to make a presentation on a particular issue or to explain how the service is working, it would be extraordinary if he did not appear and comply with that request. Clearly it would be inappropriate for members of the committee to raise questions on one identified individual's personal circumstances. Therefore, there would be certain issues the committee would not discuss. However, matters such as the implementation of policy, the type of business plan it has, the workings of the agency in oversight of personal insolvency practitioners, its connectivity with the Courts Service, the approach taken by it to approve debt settlement resolutions and I am sure many more that do not immediately come into my head would be the subject of engagement with the Oireachtas Joint Committee on Justice, Defence and Equality.
I have a supplementary question.
The Senator may only speak once on Report Stage.
I did not feel it was clarified.
Do you want to let him in, a Chathaoirligh?
No. He may only come in once on Report Stage.
I thank the Minister. My colleague raised an important issue on the powers of the Oireachtas Joint Committee on Justice, Defence and Equality in the event that the person in charge does not want to appear. Even if he does, in some of our committees we have seen that the answers are less than forthcoming and unclear. In some cases witnesses have been showing disdain for committees. This is a more general problem we have given the defeat of last year's referendum. I thank the Minister for the time he has given in coming to the House himself to deal with the amendments and give explanations on this important legislation.
The legislation clearly provides for the director of the insolvency agency, if requested by the Oireachtas Joint Committee on Justice, Defence and Equality, to come and discuss an issue but not, as I keep stating, an issue relating to a particular individual who may have a personal insolvency arrangement.
A member of the committee could not discuss an individual, but could discuss policy and business plan issues and the operation of the agencies. Difficulties being experienced by the agencies could also be discussed, such as whether they are being properly resourced. All of these issues could be appropriately dealt with and the director of the agency, be it the first director to be appointed or a subsequent director, will be very anxious to maintain a relationship with the Oireachtas Joint Committee for Justice, Equality and Defence and ensure the manner in which the agency is conducting its business is fully transparent and understood.
Amendment agreed to.
Government amendment No. 17:
In page 21, lines 4 and 5, to delete "a report under this section," and substitute "an annual report submitted under subsection (1),".
Amendment agreed to.
Government amendment No. 18:
In page 21, between lines 9 and 10, to insert the following:
"(8) The Minister may, if he or she considers it appropriate to do so, cause a copy of a report submitted under subsection (3)—
(a) to be laid before each House of the Oireachtas, and
(b) where paragraph (a) has been complied with, published in such form and manner as he or she considers appropriate.".
Amendment agreed to.
Government amendment No. 19:
In page 22, to delete lines 22 to 27 and substitute the following:
"(1) The Director shall, at the request in writing of a Committee, attend before it to give account for the general administration of the Insolvency Service as is required by the Committee and, for that purpose, shall provide the Committee with such information (including documents) as it specifies and as is in the possession of, or is available to, the Director.".
Amendment agreed to.
Amendments Nos. 20 and 27 are related and will be discussed together.
Government amendment No. 20:
In page 2 of the list of amendments made in Committee, to delete the text inserted by amendment no. 5 and substitute the following:
23.—(1) The Insolvency Service shall, for the purposes of sections 24, 60(4) and 95(4) and section 85D (as inserted by section 146) of the Bankruptcy Act 1988, prepare and issue guidelines as to what constitutes a reasonable standard of living and reasonable living expenses.
(2) Before issuing guidelines under subsection (1), the Insolvency Service shall consult with the Minister, the Minister for Finance, the Minister for Social Protection and such other persons or bodies as the Insolvency Service considers appropriate or as the Minister may direct.
(3) In preparing guidelines to be issued under subsection (1), the Insolvency Service shall have regard to—
(a) such measures and indicators of poverty set out in Government policy publications on poverty and social inclusion as the Insolvency Service considers appropriate,
(b) such official statistics (within the meaning of the Statistics Act 1993) and the surveys relating to household income and expenditure published by the Central Statistics Office as the Insolvency Service considers appropriate,
(c) the Consumer Price Index (All Items) published by the Central Statistics Office or any equivalent index published from time to time by that Office,
(d) such other information as the Insolvency Services considers appropriate for the performance of its functions under this section,
(e) differences in the size and composition of households, and the differing needs of persons, having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability, and
(f) the need to facilitate the social inclusion of debtors and their dependants, and their active participation in economic activity in the State.
(4) Guidelines issued under subsection (1) may provide examples of—
(a) expenses that may be allowed as reasonable living expenses, and
(b) expenses that may not be allowed as reasonable living expenses.
(5) The Insolvency Service shall make guidelines issued under subsection (1) available to members of the public on its website.
(6) Subject to subsection (7), the Insolvency Service shall issue guidelines under subsection (1) at intervals of such length, not being more than one year, as it considers appropriate.
(7) Failure by the Insolvency Service to comply with subsection (6) shall not render invalid for the purposes of this Act the guidelines most recently issued by it under this section.".
Amendment No. 20 is designed to recast and improve the new section 23 inserted by amendment No. 5 on Committee Stage taking account of matters raised by Senators during the course of the debate. The title and text of the section have been expanded to include the term "reasonable standard of living". In her contribution on Committee Stage, Senator Zappone suggested that perhaps the insolvency service should also have regard to other information or research from sources such as academic studies when compiling the guidelines on a reasonable standard of living and reasonable living expenses for debtors. I was happy to take on board her comments and have reflected them in the provisions of subsection (3)(d). Subsection (3)(e) has also been improved upon and now references a broader range of matters which are required to be taken into consideration with regard to differences in the size and composition of households and the differing needs of persons having regard to matters such as their age, health and whether they have a physical, sensory, mental health or intellectual disability.
Amendment No. 27 arises as a consequence of the changes to the new section 23 concerning guidelines on reasonable living expenses. This is a technical amendment which revises the wording of the new section 24(14) inserted by amendment No. 13 on Committee Stage to reflect the changes made to the section to ensure consistency of approach.
I thank the Minister for taking on board the views expressed in this House with regard to amendment No. 20, which is very similar to amendments we tabled on Committee Stage. As the Minister put it, we sought to recast the section on reasonable household expenses to which people are entitled and which are necessary to maintain a reasonable standard of living for the debtor and his or her dependents. Our problem previously was that it was not entirely clear what this would constitute. In previous discussions on this the Minister made the point it was up to the intermediary of the dispute resolution mechanism, which would be most likely MABS, to lay down the criteria. Our view is that we, as legislators, should do this as best we can. In examining the detail of amendment No. 20 I certainly think it has met the requirements put forward by me, Senator Zappone and others in this respect. I fully support amendment No. 20 and thank the Minister for agreeing to it.
Amendment agreed to.
Government amendment No. 21:
In page 24, between lines 10 and 11, but in Part 2, to insert the following:
24.—Nothing in this Act shall be construed as preventing the Insolvency Service, in the performance of its functions under this Act, from sending or receiving documents or other information, or otherwise communicating, by electronic means.".
Amendment agreed to.
Government amendment No. 22:
In page 26, to delete lines 25 to 29 and substitute the following:
"(g) has not, during the period of 2 years ending on the application date—
(i) entered into a transaction with a person at an undervalue that has materially contributed to the debtor’s inability to pay his or her debts (other than any debts due to the person with whom the debtor entered the transaction at an undervalue), or
(ii) given a preference to a person that has had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference);".
Amendment agreed to.
Amendment No. 23 arises out of Committee Stage proceedings. Amendments Nos. 23 and 24 are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 23:
In page 27, between lines 31 and 32, to insert the following:
"(ii) one item of personal jewellery to a value not exceeding €750 or such other value as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a);".
These amendments speak for themselves and I presume the Senators will welcome them. Senators will recall we had much excitement about ceremonial jewellery and other items, and we have provided for an increased value in this matter. We had lengthy discussions in the other Chamber and here on up to what value of motor vehicles should be excluded. I have been persuaded by Deputies and Senators that we should revise the amount, which is now reasonable in the context of what we seek to achieve. I hope Senators welcome these amendments.
We welcome these amendments with regard to jewellery and increasing the value of the car from €1,200 to €2,000. We sought a figure of €3,000 but we welcome this as a step forward. The Minister has taken a very sensible and pragmatic approach.
We appreciate the fact that the Minister listened to us. We have had a very good debate in the House on the Bill. There are many aspects of the Bill which my party does not support but it is very refreshing to see a Minister come to the House, listen to what people say, take on board their views and come back on Report Stage with amendments which reflect the Committee Stage amendments genuinely tabled by Senators. I commend the Minister for this and support the Government amendments which have been tabled.
Jewellery is a personal item and does not have to have a ceremonial context.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 24:
In page 27, line 35, to delete "€1,200 or less" and substitute the following:
"€2,000 or less, or is worth such other amount as the Minister may prescribe, where the cost of purchase of that item is not included in the qualifying debts of the debtor for the purposes of subsection (2)(a)".
Amendment agreed to.
Government amendment No. 25:
In page 28, to delete lines 4 to 7 and substitute the following:
"(iv) any interest in or entitlement under a relevant pension arrangement unless subsection (14) applies.".
Amendment agreed to.
Government amendment No. 26:
In page 28, to delete lines 29 to 47 and in page 29, to delete lines 1 to 5.
Amendment agreed to.
Government amendment No. 27:
In page 4 of the list of amendments made in Committee, to delete the text inserted by amendment no. 13 and substitute the following:
"(14) In determining what constitutes reasonable living expenses or a reasonable standard of living for the purposes of this section, regard shall be had to guidelines issued under section 23.".
Government amendment No. 28:
In page 30, between lines 11 and 12, to insert the following:
“(14) Where this subsection applies and a debtor has an interest in or entitlement under a relevant pension arrangement which would, if the debtor performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income,
in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that debtor shall be considered as being in receipt of such income or amount of money.
(15) Subsection (14) applies where the debtor—
(a) is entitled at the date of the making of the application for a Debt Relief Notice,
(b) was entitled at any time before the date of the making of the application for a Debt Relief Notice, or
(c) will become entitled within 6 months of the date of the making of the application for a Debt Relief Notice,
to perform the act or exercise the option referred to in subsection (14).”.
Amendment agreed to.
Amendments Nos. 29, 29a, 35 to 37, inclusive, 40, 41, 125 and 134 are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 29:
In page 5 of the list of amendments made in Committee, to delete the text inserted by amendment no. 15 and substitute the following:
“(9) Where an approved intermediary resigns from the role of approved intermediary as respects a debtor, he or she shall notify the Insolvency Service of that fact, which notification shall be accompanied by a statement of the reasons for his or her resignation.
(10) Where, at any time during the Debt Relief Notice process after the debtor has made the confirmation referred to in subsection (3), the approved intermediary concerned (“original approved intermediary”)—
(a) dies,
(b) becomes incapable, through ill-health or otherwise, of performing the functions of an approved intermediary as respects the debtor,
(c) resigns from the role of approved intermediary as respects the debtor, or
(d) is no longer entitled to perform the functions of an approved intermediary under this Act,
the debtor shall, as soon as practicable after becoming aware of that fact, appoint another approved intermediary to act as his or her approved intermediary for the purposes of this Chapter.
(11) (a) Where paragraph (a), (b) or (c) of subsection (10) applies, the debtor concerned shall, as soon as practicable, inform the Insolvency Service of that fact.
(b) Where an approved intermediary has been appointed under subsection (10), the approved intermediary shall, as soon as practicable, inform the Insolvency Service and the creditors concerned of that fact.".
Amendment No. 29 replaces amendment No. 15 made on Committee Stage in response to suggestions by Senators that the various notification and reporting requirements with regard to an approved intermediary dying or becoming otherwise incapacitated should be better clarified. The Parliamentary Counsel has now provided an updated text to do so. Amendment No. 29a on the supplemental list is necessary to amend a cross-reference in section 25(11). The amendment is required as a consequence to the amendment to that section regarding the replacement of an approved intermediary.
Amendment No. 35 is a technical amendment. It amends the existing provision to now employer the Insolvency Service to prescribe the criteria for authorisation of persons as authorised intermediaries. The provision states that the service will act under the direction of the Minister and is subject to certain conditions regarding consultation with other persons or bodies. Both amendments Nos. 36 and 37 essentially seek the same outcome that the authorisation of a person to act as an approved intermediary may be withdrawn, as provided for in regulations, when they no longer meet the criteria. I hope that my proposal satisfies the Senators and they may wish to withdraw their amendment.
Amendment No. 40 replaces the text of section 46(4) to (9), inserted by amendment No. 26 on Committee Stage, to refine the provisions in regard to the notifications at reporting responsibilities on the personal insolvency practitioner in the event of death or incapacity, etc. This amendment is similar to that earlier, being amendment No. 31, in respect of the same requirements on approved intermediaries. Amendments Nos. 41, 125 and 134 are technical drafting amendments simply to further refine the text.
I commend the Minister for taking on board the views expressed in the Lower House and this House in respect of amendments Nos. 36 and 37. I will withdraw amendment No. 36 because amendment No. 37 does the same thing but is better drafted legislatively. It was tabled to ensure that there was power to remove intermediaries in situations where necessary but the Bill had not provided for same. Again my party commends the Minister for listening to our comments. I withdraw amendment No. 36 and support the Government amendment No. 37.
Amendment agreed to.
Government amendment No. 29a:
In page 32, lines 4 and 5, to delete “subsection (9)” and substitute “subsection (10)#”.
Amendment agreed to.
Amendments Nos. 30, 31, 38, 44 to 47, inclusive, 73 and 76 to 79, inclusive, are related and may be discussed together.
Government amendment No. 30:
In page 32, line 31, to delete “section 25;” and substitute the following:
“section 25 and a statutory declaration made by the debtor confirming that the statement is a complete and accurate statement of the debtor’s assets, liabilities, income and expenditure;”.
Amendment No. 30 is a drafting amendment to extend the reference to section 25 and a statutory declaration to that made by the debtor. Amendment No. 31 replaces the text inserted by amendment No. 17 on Committee Stage and is to correctly refer to a "permitted debt" in subparagraph (iii). It is recommended by Parliamentary Counsel. Amendment No. 38 is essentially a drafting amendment to remove the reference in section 46(l)(a)(iv) to guarantees in respect of the debtor's own debts which are not required in this context. The amendment replaces the text inserted by amendment No. 25 on Committee Stage.
Amendment No. 44
is required for the avoidance of doubt. I am advised that while the Bill now contains in section 2, a definition of "excluded debt", a clear provision to the effect that an excluded debt cannot be proposed for consideration in a debt settlement arrangement is still required. Amendment No. 45
inserts a new subsection (3) in section 53 which replicates the requirement in the debt relief notice that the proposal for a debt settlement arrangement should also primarily concern debts which are in default for a period of more than sis months prior to the application.
Amendment No. 46
replaces Amendment No. 27 inserted on Committee Stage. The essential change is in subsection (8) which makes it explicit that a permitted debt refers to an excludable debt where the creditor has consented to include it for consideration in the debt settlement arrangement. The Parliamentary Counsel decided that the replacement of the entire section was the optimum approach. Amendment No. 47 extends the provisions of subparagraphs (i) and (ii) of section 54(2)(e) with new text which now provides that the schedule of debts and creditors should also contain any other information that may be prescribed.
Amendment No.
73 is required for the avoidance of doubt. I am advised by the Parliamentary Counsel that while the Bill now contains a definition in section 2 of "excluded debt", clear provisions to the effect that an excluded debt cannot be included in a personal insolvency arrangement are still required. This is similar the amendment made to the debt settlement arrangement. Amendment No. 76 removes the requirement for the debtor to make a statutory declaration in support of his or her application for a personal insolvency arrangement and replaces it with a declaration in writing. Amendment No.
77 inserts a new subsection (5) and replicates in the personal insolvency arrangement the requirement in the debt relief notice and debt settlement arrangement that the proposal should also concern primarily debts which are in default for a period of more than six months prior to application.
Amendment No.
78 is designed to further refine the new provision concerning the requirement for creditor consent for the inclusion of excludable debt in personal insolvency arrangement. On the advice of Parliamentary Counsel, it is more coherent to replace the entire section. Amendment No. 79
replaces subparagraphs (i) and (ii) of section 89(2)(e) with new text which now provides that the schedule of debts and creditors should also contain any other information that may be prescribed.
I wish to speak again about amendment No. 75. We had some discussion on Committee Stage in respect of the amendment. It states: "In page 76, line 47, to delete €3,000,000 and substitute €1,000,000". As the Minister will know, the amendment refers to the criteria for a personal insolvency arrangement. My party believes that the current ceiling is too high and too loose. We want it set at €1 million and not €3 million.
Is the Senator referring to amendment No. 75?
I am sorry but the amendment is not included in this group of amendments.
I apologise for jumping ahead. Is it the next amendment?
I was ahead of myself and overcome with excitement dealing with the jewellery matter and now the Senator is ahead of himself with regard to this amendment.
I apologise for reading the list of grouped amendments incorrectly. I thought we were dealing with amendments Nos. 73 to 79, inclusive, but it is amendments Nos. 76 to 79, inclusive.
Amendment agreed to.
Government amendment No. 31:
In page 6 of the list of amendments made in Committee, to delete the text inserted by amendment no. 17 and substitute the following:
“(i) the amount of each debt due to that creditor,
(ii) whether the creditor concerned is a secured creditor and, if so, the details of any security held in respect of the debt concerned, and
(iii) where the debt is an excludable debt, whether that debt is a permitted debt within the meaning of section 26;”.
Amendment agreed to.
Amendments Nos. 32 and 33 are related and may be discussed together.
Government amendment No. 32:
In page 37, line 18, after “debtor,” to insert “other than a security agreement,”.
Amendments No. 32 and 33 are technical drafting amendments to improve the presentation of the Bill and are recommended by Parliamentary Counsel.
Amendment agreed to.
Government amendment No. 33:
In page 37, lines 22 and 23, to delete “, or a forfeiture of a term,”.
Amendment agreed to.
Government amendment No. 34:
In page 7 of the list of amendments made in Committee, to delete the text inserted by amendment no. 21 and substitute the following:
“(3) Subject to subsections (4) and (5), a specified debtor whose income increases by €400 or more per month during the supervision period concerned shall surrender to the Insolvency Service 50 per cent of that increase.
(4) The reference in subsection (3) to a specified debtor’s income is a reference to his or her income as stated in the information provided, or documents submitted by him or her, or on his or her behalf, under section 26, less the following deductions (where applicable):
(a) income tax;
(b) social insurance contributions;
(c) payments made by him or her in respect of excluded debts;
(d) payments made by him or her in respect of excludable debts that are not permitted debts;
(e) such other levies and charges on the specified debtor’s income as may be prescribed.”.
Amendment No. 34 is a drafting change recommended by Parliamentary Counsel to improve the text of the relevant subsections of section 33 which amendment No. 21 inserted on Committee Stage.
Government amendment No. 37:
In page 44, between lines 16 and 17, to insert the following:
“(6) Regulations under subsection (5) may provide for the withdrawal of an authorisation of a person where he or she no longer meets the criteria for such an authorisation prescribed in those regulations.”.
Amendment agreed to.
Government amendment No. 35:
In page 44, line 9, to delete “The Minister may” and substitute the following:
“The Insolvency Service, with the consent of the Minister, may and, if directed by the Minister to do so and in accordance with the terms of the direction, shall, following consultation with any other person or body as the Insolvency Service thinks appropriate or as the Minister directs,”.
Amendment agreed to.
Amendment No. 36 not moved.
Amendment agreed to.
Government amendment No. 38:
In page 9 of the list of amendments made in Committee, to delete the text inserted by amendment no. 25 and substitute the following:
“46.—(1) A debtor to whom section 45 applies shall submit to a personal insolvency practitioner a written statement disclosing all of the debtor’s financial affairs, which statement shall include—
(a) such information as may be prescribed in relation to—
(i) his or her creditors,
(ii) his or her debts and other liabilities,
(iii) his or her assets, and
(iv) guarantees (if any) given by the debtor in respect of a debt of another person, and
(b) such other financial information as may be prescribed.”.
Amendment agreed to.
Amendments Nos. 39 and 43 are related and may be discussed together by agreement.
Government amendment No. 39:
In page 44, line 43, after “arrangement,” to insert the following:
“which advice the personal insolvency practitioner shall confirm in writing to the debtor,”.
Amendment No. 39 is a technical drafting amendment to further refine the text to include reference to the provision of the advice in writing. The purpose of amendment No. 43 is to make clear that where the advice of a personal insolvency practitioner under section 48(1) is that the debtor should not make a proposal for, or enter into, an arrangement, the personal insolvency practitioner is required to notify the insolvency service of that fact, and the appointment of the personal insolvency practitioner under section 46(3) shall come to an end.
Government amendment No. 41:
In page 45, line 41, to delete “subsection (5)” and substitute “subsection (7)”.
Government amendment No. 46:
In page 10 of the list of amendments made in Committee, to delete the text inserted by amendment no. 27 and substitute the following:
54.—(1) An excludable debt shall be included in a proposal for a Debt Settlement Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal.
(2) Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Debt Settlement Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by—
(a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and
(b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Debt Settlement Arrangement.
(3) Subject to subsection (6), a creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(4) Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Debt Settlement Arrangement.
(5) Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Debt Settlement Arrangement, that creditor shall be entitled to vote at any creditors’ meeting called to consider that proposal.
(6) Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 58(1) in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
(7) An excludable debt shall not be the subject of a Debt Settlement Arrangement unless it is a permitted debt.
(8) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.”.
Amendment agreed to.
Government amendment No. 40:
In page 9 of the list of amendments made in Committee, to delete the text inserted by amendment no. 26 and substitute the following:
“(4) On being appointed under subsection (3), the personal insolvency practitioner shall—
(a) confirm in writing to the debtor that the personal insolvency practitioner has consented to act in the role of personal insolvency practitioner as respects the debtor, and
(b) notify the Insolvency Service of his or her appointment.
(5) Where a personal insolvency practitioner is appointed under subsection (3), he or she shall stand appointed, and the debtor concerned shall not appoint another personal insolvency practitioner under that subsection, until such time as —
(a) the debtor concerned requests him or her to resign from the role of personal insolvency practitioner as respects the debtor, or
(b) the personal insolvency practitioner resigns from that role, on his or her own initiative.
(6) Where a personal insolvency practitioner resigns from the role of personal insolvency practitioner as respects a debtor, he or she shall notify the Insolvency Service of that fact, which notification shall be accompanied by a statement of the reasons for his or her resignation.
(7) Where a personal insolvency practitioner appointed under subsection (3) (“original personal insolvency practitioner”)—
(a) dies,
(b) becomes incapable, through ill-health or otherwise, of performing the functions of a personal insolvency practitioner as respects the debtor,
(c) resigns from the role of personal insolvency practitioner as respects the debtor, or
(d) is no longer entitled to perform the functions of a personal insolvency practitioner under this Act,
the debtor shall, as soon as practicable after becoming aware of that fact, appoint another personal insolvency practitioner to act as his or her personal insolvency practitioner for the purposes of Chapter 3 or 4, as the case may be.
(8) (a) Where paragraph (a), (b) or (c) of subsection (7) applies, the debtor concerned shall, as soon as practicable, inform the Insolvency Service of that fact.
(b) Where a personal insolvency practitioner has been appointed under subsection (7), the personal insolvency practitioner shall, as soon as practicable, inform the Insolvency Service and the creditors concerned of that fact.”.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 42:
In page 46, between lines 20 and 21, to insert the following:
48.—(1) Subject to subsection (4), in relation to Debt Settlement Arrangements and Personal Insolvency Arrangements, where a debtor has an interest in or an entitlement under a relevant pension arrangement, such interest or entitlement of the debtor shall not be treated as an asset of the debtor unless subsection (2) applies.
(2) Where this section applies and a debtor has an interest in or entitlement under a relevant pension arrangement which would, if the debtor performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income, in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that debtor shall be considered as being in receipt of such income or amount of money.
(3) Subsection (2) applies where the debtor—
(a) is entitled at the date of the making of the application for a protective certificate,
(b) was entitled at any time before the date of the making of the application for a protective certificate, or
(c) will become entitled within 6 years and 6 months of the date of the making of the application for a protective certificate in relation to a Debt Settlement Arrangement or within 7 years and 6 months of the date of the making of the application for a protective certificate in relation to a Personal Insolvency Arrangement,
to perform the act or exercise the option referred to in subsection (2).
(4) Nothing in subsections (1) to (3) shall remove the obligation of a debtor making an application for a protective certificate to make disclosure of any interest in or entitlement under a relevant pension arrangement in completing the Prescribed Financial Statement.”.
Amendment agreed to.
Government amendment No. 43:
In page 48, between lines 12 and 13, to insert the following:
“(5) Where the advice of a personal insolvency practitioner under subsection (1) is that the debtor should not make a proposal for, or enter into, an arrangement, the personal insolvency practitioner shall notify the Insolvency Service of that fact, and the appointment of the personal insolvency practitioner under section 46(3) shall come to an end.”.
Amendment agreed to.
Government amendment No. 44:
In page 49, between lines 9 and 10, to insert the following:
“(4) (a) A Debt Settlement Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt.
(b) A proposal for a Debt Settlement Arrangement shall not include any terms that, if contained in a Debt Settlement Arrangement that came into effect, would contravene paragraph (a).
(5) Unless otherwise expressly stated, a reference in this Chapter to a debt is a reference to an unsecured debt and a reference to a creditor is a reference to an unsecured creditor.”.
Amendment agreed to.
Government amendment No. 45:
In page 50, between lines 21 and 22, to insert the following:
“(3) A debtor shall not be eligible to make a proposal for a Debt Settlement Arrangement where 25 per cent or more of his or her debts (other than excluded debts and secured debts) were incurred during the period of 6 months ending on the date on which an application is made under section 54 for a protective certificate.”.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 47:
In page 50, to delete lines 39 to 44 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,
(ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and
(iii) such other information as may be prescribed;”.
Amendment agreed to.
Amendments Nos. 48 to 51, inclusive, 55, 56, 80, 80a, 81 to 83, inclusive, 108 and 109 are related and may be discussed together.
Government amendment No. 48:
In page 54, to delete lines 9 to 45 and substitute the following:
“(1) Subject to subsections (3), (4), (5) and (8), a creditor to whom notice of the issue of a protective certificate has been given shall not, whilst the protective certificate remains in force, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor holds security over the goods;
(f) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor;
(g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.
(2) Whilst a protective certificate remains in force, no bankruptcy petition relating to the debtor—
(a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt,
(b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
(3) Without prejudice to subsections (1) and (2), and subject to section 63, whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Debt Settlement Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.”.
Amendment No. 48 replaces the current subsections (1) to (3) of section 57 to better clarify the effect of the issuance of a protective certificate in a debt settlement arrangement. Subsection (1) is now made subject additionally to the provisions of subsections (5) and (8). Amendment No. 49 is linked to the previous amendment and inserts new subsection (8) to the effect that a secured debt is not affected by the protective certificate. Amendment No. 50 is a technical drafting amendment to improve the presentation of the Bill.
Amendment No. 51 is also required to improve on the current construction of section 59(1) to make it consistent with the similar section 94 in relation to the personal insolvency arrangement process. It also includes a new provision at paragraph (c) which requires the personal insolvency practitioner to make a proposal for a debt settlement arrangement in addition to inviting submissions from creditors. Amendment No. 52 is a technical amendment to delete the reference to section 78. Amendment No. 55 refines the text in relation to the effect of the protective certificate on creditors. Amendment No. 56 inserts a new subsection which clarifies the position in regard to creditor action against another person who may have guaranteed the specified debts concerned.
Amendment No. 80 arises from Committee Stage proceedings, where amendments were made to the Bill in regard to the protective certificate process. The purpose of this further amendment is to better set out the effect of the protective certificate. The purpose of amendment No. 80a is to delete section 94(2)(viii) which is now redundant, following the Committee Stage amendments regarding exclude and excludable debts. Amendment No. 81 is a technical drafting amendment required for consistency with the terminology used elsewhere in the Bill.
Amendment No. 82 is a technical drafting amendment which is required as a consequence of the insertion of a new paragraph (c) in section 94(1). Amendment No. 83 is a technical drafting amendment which is required as a consequence of the insertion of a new paragraph (c) in section 94(1). It mirrors the amendment proposed to section 59, the debt settlement arrangement in regard to including a requirement on the personal insolvency practitioner.
Amendment No. 108 refines the text in regard to the effect of the protective certificate on creditors and amendment No 109 inserts a new subsection which clarifies the position in relation to creditor action against another person who may have guaranteed the specified debts concerned.
Government amendment No. 50:
In page 55, line 36, to delete “failing to give such direction” and substitute“not making such an order”.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 49:
In page 55, to delete lines 21 and 22 and substitute the following:
“(8) A secured debt shall not be subject to or affected by a protective certificate under this Chapter.”.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 51:
In page 56, to delete lines 3 to 19 and substitute the following:
“(1) Where a protective certificate has been issued, the personal insolvency practitioner shall as soon as practicable thereafter—
(a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Debt Settlement Arrangement and, subject to section 62(2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement,
(b) consider any submissions made by creditors in accordance with paragraph (a) regarding the debts and the manner in which the debts might be dealt with as part of a Debt Settlement Arrangement, including any submission made by a creditor with respect to previous or existing offers of arrangements made by the creditor to or with the debtor, and
(c) make a proposal for a Debt Settlement Arrangement in respect of the debts concerned.”.
Amendments Nos. 52, 58a, 59, 59a, 60, 112a, 112b, 112c, 112d are related and may be discussed together.
Government amendment No. 52:
In page 56, line 29, to delete “section 67, 77 or 78” and substitute “section 67 or 77”.
Amendment No. 52 is consequential on amendment No. 60, which will delete section 78. This section provided for the process of termination of a debt settlement arrangement by a meeting of creditors on foot essentially of a material change in the debtor's circumstances in the opinion of the personal insolvency practitioner or that the debtor participated knowing that he did not fulfil the eligibility criteria. On further reflection with the Office of the Attorney General, the Parliamentary Counsel proposed that the section be deleted on the basis that it is not particularly required in light of the provisions of section 79, which required the involvement of the court. There is no comparable provision in the personal insolvency arrangement.
Amendments Nos. 58a and 112a are required to ensure consistency between the DSA and PIA provisions of the Bill in regard to the variation of the arrangement. This amendment addresses an inconsistency between section 79 concerning the debtor's consent to a variation of a debt settlement arrangement to the corresponding section 115 concerning consent to the variation of a personal insolvency arrangement.
Amendment No. 59 seeks to deal with an issue raised on Committee Stage. The amendment will remove the discretion previously afforded to the personal insolvency practitioner in regard to the calling of a creditors meeting to consider a possible variation on debt settlement arrangement.
Amendments Nos. 59a, 112b, 112c and 112d aim to clarify the procedures for voting by creditors on a proposed variation of a debt settlement arrangement or a personal insolvency arrangement.
I thank the Minister for accepting our amendment No. 59 and for removing the discretion of the personal insolvency practitioner. The previous wording, at section 77(2) on page 70 stated:
Where it appears to the personal insolvency practitioner concerned that there has been a material change in the debtor’s circumstances which would affect his or her ability to make repayments under the Debt Settlement Arrangement, the personal insolvency practitioner (whether on his or her own initiative or at the request of a creditor) may call a meeting of creditors to be held in accordance with this section.
The amendment calls for the word "may" to be replaced by "shall" and as the Minister said, removes the discretion of the personal insolvency practitioner and ensures that it does happen, which is I think good practice. I commend the Minister for accepting the amendment.
Amendment agreed to.
Amendments Nos. 52a, 105a, 106a are related and may be discussed together.
Government amendment No. 52a:
In page 64, to delete lines 28 to 30 and substitute the following:
“(2) The voting rights exercisable by a creditor at a creditors’ meeting shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.”.
Amendment No. 52a on the supplementary list clarified the voting rights exercisable by a creditor at a meeting of creditors to approve a debt settlement arrangement that they are in proportion to the amount rather than the value of the debt due to the creditor on the day the protective certificate is issued. This is a better expression of the likely situation.
Amendment No. 105a replaces and extends the current section 104 so as to set out in a clearer fashion all of the relevant factors in regard to the termination and exercise of voting rights at creditors meetings in regard to the personal insolvency arrangement. Amendment No. 105b replaces the current text of section 106 with regard to the proportion of creditors required to approve a personal insolvency arrangement. The section has been shortened to reflect the key point, that is, the percentage of votes in total in the
secured and unsecured classes.
Previous parts of the section have been relocated to the revised section 104.
Amendment agreed to.
Amendment Nos. 53 and 106 are related and may be discussed together.
Government amendment No. 53:
In page 66, to delete lines 23 to 47 and in page 67, to delete lines 1 to 5 and substitute the following:
“(1) Where—
(a) no objection is lodged by a creditor with the appropriate court within 14 days of the giving of the notice referred to in section 70, or
(b) an objection is lodged with the appropriate court and the matter is determined by the court on the basis that the objection should not be allowed, the appropriate court shall proceed to consider, in accordance with this section,whether to approve the coming into effect of the Debt Settlement Arrangement.
(2) For the purposes of its consideration under subsection (1), the appropriate court shall consider the copy of the Debt Settlement Arrangement furnished to it under section 71(1) and, subject to subsection (3)—
(a) shall approve the coming into effect of the Arrangement, if satisfied that the—
(i) eligibility criteria specified in section 53 have been satisfied,
(ii) mandatory requirements referred to in section 60(2) have been complied with,
(iii) Debt Settlement Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than a permitted debt) or a secured debt or otherwise affect such a debt, and
(iv) requisite percentage of creditors referred to in section 68(9) has approved the proposal for a Debt Settlement Arrangement, and
(b) if not so satisfied, shall refuse to approve the coming into effect of the Debt Settlement Arrangement.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) For the purposes of subsection (2), the court may accept—
(a) a certificate issued by the Insolvency Service certifying that the eligibility criteria specified in section 53 have been satisfied as evidence that such eligibility criteria have been satisfied, and
(b) the certificate issued by the personal insolvency practitioner concerned pursuant to section 70(1) as evidence that the requisite percentage of creditors referred to in section 68(9) has approved the proposal for a Debt Settlement Arrangement.
(6) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) approves or refuses to approve the coming into effect of the Debt Settlement Arrangement under this section, or
(b) decides to hold a hearing referred to in subsection (3).
(7) On receipt of a notification under subsection (6) of the approval of the coming into effect of the Debt Settlement Arrangement, the Insolvency Service shall register the Debt Settlement Arrangement in the Register of Debt Settlement Arrangements.”.
Amendment No. 53 replaces the text of the current section 73 in respect of the consideration by a court in the insolvency service in regard to the eligibility criteria on the coming into effect of a debt settlement arrangement with clearer text to improve the comprehension of the section.
Amendment No. 106 replaces the current section 111, concerning the coming into effect of a personal insolvency arrangement, with the assistance of Parliamentary Counsel. The text, while not altered substantially, is presented in a more coherent fashion with regard to the satisfaction of the eligibility criteria and the insolvency service and the court.
Amendment agreed to.
Amendments Nos. 54 and 57 are related and may be discussed together.
Government amendment No. 54:
In page 67, lines 19 to 21, to delete all words from and including “concerned,” in line 19 down to and including “Arrangement.” in line 21 and substitute “concerned.”.
These are technical drafting amendments to improve the presentation of the Bill.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 55:
In page 67, to delete lines 22 to 43 and substitute the following:
“(3) Where a Debt Settlement Arrangement is in effect, a creditor who is bound by it shall not, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to recover goods in the possession or custody of the debtor, unless title to the goods is vested in the creditor or the creditor has security over the goods;
(f) contact the debtor regarding payment of the specified debt otherwise than at the request of the debtor;
(g) in relation to an agreement with the debtor, other than a security agreement, by reason only that the debtor is insolvent or that a Debt Settlement Arrangement is in effect—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.”.
Government amendment No. 56:
In page 68, between lines 28 and 29, to insert the following:
“(10) Notwithstanding subsections (3) and (4), the fact that a Debt Settlement Arrangement is in effect in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) or (4) as respects another person who has guaranteed the specified debts concerned.”.
Amendment agreed to.
Amendments Nos. 57 and 110 are related and may be discussed together.
Government amendment No. 57:
In page 69, line 2, after “has” to insert “defaulted”.
Amendments Nos. 57 and 110 are technical drafting amendments to clarify the references to default by the debtor in sections 76 and 130.
Amendment agreed to.
Amendments Nos. 58 and 111 are related and may be discussed together.
Government amendment No. 58:
In page 69, line 32, after “made” to insert the following:
“under this Act and in accordance with the Debt Settlement Arrangement”.
These are technical drafting amendments to improve the presentation of the Bill.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 58a:
In page 70, between lines 23 and 24, to insert the following:
“(2) The debtor’s written consent shall be required to any variation of a Debt Settlement Arrangement provided that any unreasonable refusal by the debtor to consent to a variation shall be subject to challenge in accordance with section 84.
(3) A debtor shall be considered to be acting reasonably where the debtor refuses to consent to a variation of a Debt Settlement Arrangement where that variation would require the debtor—
(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:
(i) income tax;
(ii) social insurance contributions;
(iii) payments made by him or her in respect of excluded debts;
(iv) payments made by him or her in respect of excludable debts that are not permitted debts;
(v) such other levies and charges on income as may be prescribed,
or
(b) to make a payment amounting to more than 50 per cent of the value of any property acquired by the debtor after the coming into effect of the Debt Settlement Arrangement unless receipt of that property had been anticipated by the terms of that arrangement.”.
Amendment agreed to.
Government amendment No. 59:
In page 70, line 29, to delete “may” and substitute “shall”.
Amendment agreed to.
Government amendment No. 59a:
In page 71, to delete lines 1 to 3 and substitute the following:
“(6) For the purposes of subsection (5), the voting rights exercisable by a creditor at a creditors’ meeting under this section shall be proportionate to the amount of the debt due by the debtor to the creditor on the date on which the vote takes place.”.
Government amendment No. 60:
In page 71, to delete lines 26 to 45 and in page 72, to delete lines 1 to 20.
Amendment agreed to.
Amendments Nos. 61 to 63, inclusive, 67, 68 and 113 are related and may be discussed together.
Government amendment No. 61:
In page 72, line 21, to delete “A creditor” and substitute “Without prejudice to section 84, a creditor”.
Amendments Nos. 61 and 67 are technical drafting amendments to insert necessary cross-references to sections 79 and 84.
Amendment No. 62 clarifies the context of the court's consideration for the application of termination of a debt settlement arrangement and at what point in time the eligibility criteria were not met.
Amendment No. 63 is a technical drafting amendment to improve the presentation of the Bill.
Amendments Nos. 68 and 113 are technical drafting amendments to sections 84 and 116 to make it clear that a creditor may only challenge a debt settlement arrangement or a personal insolvency arrangement on the grounds that the debtor has committed an offence, if the offence in question has caused a material detriment to the creditor.
Amendment agreed to.
Government amendment No. 62:
In page 72, to delete lines 29 to 31 and substitute the following:
“(b) the debtor, when the Debt Settlement Arrangement was proposed, did not satisfy the eligibility criteria specified in section 53;”.
Amendment agreed to.
Government amendment No. 63:
In page 72, line 42, before “have” to insert “to”.
Amendment agreed to.
Amendments Nos. 64, 118 and 120 are related and may be discussed together.
Government amendment No. 64:
In page 73, to delete lines 9 and 10 and substitute the following:
“(b) at no time during that 3 month period were any obligations in respect of those payments discharged.”.
Amendments Nos. 64 and 120 provide for a clear expression of what constitutes a period of arrears for the purposes of an application to the court by a creditor or personal insolvency practitioner for termination of a debt settlement arrangement or personal insolvency arrangement on the grounds that the debtor is in arrears with his or her payments for at least three months.
The purpose of amendment No. 120 is to define in section 118 when a six-month arrears default takes place. The new subsection reflects the text of section 80(3) which defines a six-month arrears period for the purposes of a debt settlement arrangement.
Amendment agreed to.
Amendments Nos. 65, 97a and 119 are related and may be discussed together.
Government amendment No. 65:
In page 73, line 21, after “Service” to insert “and the debtor”.
Amendment No. 65 is a drafting amendment and has been recommended by the Parliamentary Counsel to improve the text. It will ensure that the debtor will also be given notice by the personal insolvency practitioner of the termination of a personal insolvency arrangement due to a six-month arrears default.
The purpose of amendment No. 97a is to improve the clarity of section 101 which outlines the framework for the determination of the value of security in respect of secured debt in a personal insolvency arrangement.
I propose to withdraw amendments Nos. 98 to 105, inclusive, which have been incorporated into the replacement section 101 that is proposed to be inserted by amendment No. 97a.
Amendment No. 119 is a drafting amendment recommended by the Parliamentary Counsel to improve the text.
Amendment agreed to.
Amendments Nos. 65a and 120a are related and may be discussed together.
Government amendment No. 65a:
In page 73, line 36, to delete "has been deemed to come to an end, has failed" and substitute "has been deemed to have failed".
These are technical drafting amendments to improve the text of the Bill.
Amendment agreed to.
Amendments Nos. 66, 137 to 142, inclusive, 142b, 143 to 148, inclusive, 148a and 153 are related and may be discussed together.
Government amendment No. 66:
In page 74, to delete lines 4 to 8.
I am withdrawing Report Stage amendments Nos. 149 to 152, inclusive, already furnished to the Bills Office. Amendment No. 66 proposes the deletion of section 82 which provides that terminated debt settlement arrangements under sections 78, 79 or 80 are to be deemed acts of bankruptcy. These are now listed in amendment No. 135 which inserts them into the appropriate section in the 1988 Bankruptcy Act.
Amendment No. 137 includes, in the relevant section 7 of the Bankruptcy Act 1988, a failed or terminated debt settlement arrangement or personal insolvency arrangement to the list of acts of bankruptcy.
Amendments Nos. 138 and 139 are technical drafting amendments to improve the text of the Bill.
Amendment No. 140 empowers the court to order the attendance of the debtor at the court hearing of the adjudication of the creditor's petition for his or her bankruptcy, and to make a full disclosure of assets and liabilities. This provision corrects a gap in the present legislation.
Amendment No. 141 is a technical drafting amendment to include a reference in section 139 in relation to section 15 of the Bankruptcy Act to add that the requirements of section 11 have been fulfilled.
Amendment No. 142 is a technical drafting amendment to improve the presentation of the Bill.
Amendment No. 142b on the supplementary list inserts a saver provision into the Bankruptcy Act to preserve any existing arrangements the bankrupts may have under that Act. Arrangements under the bankruptcy legislation are being ended in favour of the new debt resolution arrangements provided in this Bill.
Amendments Nos. 143 to 148, inclusive, are drafting amendments to improve the text by providing for the issue of a certificate of discharge or annulment in a bankruptcy and to make a necessary reference to a trustee in bankruptcy to the sections of the Bankruptcy Act 1988 concerned.
Amendment No. 148a substitutes and improves the current text of section 146, inserting section 85D to the Bankruptcy Act with regard to bankruptcy payment orders that may, if the debtor's circumstances permit, be sought. The court, in deciding on such orders, will have regard to the reasonable living expenses of the bankrupt and his or her dependants.
Amendment No. 153 updates the time period in section 123 of the Bankruptcy Act in regard to potentially fraudulent actions from the present 12 months to the now standard period in this Bill of three years.
Government amendment No. 72:
In page 75, between lines 26 and 27, to insert the following:
85.—(1) Where, as respects a debtor who has entered into a Debt Settlement Arrangement which is in force, a creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement, the creditor or personal insolvency practitioner may make an application to the appropriate court for relief in accordance with this section.
(2) The reference to the debtor having made contributions to a relevant pension arrangement shall be construed as a reference to contributions made by the debtor at any time within 3 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54.
(3) Where the appropriate court considers that having regard in particular to the matters referred to in subsection (4) the contributions to a relevant pension arrangement were excessive it may:
(a) direct that such part of the contribution concerned (less any tax required to be deducted) be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution amongst the creditors of the debtor, and
(b) make such other order as the court deems appropriate, including an order as to the costs of the application.
(4) The matters referred to in subsection (3) as respects the contributions made by the debtor to a relevant pension arrangement are:
(a) whether the debtor made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the debtor made the contribution concerned;
(b) whether the debtor was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the debtor or a person who as respects the debtor is a connected person could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the debtor in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54 including the percentage of total income of the debtor concerned which such contributions represent in each of those years;
(e) the age of the debtor at the relevant times;
(f) the percentage limits which applied to the debtor in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 54; and
(g) the extent of provision made by the debtor in relation to any relevant pension arrangement prior to the making of the contributions concerned.”.
Amendment agreed to.
Government amendment No. 67:
In page 74, line 23, after “are” to insert “, without prejudice to section 79,”.
Amendment agreed to.
Government amendment No. 68:
In page 74, line 42, to delete “Act” and substitute the following:
“Act, which causes a material detriment to the creditor”.
Amendment agreed to.
Government amendment No. 69:
In page 74, line 44, to delete “within the meaning of subsection (2)”.
Amendment agreed to.
Government amendment No. 70:
In page 75, to delete lines 1 to 5 and substitute the following:
“(h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).”.
Amendment agreed to.
Government amendment No. 71:
In page 75, to delete lines 6 to 26.
Amendment agreed to.
Amendment agreed to.
Amendments Nos. 72a and 135a are related and may be discussed together.
Government amendment No. 72a:
In page 75, to delete lines 29 to 39.
Amendment No. 72a which proposes the deletion of section 85, is consequential on the new review section inserted by Amendment No. 135a.
Amendment No. 135a revises the original review provision in regard to the operation of the Bill. That review, which will encompass the three new debt resolution processes in Part 3, will commence no later than three years after commencement and be completed within a year. However, as I said when we discussed this point on Committee Stage, the operation of the Bill will be subject to continuing and ongoing review. I have made it clear that I will swiftly intervene with amending legislation to make additional provision or to correct any error that arises from operational experience.
Amendment agreed to.
Government amendment No. 73:
In page 76, between lines 39 and 40, to insert the following:
“(6) (a) A Personal Insolvency Arrangement shall not contain any terms that would release the debtor from an excluded debt or otherwise affect such a debt.
(b) A proposal for a Personal Insolvency Arrangement shall not include any terms that, if contained in a Personal Insolvency Arrangement that came into effect, would contravene paragraph (a).”.
Amendment agreed to.
Amendments Nos. 74, 84 and 84a are related and may be discussed together.
I move amendment No. 74:
In page 76, between lines 39 and 40, to insert the following:
“(6) Once a Personal Insolvency Arrangement comes into effect, all interest on debts, which are the subject matter of the arrangement, shall cease to accrue and the creditor will be prevented from charging interest or the earning of interest during the term of the Personal Insolvency Arrangement.”.
We have tabled amendments Nos. 74 and 84 on foot of recommendations which were made by the Credit Union Development Association. I note that CUDA has been in contact with the Department. I would like to set out the logic for them and will then listen to the Minister's response. It does them justice to table the amendments and to elicit the Minister's response.
The repayments that debtors have entered into with their banks, which might be interest only, just serve the purpose of kicking the can down the road. The substantial capital sum still remains to be repaid, which is a serious problem currently facing many individuals and families.
In trying to address this issue, the Credit Union Development Association has proposed an amendment to the Department that once the creditor enters this process all interest on debts, which are the subject matter of the arrangement, shall cease to accrue. In addition, all creditors would be prevented from charging or earning interest.
Under section 98, a personal insolvency practitioner has the option to include in the arrangement, for the benefit of the secured creditor, that a debtor pays interest and only part capital under section 98a, or makes interest-only repayments under sections 98b and so on.
CUDA is of the view that a mechanism is needed to address the fact that a substantial sum still remains unpaid. While the practitioner has many options to choose from when drawing up a proposed arrangement, as a principle there should not be an option to allow the payment of interest during the arrangement, nor should interest accrue for the duration. That is what both amendments have the effect of doing.
CUDA is also concerned that credit unions, as small creditors, will not cope financially with the impact of the proposed legislation. While they agree there is a need for legislation, they believe there is an imbalance between the rights of a large secured creditor and a small unsecured creditor, such as a credit union. They argue that a situation should not arise whereby the capital of a credit union loan, which in effect is other people's money, that is, other members' money from that credit union, is sacrificed for the payment of interest on a secured debt to a large retail bank. This is the logic or rationale. I note the organisation has been in contact with the Department of Justice and Equality in this regard. While I am not privy to the response it received, I thought I should do it justice by tabling the amendments, listening to the Minister's response and deciding how to deal with the amendments thereafter.
Is there a seconder for the amendment? No.
Amendment No. 74 lapsed.
I move amendment No. 75:
In page 76, line 47, to delete “€3,000,000” and substitute “€1,000,000”.
I apologise but I was thrown by the other amendments requiring a seconder. As this is the one I dealt with prematurely earlier, I simply await the Minister's response.
Is there a seconder for amendment No. 75?
I will second it for debating purposes.
This is the issue that was dealt with previously, when I explained at some length the purpose of the personal insolvency arrangement. It provides a structure within which a debtor, with the assistance of a personal insolvency practitioner, can seek to enter into arrangements with creditors with regard to outstanding debts in circumstances in which a debtor clearly is unable to meet his or her liabilities. The Senator seeks to exclude any individual from the process whose debts exceed €1 million. I explained this is merely a mechanism to facilitate debt resolution and that there is no great advantage in this. While the perception has been created that this provision helps people who are rich, the reality is that it is a facility whereby if one's debts run to €3 million, one is in far greater financial difficulty than if they run to €1 million. This is a mechanism to ascertain whether arrangements can be entered into between debtors and creditors which, from the creditors' point of view, may, over a period of years, result in them recouping a greater share of the moneys due to them than they otherwise would recoup, were a debtor to go into bankruptcy.
Moreover, from the advantage perspective of the debtor, it creates the possibility that he or she may be allowed to continue to live in, own and occupy the family home of reasonable size, as opposed to a mansion, to use the phrase that suddenly has come into focus. The Senator simply is seeking to exclude the possibility of this mechanism being used by a range of people with a view to pushing them into bankruptcy if they are insolvent, where such a bankruptcy would be to the detriment of both the debtor and creditor and could affect someone who, perhaps through no fault of his or her own, has incurred large business debts, perhaps because others have defaulted on paying him or her. I do not see why such persons, if they are living in a modest home with their families, should be rendered homeless in a bankruptcy process.
I also have made the case previously that where someone is in serious debt and creditors are willing to enter into an arrangement with him or her, as the law currently stands, outside any structured process, that could happen regardless of the level of the debts. There could be €15 million or €20 million worth of debts and if agreement can be reached between debtors and creditors, they can effectively resolve issues. This provision allows the use of personal insolvency practitioners, the use of the personal insolvency arrangement structure and the possibility of orders being made by the court to copper-fasten or to approve an arrangement already approved by the insolvency service. In the context of an item of progressive legislation designed to assist people in difficulties, I regard the Senator's amendment to be regressive and lacking in understanding of the process. Consequently, for all those reasons, I am opposed to the amendment.
The Minister is being somewhat disingenuous with regard to the logic of this amendment. As I noted, Sinn Féin believes that the current ceiling is too high and too loose. This amendment is an attempt to avoid the facilitation of recklessness or the rewarding of irresponsible speculation. That is the logic of this amendment and while I acknowledge the Minister has a point with regard to the €3 million ceiling, Sinn Féin's point is this should not be the norm. The norm should be in the region of €1 million, which is the logic and purpose of the amendment. When dealing with these extremely difficult and complex situations, it is important that in so doing, Members do not end up inadvertently rewarding people who are irresponsible or who have acted in an irresponsible fashion. Sinn Féin is attempting, through this amendment, to deal with that issue.
I just do not understand how the Senator thinks there is any reward involved in this process, other than it facilitating debt resolution.
Government amendment No. 83:
In page 84, line 36, to delete “section 98.” and substitute the following:
“section 98,
and
(c) make a proposal for a Personal Insolvency Arrangement in respect of the debts concerned.”.
Amendment agreed to.
Question, "That the figure proposed to be deleted stand," put and declared carried.
Amendment declared lost.
Government amendment No. 76:
In page 77, line 18, to delete “statutory declaration” and substitute “declaration in writing”.
Amendment agreed to.
Government amendment No. 77:
In page 78, between lines 33 and 34, to insert the following:
“(5) A debtor shall not be eligible to make a proposal for a Personal Insolvency Arrangement where 25 per cent or more of his or her debts (other than excluded debts) were incurred during the period of 6 months ending on the date on which an application is made under section 89 for a protective certificate.”.
Amendment agreed to.
Government amendment No. 78:
In page 17 of the list of amendments made in Committee, to delete the text inserted by amendment no. 49, and to substitute the following:
89.—(1) An excludable debt shall be included in a proposal for a Personal Insolvency Arrangement only where the creditor concerned has consented, or is deemed to have consented, in accordance with this section, to the inclusion of that debt in such a proposal
(2) Where a personal insolvency practitioner proposes to include an excludable debt in a proposal for a Personal Insolvency Arrangement, he or she shall, without delay, notify the creditor concerned of that fact, which notification shall be accompanied by—
(a) such information about the debtor’s affairs (including his or her creditors, debts, liabilities, income and assets) as may be prescribed, and
(b) a request in writing that the creditor confirm, in writing, whether or not the creditor consents, for the purposes of this section, to the inclusion of the debt in a Personal Insolvency Arrangement.
(3) A creditor shall comply with a request under subsection (2)(b) within 21 days of receipt of the notification under that subsection.
(4) Where a creditor does not comply with subsection (3), the creditor shall be deemed to have consented to the inclusion of that debt in a proposal for a Personal Insolvency Arrangement.
(5) Where a creditor consents or is deemed to have consented, in accordance with this section, to the inclusion of an excludable debt in a proposal for a Personal Insolvency Arrangement, that creditor shall be entitled to vote at any creditors’ meeting called to consider that proposal.
(6) Where the debtor concerned is the subject of a protective certificate, and a creditor to whom this section applies brings an application under section 93(1) in respect of that protective certificate, the period referred to in subsection (3) shall not commence until the date on which the appropriate court determines the application.
(7) An excludable debt shall not be the subject of a Personal Insolvency Arrangement unless it is a permitted debt.
(8) In this Chapter, “permitted debt” means an excludable debt to which subsection (1) applies.”.
Amendment agreed to.
Government amendment No. 79:
In page 79, to delete lines 1 to 6 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,
(ii) whether, as respects the debt concerned, the creditor is a secured creditor and, if so, the nature of the security concerned, and
(iii) such other information as may be prescribed;”.
Amendment agreed to.
Government amendment No. 80:
In page 82, to delete lines 19 to 43 and in page 83, to delete lines 1 to 16 and substitute the following:
“(1) Subject to subsections (3), (4) and (5), a creditor to whom notice of the issue of a protective certificate has been given shall not, whilst the protective certificate remains in force, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to enforce security held by the creditor in connection with the specified debt;
(f) take any step to recover goods in the possession or custody of the debtor (whether or not title to the goods is vested in the creditor or the creditor has security over the goods);
(g) contact the debtor regarding payment of the specified debt, otherwise than at the request of the debtor;
(h) in relation to an agreement with the debtor, including a security agreement, by reason only that the debtor is insolvent or that the protective certificate has been issued—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.
(2) Whilst a protective certificate remains in force, no bankruptcy petition relating to the debtor—
(a) may be presented by a creditor to whom subsection (1) applies in respect of a specified debt,
(b) in a case where the petition has been presented by such a creditor in respect of a specified debt, may be proceeded with.
(3) Without prejudice to subsections (1) and (2), whilst a protective certificate remains in force, no other proceedings and no execution or other legal process in respect of a specified debt may be commenced or continued by a creditor to whom subsection (1) applies against the debtor or his or her property, except with the leave of the court and subject to any order the court may make to stay such proceedings, enforcement or execution for such period as the court deems appropriate pending the outcome of attempts to reach a Personal Insolvency Arrangement, but this subsection shall not operate to prohibit the commencement or continuation of any criminal proceedings against the debtor.”.
Amendment agreed to.
Government amendment No. 80a:
In page 83, to delete lines 36 and 37.
Amendment agreed to.
Government amendment No. 81:
In page 84, line 1, to delete “failing to give such direction” and substitute “not making such an order”.
Amendment agreed to.
Government amendment No. 82:
In page 84, to delete lines 17 to 27 and substitute the following:
“(1) Where a protective certificate has been issued, the personal insolvency practitioner shall as soon as practicable thereafter—
(a) give written notice to the creditors concerned that the personal insolvency practitioner has been appointed by the debtor for the purpose of making a proposal for a Personal Insolvency Settlement Arrangement and, subject to section 97(2), invite those creditors to make submissions to the personal insolvency practitioner regarding the debts concerned and the manner in which the debts might be dealt with as part of a Personal Insolvency Arrangement, and such notice shall be accompanied by the debtor’s completed Prescribed Financial Statement,”.
Amendment agreed to.
I move amendment No. 84:
In page 89, to delete lines 38 to 49 and in page 90, to delete lines 1 to 29 and substitute the following:
“(6) Without prejudice to the generality of section 96 or subsections (1) to (3) and subject to sections 99 to 101, and having regard to section 86(6), a Personal Insolvency Arrangement may include one or more of the following terms in relation to the secured debt:
(a) that the debtor pay only part of the capital amount of the secured debt to the secured creditor for a specified period of time which shall not exceed the duration of the Personal Insolvency Arrangement;
(b) that the period over which the secured debt was to be paid or the time or times at which the secured debt was to be repaid be extended by a specified period of time;
(c) that the secured debt payments due to be made by the debtor be deferred for a specified period of time which shall not exceed the duration of the Personal Insolvency Arrangement;
(d) that the principal sum due on the secured debt be reduced provided that the secured creditor be granted a share in the debtor’s equity in the property the subject of the security;
(e) that the principal sum due on the secured debt be reduced but subject to a condition that where the property the subject of the security is subsequently sold for an amount greater than the value attributed to that property for the purposes of the Personal Insolvency Arrangement, the secured creditor’s security will continue to cover such part of the difference between the attributed value and the amount for which the property is sold as is specified in the terms of the Personal Insolvency Arrangement;
(f) that arrears of payments existing at the inception of the Personal Insolvency Arrangement and payments falling due during a specified period thereafter be added to the principal amount due in respect of the secured debt; and
(g) that the principal sum due in respect of the secured debt be reduced to a specified amount.”.
Is there a seconder for this amendment? No.
Amendment No. 84 lapsed.
Government amendment No. 84a:
In page 90, after line 52, to insert the following:
“(11) Without prejudice to section 99, where a Personal Insolvency Arrangement includes terms providing for a reduction of the amount of debt (including principal, interest and arrears) secured by the security as of the date of the issue of the protective certificate to a specified amount, the terms of the Arrangement shall, unless the relevant secured creditor agrees otherwise, also include a term providing that the amount of such reduction shall:
(a) rank equally with, and abate in equal proportion to, the unsecured debts covered by the Arrangement; and
(b) be discharged with those unsecured debts on completion of the obligations specified in the Arrangement.”.
Amendment agreed to.
Government amendment No. 84b:
In page 91, to delete lines 1 to 48, and in page 92, to delete lines 1 to 39 and substitute the following:
99.—(1) A Personal Insolvency Arrangement which includes terms providing for the sale or other disposal of the property the subject of the security shall, unless the relevant secured creditor agrees otherwise, include a term providing that the amount to be paid to the secured creditor shall amount at least to—
(a) the value of the security determined in accordance with section 101; or
(b) the amount of the debt (including principal, interest and arrears) secured by the security as of the date of the issue of the protective certificate, whichever is the lesser.
(2) A Personal Insolvency Arrangement which includes terms providing for—
(a) retention by a secured creditor of the security held by that secured creditor,
and
(b) a reduction of the principal sum due in respect of the secured debt due to that secured creditor to a specified amount, shall not, unless the relevant secured creditor agrees otherwise, specify the amount of the reduced principal sum referred to in paragraph (b) at an amount less than the value of the security determined in accordance with section 101.
(3) A Personal Insolvency Arrangement which includes terms involving—
(a) retention by a secured creditor of the security held by that secured creditor,
and
(b) a reduction of the principal sum due in respect of the secured debt due to that secured creditor to a specified amount, shall, unless the relevant secured creditor agrees otherwise, also include terms providing that any such reduction of the principal sum is subject to the condition that, subject to subsections (4) to (13), where the property the subject of the security is sold or otherwise disposed of for an amount or at a value greater than the value attributed to the security in accordance with section 101, the debtor shall pay to the secured creditor an amount additional to the reduced principal sum calculated in accordance with subsection (4) or such greater amount as is provided for under the terms of the Personal Insolvency Arrangement.
(4) Subject to subsections (5) to (13), the additional amount referred to in subsection (3) shall be the lesser of—
(a) the entire of the difference between the value of the property on disposition and the value attributed to the security in accordance with section 101, and
(b) the amount of the reduction in the principal sum due in respect of the secured debt under the Personal Insolvency Arrangement as referred to in subsection (3)(b).
(5) For the purposes of subsection (4), any portion of the increase in the value of the property attributable to significant improvements made to (or other measures taken which have made a material contribution to the increase in the value of) the property over which the debt is secured which were made subsequent to the valuation of the security for the purposes of the Personal Insolvency Arrangement shall be disregarded in calculating the additional amount payable by the debtor.
(6) Subsection (5) shall not apply unless the secured creditor has given his or her consent in writing to the improvements or other measures concerned, which consent shall not be unreasonably withheld.
(7) For the purposes of subsection (4), any payment or transfer of assets to the secured creditor pursuant to the Personal Insolvency Arrangement properly attributable to a reduction of the principal sum due in respect of the secured debt shall be deducted from the additional amount referred to in subsection (3).
(8) For the purposes of subsection (4), the expenses and costs borne by the debtor in connection with the sale or other disposal of the property shall, to the extent that those costs and expenses are of a type and amount normally payable by the vendor of property of that nature, be deducted from the value attributable to the property on such sale or disposal.
(9) The obligation to pay an additional amount arising by virtue of this section shall not apply where the value of the property on its sale or other disposal is less than the amount of the debt secured by the security (other than any additional amount secured by virtue of subsection (10)) immediately prior to such sale or other disposition of the property.
(10) Any additional amount payable by virtue of this section shall stand secured in the same manner and with the same priority as the principal sum referred to in subsection (3)(b).
(11) The obligation to pay an additional amount arising by virtue of this section shall cease—
(a) on the expiry of the period of 20 years commencing on the date on which the Personal Insolvency Arrangement comes into effect, or
(b) on the day on which the debtor is scheduled or permitted to fully discharge the amount secured by the security (or such later date as may be specified for so doing in the Personal Insolvency Arrangement) and does so discharge his or her indebtedness, whichever first occurs.
(12) Unless otherwise provided for under the terms of the Personal Insolvency Arrangement, where a property in respect of which subsection (3) applies is the subject of security held by more than one secured creditor—
(a) any additional amounts payable by virtue of this section to the secured creditors shall be paid in order of the priority of the security held by each secured creditor, and
(b) if the security held by a secured creditor is not ranked first in priority, the obligation to pay an additional amount to that creditor arising by virtue of this section shall apply only if and to the extent that the sum of the additional amounts payable to secured creditors holding security with higher ranking priority than the secured creditor concerned is less than the additional amount calculated in accordance with subsection (4).
(13) For the purposes of subsection (3)—
(a) without prejudice to the generality of that subsection, a disposal by a debtor of property the subject of security held by a secured creditor shall include the voluntary grant by the debtor of security over that property to any person other than that secured creditor, including any such grant of security in connection with what is commonly known as a refinancing of the existing secured debt, and
(b) a debtor shall not be considered to dispose of property the subject of security held by a secured creditor where the debtor leases or licenses the property to any person for a term of less than 20 years.”.
This amendment provides for the replacement of the current section 99 with revised text that seeks to simplify the provisions. Section 99 sets out a number of protections for secured creditors in a personal insolvency arrangement. The claw-back mechanism provides that where secured debt has been written down under a personal insolvency arrangement, PIA, and the property that is the subject of the security for that debt is subsequently disposed of by the debtor for an amount or at a value greater than the value attributed to the security for the purpose of the arrangement, the debtor may be obliged to pay an additional amount to the secured creditor. In other words, some or all of the debt forgiveness that the debtor gained originally following a write-down of secured debt under a personal insolvency arrangement could, due to an increase in property values at the time of a future sale within a period not to exceed 20 years from the date of the PIA, be clawed back in favour of the secured creditor.
Subsection (9) is intended to ensure the claw-back only applies where the sale proceeds exceed the outstanding amount of the secured debt. As mentioned earlier, the claw-back is intended to prevent a debtor gaining a windfall at the expense of a secured creditor. However, no such windfall arises for the debtor in the case of what is known as a short sale, that is, where the sale proceeds of the property subject to the security are not sufficient to discharge the outstanding secured debt. The main purpose of the proposed replacement of section 99 with a new text is to improve the clarity of the provisions regarding the claw-back mechanism and to provide for situations where there is more than one secured creditor in respect of the same property.
I propose to withdraw amendments Nos. 85 to 97 which have been incorporated into the replacement section 99 that is proposed to be inserted by amendment No. 84b.
Amendment agreed to.
Amendments Nos. 85 to 97, inclusive, not moved.
Government amendment No. 97a:
In page 93, to delete lines 45 to 49, to delete page 94 and in page 95, to delete lines 1 to 11 and substitute the following:
101.—(1) Subject to the provisions of this section the value of security in respect of secured debt for the purposes of this Chapter shall be the market value of the security determined by agreement between the personal insolvency practitioner, the debtor and the relevant secured creditor.
(2) Where the personal insolvency practitioner does not accept a secured creditor’s estimate of the value, if any, of the security furnished by the secured creditor under section 98, the debtor, the personal insolvency practitioner and the secured creditor shall in good faith endeavour to agree the market value for the security having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5).
(3) In the absence of agreement as to the value of the security, the personal insolvency practitioner, the debtor and the relevant secured creditor shall appoint an appropriate independent expert to determine the market value for the security having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5).
(4) Where the personal insolvency practitioner, the debtor and the secured creditor are unable to agree as to the independent expert to be appointed under subsection (3) the issue may be referred by any of them to the Insolvency Service which shall appoint such independent expert as it considers appropriate to determine the market value of the security concerned having regard to any matter relevant to the valuation of security, including the matters specified in subsection (5), and the valuation carried out by such expert shall be binding on the personal insolvency practitioner, the debtor and the secured creditor concerned.
(5) The matters referred to in subsections (2) to (4) as the matters specified in subsection (5) are:
(a) the type of property the subject of the security;
(b) the priority of the security;
(c) the costs of disposing of the property the subject of the security;
(d) the price at which similar property to that which is the subject of the security has been sold within the 12 months prior to the issue of the protective certificate;
(e) the date of the most recent valuation or transaction with respect to the property the subject of the security and the value attributed to the property in respect of that valuation or transaction;
(f) the value attributed to the property the subject of the security in the debtor’s accounting records (if any);
(g) the value attributed to the security in the secured creditor’s accounting records (if any);
(h) whether the market for the type of property the subject of the security is or has been subject to significant changes in conditions;
(i) data made available to the public by the Property Services Regulatory Authority pursuant to Part 12 of the Property Services (Regulation) Act 2011 and which relate to property similar to the property the subject of the security; and
(j) any relevant statistical index relating to the valuation of the same or similar types of property as the property the subject of the security.
(6) In this section “market value”—
(a) as respects property the subject of security for a secured debt, means the price which that property might reasonably be expected to fetch on a sale in the open market;
(b) as respects security for a secured debt, means the amount that might reasonably be expected to be available to discharge that secured debt, in whole or in part, following realisation of the security by the secured creditor concerned and, where permitted by the terms of the security or otherwise, after deducting all relevant costs and expenses in connection with the realisation of the security.
(7) The creditor concerned and the personal insolvency practitioner shall each pay 50 per cent of the costs of carrying out the valuation by the independent expert pursuant to subsection (3) or (4).
(8) The amount paid by the personal insolvency practitioner pursuant to subsection (7) shall be treated as an outlay for the purposes of the Personal Insolvency Arrangement.
(9) For the purposes of this section, the personal insolvency practitioner, the debtor, the secured creditor concerned and any independent expert shall be entitled to assume, in the absence of any clear evidence to the contrary, that the market value of the security which is a first charge is the lesser of—
(a) an amount equal to the market value of the property the subject of the security, or
(b) unless the nature of the security and the property concerned would make it unreasonable to do so, an amount equal to the market value of the property the subject of the security less an adjustment to that value as respects the costs and expenses which would normally be necessarily incurred by a secured creditor in the realisation of a security of a similar kind to that of the security concerned, provided that the adjustment is no greater than 10 per cent of the market value of the property the subject of the security.”.
Amendment agreed to.
Amendments Nos. 98 to 105, inclusive, not moved.
Government amendment No. 105a:
In page 96, to delete lines 50 and 51 and in page 97, to delete lines 1 to 25 and substitute the following:
104.—(1) A vote held at a creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement shall be held in accordance with this section, section 106 and regulations made under section 107.
(2) Subject to subsection (1), the voting rights exercisable by a creditor at a creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement shall be proportionate to the amount of the debt due by the debtor to the creditor on the day the protective certificate is issued.
(3) In the case of a secured debt, where:
(a) the value of security held by a creditor who is a secured creditor is determined, pursuant to section 101, to be less than the amount of the secured debt due to the creditor on the day the protective certificate is issued; and
(b) the proposed Personal Insolvency Arrangement provides for all or part (“relevant portion”) of that secured debt to:
(i) rank equally with, and abate in equal proportion to, the unsecured debts covered by the Arrangement; and
(ii) be discharged with those unsecured debts on completion of the obligations specified in the Arrangement,
then, the relevant portion of that secured debt shall, for the purposes of this section (other than this subsection), section 106 and regulations made under section 107, be treated as unsecured and the creditor concerned may vote in respect of the relevant portion of that debt as an unsecured creditor.
(4) Where a secured creditor consents in writing to the inclusion of terms in the Personal Insolvency Arrangement providing for the surrender to the debtor of his or her security upon the coming into effect of the Arrangement, that creditor shall be treated as an unsecured creditor for the purposes of this section (other than this subsection), section 106 and regulations made under section 107 and shall only be entitled to vote at a creditors’ meeting as an unsecured creditor.
(5) A creditor who is a connected person as respects the debtor may not vote in favour of a proposal for a Personal Insolvency Arrangement at a creditors’ meeting but that creditor may vote against the proposal.
(6) Where only one creditor is entitled to vote at the creditors’ meeting (whether in respect of one or more debts), the requirement to hold a creditors’ meeting shall be satisfied where the creditor concerned notifies the personal insolvency practitioner in writing of that creditor’s approval or otherwise of the proposal for a Personal Insolvency Arrangement.
(7) Subject to any regulations made under section 107, only the person who appears to the personal insolvency practitioner to be the owner of the debt (or an agent acting on behalf of that person) shall be entitled to receive notices required to be sent to a creditor under this Chapter or to vote at the creditors’ meeting.
(8) Where no creditor votes, the proposed Personal Insolvency Arrangement shall be deemed to have been approved under this section.
(9) Where on the taking of a vote at a creditors’ meeting held for the purpose of considering a proposal for a Personal Insolvency Arrangement the proposal is not approved in accordance with subsection (1), the Personal Insolvency Arrangement procedure shall terminate and the protective certificate issued under section 91 shall cease to have effect.”.
Amendment agreed to.
Government amendment No. 105b:
In page 98, to delete lines 11 to 45 and in page 99, to delete lines 1 to 15 and substitute the following:
106.—(1) Subject to subsection (2) a proposed Personal Insolvency Arrangement shall be considered as having been approved by a creditors’ meeting held under this Chapter where—
(a) a majority of creditors representing not less than 65 per cent of the total amount of the debtor’s debts due to the creditors participating in the meeting and voting have voted in favour of the proposal,
(b) creditors representing more than 50 per cent of the value of the secured debts due to creditors who are—
(i) entitled to vote, and
(ii) have voted,
at the meeting as secured creditors have voted in favour of the proposal, and
(c) creditors representing more than 50 per cent of the amount of the unsecured debts of creditors who—
(i) are entitled to vote, and
(ii) have voted,
at the meeting as unsecured creditors have voted in favour of the proposal.
(2) For the purposes of subsection (1)(b) the value of a secured debt shall be—
(a) the market value of the security concerned determined in accordance with section 101, or
(b) the amount of the debt secured by the security on the day the protective certificate is issued, whichever is the lesser.”.
The purpose of amendment No. 105b is to clarify the operation of this section with regard to the valuation of secured debt for the purposes of the section.
Amendment agreed to.
Government amendment No. 106:
In page 100, to delete lines 28 to 48 and in page 101, to delete lines 1 to 8 and substitute the following:
“(1) Where—
(a) no objection is lodged by a creditor with the appropriate court within 14 days of the giving of the notice referred to in section 108, or
(b) an objection is lodged with the appropriate court and the matter is determined by the court on the basis that the objection should not be allowed,
the appropriate court shall proceed to consider, in accordance with this section, whether to approve the coming into effect of the Personal Insolvency Arrangement.
(2) For the purposes of its consideration under subsection (1), the appropriate court shall consider the copy of the Personal Insolvency Arrangement furnished to it under section 109(1) and, subject to subsection (3)—
(a) shall approve the coming into effect of the Arrangement, if satisfied that the—
(i) eligibility criteria specified in section 88 have been satisfied,
(ii) mandatory requirements referred to in section 95(2) have been complied with,
(iii) Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt, an excludable debt (other than a permitted debt) or otherwise affect such a debt, and
(iv) requisite proportions of creditors have approved the proposal for a Personal Insolvency Arrangement,
and
(b) if not so satisfied, shall refuse to approve the coming into effect of the Personal Insolvency Arrangement.
(3) The appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (1), may hold a hearing, which hearing shall be on notice to the Insolvency Service and the personal insolvency practitioner concerned.
(4) A hearing referred to in subsection (3), unless the appropriate court considers it appropriate to hold it in public, shall be held otherwise than in public.
(5) For the purposes of subsection (2), the court may accept—
(a) a certificate issued by the Insolvency Service certifying that the eligibility criteria specified in section 88 have been satisfied as evidence that such eligibility criteria have been satisfied, and
(b) the certificate issued by the personal insolvency practitioner concerned pursuant to section 108(1)(a) as evidence that the requisite proportions of creditors have approved the proposal for a Personal Insolvency Arrangement.
(6) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court—
(a) approves or refuses to approve the coming into effect of the Personal Insolvency Arrangement under this section, or
(b) decides to hold a hearing referred to in subsection (3).
(7) On receipt of a notification under subsection (6) of the approval of the coming into effect of the Personal Insolvency Arrangement, the Insolvency Service shall register the Personal Insolvency Arrangement in the Register of Personal Insolvency Arrangements.”.
Amendment agreed to.
Government amendment No. 107:
In page 101, lines 22 to 24, to delete all words from and including “concerned,” in line 22 down to and including “Arrangement.” in line 24 and substitute “concerned.”.
Amendment agreed to.
Government amendment No. 108:
In page 101, to delete lines 25 to 43 and in page 102, to delete lines 1 to 5 and substitute the following:
“(3) Where a Personal Insolvency Arrangement is in effect, a creditor who is bound by it shall not, in relation to a specified debt—
(a) initiate any legal proceedings;
(b) take any step to prosecute legal proceedings already initiated;
(c) take any step to secure or recover payment;
(d) execute or enforce a judgment or order of a court or tribunal against the debtor;
(e) take any step to enforce security held by the creditor;
(f) take any step to recover goods in the possession or custody of the debtor
(whether or not title to the goods is vested in the creditor or the creditor has security over the goods);
(g) contact the debtor regarding payment of the specified debt otherwise than at the request of the debtor;
(h) in relation to an agreement with the debtor, including a security agreement, by reason only that the debtor is insolvent or that a Personal Insolvency Arrangement is in effect—
(i) terminate or amend that agreement, or
(ii) claim an accelerated payment under that agreement.”.
Amendment agreed to.
Government amendment No. 109:
In page 102, between lines 33 and 34, to insert the following:
“(10) Notwithstanding subsections (3) and (4), the fact that a Personal Insolvency Arrangement is in effect in relation to a debtor under this Chapter shall not operate to prevent a creditor taking the actions referred to in subsection (3) or (4) as respects another person who has guaranteed the specified debts concerned.”.
Amendment agreed to.
Government amendment No. 110:
In page 103, line 6, to delete “the debtor has” and substitute “the debtor has defaulted”.
Amendment agreed to.
Government amendment No. 111:
In page 103, line 36, after “made” to insert the following:
“under this Act and in accordance with the Personal Insolvency Arrangement”.
Amendment agreed to.
Amendments Nos. 112 and 124 are related and may be discussed together.
Government amendment No. 112:
In page 104, line 10, to delete “€1,000” and substitute “€650”.
Amendment No. 112 reduces the amount of credit that a debtor may seek without informing the creditor of the fact that he is party to a personal insolvency arrangement to €650. This is the same amount in the debt relief notice and debt settlement arrangement.
The purpose of amendment No. 124
is to bring the offence provision in section 125 into line with the restrictions on obtaining credit above a specified amount that apply to a debtor in respect of a debt relief notice, debt settlement arrangement or personal insolvency arrangement.
Amendment agreed to.
Government amendment No. 112a:
In page 22 of the list of amendments made in Committee, to delete the text inserted by amendment no. 64, and substitute the following:
“(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:
(i) income tax;
(ii) social insurance contributions;
(iii) payments made by him or her in respect of excluded debts;
(iv) payments made by him or her in respect of excludable debts that are not permitted debts;
(v) such other levies and charges on income as may be prescribed,
or”.
Amendment agreed to.
Government amendment No. 112b:
In page 104, to delete lines 45 to 50 and in page 105, to delete lines 1 to 10 and substitute the following:
“(4) In order that a variation of a Personal Insolvency Arrangement take effect, in addition to the consent in writing of the debtor referred to in subsection (2), the variation shall be approved at a creditors’ meeting where—
(a) a majority of creditors representing not less than 65 per cent of the total amount of the debtor’s debts remaining due to the creditors participating in the meeting and voting have voted in favour of the proposal,
(b) creditors representing more than 50 per cent of the value of the secured debts due to creditors who are—
(i) entitled to vote, and
(ii) have voted,
at the meeting as secured creditors have voted in favour of the proposal, and
(c) creditors representing more than 50 per cent of the amount of the unsecured debts of creditors who—
(i) are entitled to vote, and
(ii) have voted,
at the meeting as unsecured creditors have voted in favour of the proposal.”.
Amendment agreed to.
Government amendment No. 112c:
In page 105, line 17, to delete “sections 106 to 111” and substitute “sections 105 to 111”.
Amendment agreed to.
Government amendment No. 112d:
In page 105, to delete lines 38 to 44 and substitute the following:
“(9) For the purposes of subsection (4)(b) the value of a secured debt shall be—
(a) the market value of the security concerned determined in accordance with section 101, or
(b) the amount of the debt secured by the security on the day on which the vote takes place,
whichever is the lesser.”.
Amendment agreed to.
Government amendment No. 113:
In page 106, line 21, to delete “Act” and substitute “Act, which causes a material detriment to the creditor”.
Amendment agreed to.
Government amendment No. 114:
In page 106, line 23, to delete “within the meaning of subsection (2)”.
Amendment agreed to.
Government amendment No. 115:
In page 106, to delete lines 28 to 32 and substitute the following:
“(h) the debtor had given a preference to a person within the preceding 3 years that had the effect of substantially reducing the amount available to the debtor for the payment of his or her debts (other than a debt due to the person who received the preference).”.
Amendment agreed to.
Government amendment No. 116:
In page 106, to delete lines 33 to 49 and in page 107, to delete lines 1 to 4.
Amendment agreed to.
Government amendment No. 117:
In page 107, between lines 4 and 5, to insert the following:
117.—(1) Where, as respects a debtor who has entered into a Personal Insolvency Arrangement which is in force, a creditor or the personal insolvency practitioner concerned considers that a debtor has made excessive contributions to a relevant pension arrangement, the creditor or personal insolvency practitioner may make an application to the appropriate court for relief in accordance with this section.
(2) The reference to the debtor having made contributions to a relevant pension arrangement shall be construed as a reference to contributions made by the debtor at any time within 3 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89.
(3) Where the appropriate court considers that having regard in particular to the matters referred to in subsection (4) the contributions to a relevant pension arrangement were excessive it may:
(a) direct that such part of the contribution concerned (less any tax required to be deducted) be paid by the person administering the relevant pension arrangement to the personal insolvency practitioner for distribution amongst the creditors of the debtor, and
(b) make such other order as the court deems appropriate, including an order as to the costs of the application.
(4) The matters referred to in subsection (3) as respects the contributions made by the debtor to a relevant pension arrangement are:
(a) whether the debtor made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the debtor made the contribution concerned;
(b) whether the debtor was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the debtor or a person who as respects the debtor is a connected person could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the debtor in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89 including the percentage of total income of the debtor concerned which such contributions represent in each of those years;
(e) the age of the debtor at the relevant times;
(f) the percentage limits which applied to the debtor in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the making of the application for a protective certificate on behalf of the debtor under section 89; and
(g) the extent of provision made by the debtor in relation to any relevant pension arrangement prior to the making of the contributions concerned.”.
Amendment agreed to.
Government amendment No. 118:
In page 107, to delete lines 38 and 39 and substitute the following:
“(b) at no time during that 3 month period were any obligations in respect of those payments discharged.”.
Amendment agreed to.
Government amendment No. 119:
In page 108, line 4, after “Service” to insert “and the debtor”.
Amendment agreed to.
Government amendment No. 120:
In page 108, between lines 5 and 6, to insert the following:
“(2) For the purposes of subsection (1), a debtor is in arrears with his or her payments for a period of 6 months on a given date if—
(a) at the beginning of the 6 month period ending immediately before that date, one or more than one payment in respect of a debt became due and payable by the debtor under the Personal Insolvency Arrangement, and
(b) at no time during that 6 month period were any obligations in respect of those payments discharged.”.
The amendment has already been discussed.
The query related to section 118 and the amendment provides some clarification.
Amendment agreed to.
Government amendment No. 120a:
In page 108, line 11, to delete “has been deemed to come to an end, has failed” and substitute “has been deemed to have failed”.
Amendment agreed to.
Amendments. Nos. 121, 122, 122a, 123 and 126 are related and will be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 121:
In page 109, to delete lines 5 to 13 and substitute the following:
122.—(1) A person who is a specified debtor under Chapter 1 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 33, or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 1, knowing the information to be false or misleading in a material respect.
(2) A person who is party, as a debtor, to a Debt Settlement Arrangement under Chapter 3 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 76(3) or 76 (6), or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 3, knowing the information to be false or misleading in a material respect.
(3) A person who is party, as a debtor, to a Personal Insolvency Arrangement under Chapter 4 is guilty of an offence if he or she—
(a) intentionally fails to comply with an obligation under section 114(3) or 114(6), or
(b) provides information to the Insolvency Service in connection with such an obligation, or otherwise in connection with the performance by the Insolvency Service of its functions under Chapter 4, knowing the information to be false or misleading in a material respect.”.
The purpose of amendment No. 121 is to provide that section 122, which deals with breaches of a debtor's obligations under a debt relief notice, will be broadened to also cover breach of obligations under a debt settlement arrangement or a personal insolvency arrangement.
Amendments Nos. 122 and 123
are drafting amendments to sections 123 and 124, first, to correct cross-references to other sections of the Bill and, second, to seek to prevent any possible erroneous interpretation of those provisions as meaning that a person who commits an offence under those sections can only be prosecuted while the insolvency arrangement remains in effect, and not after it ends or is terminated, even if the wrongdoing only comes to light then.
Amendment No. 122a
aims to provide more clarity as to what is intended to be prohibited by section 124, which deals with fraudulent disposal of property by a debtor who is applying for a DRN, a DSA or a PIA. Amendment No. 126
proposes to amend section 127 to increase the fine for a summary offence under the Bill to a class A fine, which means a fine not exceeding €5,000.
Amendment agreed to.
Government amendment No. 122:
In page 109, to delete line 41 and in page 110, to delete lines 1 to 10 and substitute the following:
“(3) This section applies to a person—
(a) on whose behalf an application under section 26, 54 or 89 is made,
(b) who is a specified debtor under Chapter 1,
(c) who is party, as a debtor, to a Debt Settlement Arrangement which is in effect, or
(d) who is party, as a debtor, to a Personal Insolvency Arrangement which is in effect.”.
Amendment agreed to.
Government amendment No. 122a:
In page 110, to delete lines 26 to 28 and substitute the following:
“(2) Subject to subsection (3), a person commits an act referred to in this subsection where he or she—
(a) makes or causes to be made a gift of any of his or her property to another person,
(b) otherwise makes or causes to be made any transfer of any of his or her property, on terms that provide for him or her to receive no consideration, to another person, or
(c) enters into a transaction with another person involving the transfer of any of his or her property to that other person or to a third person (whether or not the third person is a party to the transaction), where the value of the property concerned, in money or money’s worth, is significantly greater than the value, in money or money’s worth, of the consideration provided by the other person.
(3) Subsection (2) does not apply to property of a value of less than €400.”.
Amendment agreed to.
Government amendment No. 123:
In page 110, to delete lines 29 to 39 and substitute the following:
“(3) This section applies to a person—
(a) on whose behalf an application under section 26, 54 or 89 is made,
(b) who is a specified debtor under Chapter 1,
(c) who is party, as a debtor, to a Debt Settlement Arrangement which is in effect, or
(d) who is party, as a debtor, to a Personal Insolvency Arrangement which is in effect.”.
Amendment agreed to.
Government amendment No. 124:
In page 110, line 42, to delete “€1,000” and substitute “€650”.
Amendment agreed to.
Government amendment No. 125:
In page 111, to delete lines 21 to 25 and substitute the following:
126.—(1) A person shall not—
(a) act as an approved intermediary,
(b) hold himself or herself out as available to act as an approved intermediary, or
(c) represent himself or herself by advertisement as available to act as an approved intermediary,
unless that person is authorised to so act by virtue of this Act.
(2) A person who acts in contravention of subsection (1) is guilty of an offence.”.
Amendment agreed to.
Government amendment No. 126:
In page 111, line 30, to delete “Class C” and substitute “Class A”.
Amendment agreed to.
Government amendment No. 127:
In page 112, to delete lines 39 to 41.
Amendment agreed to.
Amendments Nos. 128 to 130, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 128:
In page 112, line 45, to delete “receiving the notice” and substitute the following:
“receiving the notice or the appropriate court otherwise directs or permits”.
Amendments Nos. 128 to 130, inclusive, are drafting amendments designed to allow for service of notices by ordinary prepaid letter rather than by registered prepaid letter as currently required by section 129. This change has been suggested by legal practitioners to address difficulties in using registered post effectively. It is the experience of many solicitors that up to 50% of this post is not delivered. The single largest reason is "not called for". Other reasons include "refused" or "gone away". Ex parte applications are expensive and time-consuming to follow up on. In Northern Ireland such service of documents is now conducted via first class post.
Amendment agreed to.
Government amendment No. 129:
In page 113, to delete lines 1 to 4 and substitute the following:
“(a) where a person is a natural person—
(i) by giving it to the person personally, or
(ii) by sending it by prepaid post, or otherwise delivering it, in a letter addressed to the person at the person’s usual or last known place of residence or business,
or”.
Amendment agreed to.
Government amendment No. 130:
In page 113, to delete lines 8 to 13 and substitute the following:
“(ii) by leaving it at the registered office of the body, or
(iii) by sending it by prepaid post in a letter addressed to the body at that registered office.”.
Amendment agreed to.
Amendments Nos. 131 to 133, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 131:
In page 113, line 31, to delete “The Minister” and substitute the following:
“The Insolvency Service, with the consent of the Minister”.
At present, section 131 requires the Minister for Justice and Equality to prescribe the form of the prescribed financial statement to be used in applications for the new debt resolution processes provided for in the Bill. For flexibility, amendments Nos. 131 and 132 propose instead that the Insolvency Service should carry out this function. Amendment No. 133 is a technical drafting amendment to improve the presentation of section 131.
Amendment agreed to.
Government amendment No. 132:
In page 113, line 43, to delete “the Minister” and substitute “the Insolvency Service” .
Amendment agreed to.
Government amendment No. 133:
In page 114, line 7, to delete “that information” and substitute “that personal data and information”.
Amendment agreed to.
Government amendment No. 134:
In page 114, lines 11 and 12, to delete “authorised intermediary” and substitute “approved intermediary”.
Amendment agreed to.
Government amendment No. 134a:
In page 114, line 38, to delete “98/26/EC4” and substitute “98/26/EC”.
Amendment No. 134a is a technical drafting amendment to correct a presentational error in the text of section 133.
Amendment agreed to.
Government amendment No. 135:
In page 114, after line 47, after the proposed section 134 inserted at Committee Stage, to insert the following:
134.—(1) Notwithstanding any other provision of this Act, or any other enactment or rule of law, rules of court may, in relation to any proceedings under this Act
before an appropriate court, make provision for—
(a) the lodgement or filing of a document with, and making of an application to, the court by transmitting the document or application by electronic means to the court office,
(b) the issue by the court or court office, by transmitting the document concerned by electronic means to an appropriate person, of any of the following:
(i) a summons, civil bill or other originating document,
(ii) a judgment, decree or other order or determination of a court (including any judgment, decree or other order or determination entered in or issuing from a court office), or
(iii) any other document required under this Act to be issued by or on behalf of the court or court office concerned,
or
(c) the transmission by the court or court office by electronic means of any other document or information required under this Act to be transmitted by or on behalf of a court or court office.
(2) Where rules of court referred to in subsection (1) provide for the transmission of a document by electronic means, such rules may, in addition:
(a) provide that such transmission is subject to such conditions and such exceptions as may be specified in the rules,
(b) in relation to the transmission of a document referred to in subsection (1)(a), require that—
(i) such a document be authenticated, and
(ii) the identity of the person transmitting such a document be verified, in such manner as may be specified in the rules, and
(c) specify, in relation to the transmission of such a document by, or to, the Insolvency Service, whether such transmission is in place of, or is an alternative to, any other method by which such document could be filed, lodged, issued or transmitted, or such application could be made, as the case may be.
(3) Rules of court may provide that, where a document that is required by this Act to be furnished to, or lodged or filed with, the appropriate court, is, in accordance with rules of court referred to in subsection (1), furnished to, or lodged or filed with, that court by electronic means—
(a) a copy of that document transmitted by electronic means and displayed in readable form, or
(b) a printed version of such a copy, shall be treated as the original of that document.
(4) Rules of court made in accordance with this section may make different provision for the transmission of documents by, and to, the Insolvency Service to the provision made for the transmission of documents by, and to, other persons.
(5) References in this Act to the—
(a) furnishing of a document to,
(b) lodgement or filing of a document with,
(c) making of an application to,
(d) transmission of a document to or by, or
(e) issue of a document by,
the appropriate court shall be construed as including a reference to the performance of such action by electronic means, where this is provided for in rules of court referred to in subsection (1).
(6) In this section—
“appropriate person”, in relation to a document referred to in subsection (1)(b), means—
(a) the Insolvency Service, where it applied to the appropriate court for the issue of that document,
(b) the person who applied to the appropriate court for the issue of that document,
(c) where applicable, the approved intermediary or personal insolvency practitioner of a person referred to in paragraph (b), or
(d) where applicable, a solicitor acting on behalf of an approved intermediary or personal insolvency practitioner referred to in paragraph (c);
“court office” means—
(a) in relation to an appropriate court, an office of, or attached to, that court and, where the appropriate court is the Circuit Court, means an office referred to in section 5(3), or
(b) any office of the Courts Service designated by the Courts Service for the purpose of receiving documents or applications, or issuing documents, by electronic means for the purposes of this Act.”.
Amendment agreed to.
Government amendment No. 135a:
In page 114, after line 47, to insert the following:
"134.—(1) The Minister shall, in consultation with the Minister for Finance, not later than 3 years after the commencement of this Part, commence a review of its operation.
(2) A review under subsection (1) shall be completed not later than one year after its commencement.
(3) Having completed the review the Minister in consultation with the Minister for Finance shall prepare a report setting out the assessment arrived at and the reasons for that assessment.
(4) The Minister shall lay a copy of a report prepared under subsection (3) before each House of the Oireachtas as soon as reasonably practicable after it has been completed."
Amendment agreed to
Government amendment No. 136:
In page 115, between lines 10 and 11, to insert the following:
“ ‘trustee’ ” means a person appointed as trustee under Part V;”.”
This amendment inserts ""trustee" to mean a person appointed as a trustee under Part V" to give greater clarity to the Bill.
Amendment agreed to.
Government amendment No. 137:
In page 115, between lines 10 and 11, to insert the following:
135.—Section 7 of the Bankruptcy Act 1988 is amended in subsection (1) by the insertion after paragraph (c) of the following paragraphs:
“(ca) the individual has been subject as a debtor to a Debt Settlement Arrangement which has been terminated under section 79 of the Personal Insolvency Act 2012;
(cb) the individual has been subject as a debtor to a Debt Settlement Arrangement which under section 80 of the Personal Insolvency Act 2012 is deemed to have failed;
(cc) the individual has been subject as a debtor to a Personal Insolvency Arrangement which has been terminated under section 117 of the Personal Insolvency Act 2012;
(cd) the individual has been subject as a debtor to a Personal Insolvency Arrangement which under section 118 of the Personal Insolvency Act 2012 is deemed to have failed;”.
Amendment agreed to.
Government amendment No. 138:
In page 116, lines 31 and 32, to delete “value of assets” and substitute “value of the assets”.
Amendment agreed to.
Government amendment No. 139:
In page 116, lines 35 and 36, to delete all words from and including “the” where it firstly occurs in line 35 down to and including “Court” in line 36 and substitute the following:
“the contents of any statement of affairs of the debtor filed with the Court”.
Amendment agreed to.
Government amendment No. 140:
In page 116, line 47, to delete “in the State” and substitute the following:
“in the State.
(4) For the purposes of subsection (2), the Court may order the bankrupt to attend and make full disclosure of his assets and liabilities to the Court by way of a statement of affairs filed with the Court.”.”.
Amendment agreed to.
Government amendment No. 141:
In page 117, lines 7 and 8, to delete all words from and including “is” in line 7 down to and including “creditors” in line 8 and substitute the following:
“is unable to meet his engagements with his creditors and that the requirements of section 11(4) and (5) have been complied with”.
Amendment agreed to.
Government amendment No. 142:
In page 117, lines 11 and 12, to delete “value of assets” and substitute “value of the assets”.
Amendment agreed to.
Government amendment No. 142a:
In page 117, between lines 37 and 38, to insert the following:
141.—The Bankruptcy Act 1988 is amended by the insertion, after section 44, of the following sections:
44A.—(1) Subject to subsection (2), where a person is adjudicated bankrupt, and he or she is, or may become entitled to, payments under a relevant pension arrangement, assets relating to the arrangement (other than payments already received by the bankrupt, or that the bankrupt was entitled to receive, under the arrangement) shall not vest in the Official Assignee for the benefit of the creditors of the bankrupt.
(2) Where a bankrupt has an interest in or entitlement under a relevant pension arrangement which would, if the bankrupt performed an act or exercised an option,
cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—
(a) an income, or
(b) an amount of money other than income,
in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that bankrupt shall be considered as being in receipt of such income, and such amount of money shall vest in the Official Assignee or the trustee in bankruptcy.
(3) Subsection (2) applies where—
(a) the bankrupt is entitled at the date of being adjudicated a bankrupt to perform the act or exercise the option referred to in subsection (2),
(b) was entitled at any time before the date of the adjudication, to perform the act or exercise the option referred to in subsection (2), but had not performed the act or exercised the option, or
(c) will become entitled within 5 years of the date of the adjudication to perform the act or exercise the option referred to in subsection (2).
(4) Where subsection (2) applies, the Official Assignee or the trustee in bankruptcy may where he or she considers that it would be beneficial to the creditors of the bankrupt to do so, perform an act or exercise an option referred to in subsection (2) in place of the bankrupt.
(5) In this section and in sections 44B and 85D a reference to a relevant pension arrangement means:
(a) a retirement benefits scheme, within the meaning of section 771 of the Taxes Consolidation Act 1997, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1 of Part 30 of that Act;
(b) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784 of the Taxes Consolidation Act 1997;
(c) a PRSA contract, within the meaning of section 787A of the Taxes Consolidation Act 1997, in respect of a PRSA product, within the meaning of that section;
(d) a qualifying overseas pension plan within the meaning of section 787M of the Taxes Consolidation Act 1997;
(e) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004;
(f) a statutory scheme, within the meaning of section 770(1) of the Taxes Consolidation Act 1997, other than a public service pension scheme referred to in paragraph (e);
(g) such other pension arrangement as may be prescribed by the Minister, following consultation with the Ministers for Finance, Social Protection and Public Expenditure and Reform.
44B.—(1) Where, on application by the Official Assignee or the trustee in bankruptcy, the Court is satisfied that the bankrupt, or a person on his or her behalf, has within the 3 years prior to the adjudication made contributions to a relevant pension arrangement under which the bankrupt is, or may become entitled to, payments and which contributions—
(a) were excessive in view of the bankrupt’s financial circumstances when those contributions were made, and
(b) had the effect of—
(i) materially contributing to the bankrupt’s inability to pay his or her debts, or
(ii) substantially reducing the sum available for distribution to thecreditors,
the Court may make such order in relation to the relevant pension arrangement as it considers appropriate for the purpose of ensuring that the contributions which the Court considers to be excessive or any part of such contributions can be vested in the Official Assignee or the trustee in bankruptcy to be made available for distribution to the creditors.
(2) In considering an application under subsection (1) and in determining whether or not the contributions made by the bankrupt to a relevant pension arrangement were excessive the court may have regard to all the financial circumstances of the bankrupt and in particular:
(a) whether the bankrupt made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the bankrupt made the contribution concerned;
(b) whether the bankrupt was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the bankrupt or a person who as respects the bankrupt is a relative could have materially influenced the creation of such obligation;
(c) the amount of the contributions paid, including the percentage of total income of the bankrupt in each tax year concerned which such contributions represent;
(d) the amount of the contributions paid, in each of the 6 years prior to the making of the adjudication including the percentage of total income of the bankrupt which such contributions represent in each of those years;
(e) the age of the bankrupt at the relevant times;
(f) the percentage limits which applied to the bankrupt in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement; in each of the 6 years prior to the adjudication; and
(g) the extent of provision made by the bankrupt in relation to any relevant pension arrangement prior to the making of the contributions concerned.
(3) In this section “relative” as respects a person, means a brother, sister, parent, spouse or civil partner of the person or a child of the person or of the spouse or civil partner.”.
Amendment agreed to.
Government amendment No. 142b:
In page 118, between lines 7 and 8, to insert the following:
145.—The Bankruptcy Act 1988 is amended by the insertion, after section 65, of the following new section:
65A.—An application for an order under section 65 shall not be made after the coming into operation of this section, but this section shall not operate to prevent an application under section 65(2) where an order under section 65(1) is in force on the coming into operation of this section.”.”.
Amendment agreed to.
Government amendment No. 143:
In page 118, to delete lines 37 to 39 and substitute the following:
“(5) A person whose bankruptcy has been discharged by virtue of this section may apply to the Official Assignee for the issue of a certificate of discharge from bankruptcy.
(6) In this section and in sections 85A to 85D ‘bankrupt’ includes personal representatives and assigns.”.
Amendment agreed to.
Government amendment No. 144:
In page 118, line 40, to delete “Official Assignee or a creditor” and substitute the following:
“Official Assignee, the trustee in bankruptcy or a creditor”.
Amendment agreed to.
Government amendment No. 145:
In page 118, line 45, to delete “Official Assignee or the creditor” and substitute the following:
“Official Assignee, the trustee in bankruptcy or the creditor”.
Amendment agreed to.
Government amendment No. 146:
In page 119, line 10, to delete “by a creditor” and substitute “by the trustee in bankruptcy or a creditor”.
Amendment agreed to.
Government amendment No. 147:
In page 120, between lines 8 and 9, to insert the following:
“(3) A person whose bankruptcy has been discharged by virtue of this section may apply to the Official Assignee for the issue of a certificate of discharge from bankruptcy.”.
Amendment agreed to.
Government amendment No. 148:
In page 120, between lines 22 and 23, to insert the following:
“(3) A person whose bankruptcy has been annulled may apply to the Official Assignee for the issue of a certificate that the bankruptcy has been annulled.”.
Amendment agreed to.
Government amendment No. 148a:
In page 120, to delete lines 23 to 49 and in page 121, to delete lines 1 to 3 and substitute the following:
85D.—(1) The Court may, on application being made to it by the Official Assignee or the trustee in bankruptcy, make an order requiring a bankrupt to make payments to the Official Assignee or the trustee in bankruptcy from his income or other assets for the benefit of his creditors (a ‘bankruptcy payment order’).
(2) An application for a bankruptcy payment order may not be made after the bankrupt has been discharged from bankruptcy, but where an application for such an order is made before the discharge of the bankrupt, the Court may make a bankruptcy payment order after the date of discharge as if the bankrupt had not been so discharged.
(3) An order made under subsection (1) shall have effect for no longer than 5 years from the date of the order coming into operation, and where, during the order’s validity, the court has varied the order under subsection (5) such variation shall not cause the order to have effect for a period of more than 5 years, and in any event, any order made under subsection (1) or varied under subsection (5) shall cease to have effect on the 8th anniversary of the date on which the bankrupt was adjudicated bankrupt.
(4) In making an order under subsection (1) the Court shall have regard to the reasonable living expenses of the bankrupt and his or her dependants and the Court may also have regard to any guidelines on reasonable living expenses issued by the Insolvency Service under the Personal Insolvency Act 2012 or by the Official Assignee.
(5) The Court, on the application of the bankrupt or the Official Assignee or the trustee in bankruptcy, may vary a bankruptcy payment order granted under subsection (1) where there has been a material change in the circumstances of the bankrupt.
(6) The court in granting an application under subsection (1) may order any person from whom the bankrupt is entitled to receive any salary, income, emolument, pension or other payment to make payments to the Official Assignee or trustee.
(7) For the purposes of this section, where a bankrupt is, or may become entitled to, payments under a relevant pension arrangement, an asset relating to the arrangement (other than payments already received by the bankrupt, or that the bankrupt was entitled to receive, under the arrangement) shall not be regarded as an asset.”.”.
Amendment agreed to.
Amendments Nos. 149 to 152, inclusive, not moved.
Government amendment No. 153:
In page 121, between lines 3 and 4, to insert the following:
147.—Section 123(3)(b) of the Bankruptcy Act 1988 is amended by the substitution of “3 years” for “twelve months”.
Amendment agreed to.
Government amendment No. 153a:
In page 38 of the list of amendments made in Committee, to delete the text inserted by amendment no. 87 and substitute the following:
166.—(1) A person may make a complaint in writing to the Insolvency Service alleging that improper conduct by a personal insolvency practitioner has occurred or is occurring.
(2) Where the Insolvency Service receives a complaint it shall—
(a) notify the personal insolvency practitioner concerned in writing of the receipt of the complaint,
(b) provide the personal insolvency practitioner with a copy of the complaint and a copy of any documents furnished to the Insolvency Service by the complainant,
(c) refer the personal insolvency practitioner to any regulations made under sections 149 and 161 and to any guidelines or codes of practice issued under section 132, and
(d) request the personal insolvency practitioner to provide a response in relation to the complaint within a time specified in the notification.
(3) Where the Insolvency Service receives a response to the request referred to in subsection (2)(d) it shall consider the response and having considered the response it may, where—
(a) it is satisfied that the complaint is not made in good faith,
(b) it is satisfied that the complaint is frivolous or vexatious or without substance or foundation, or
(c) subject to subsection (6), it is satisfied that the complaint is likely to be resolved by mediation or other informal means between the parties concerned, determine the complaint accordingly and in that case it shall give notice in writing to the complainant and the personal insolvency practitioner to whom the complaint relates of the decision and the reasons for the decision.
(4) Where the Insolvency Service does not receive a response to the request referred to in subsection (2)(d), or having received a response it considers that none of paragraphs (a) to (c) of subsection (3) apply, it shall cause an investigation of the matter the subject of the complaint to be carried out.
(5) Where a complaint is withdrawn by a complainant before the investigation report which relates to the complaint has been furnished by the inspector concerned pursuant to section 170(2), the Insolvency Service may proceed as if the complaint had not been withdrawn if it is satisfied that there is good and sufficient reason for so doing.
(6) Where, pursuant to subsection (5), the Insolvency Service proceeds as if a complaint had not been withdrawn, the investigation concerned shall thereupon be treated as an investigation initiated by the Insolvency Service, and the other provisions of this Act shall be construed accordingly.
(7) Where a complaint is not resolved by mediation or other informal means referred to in subsection (3)(c), the complainant may, at his or her discretion, make a fresh complaint in respect of the matter the subject of the first-mentioned complaint.”.
This amendment corrects cross-references in the section.
Amendment agreed to.
Government amendment No. 154:
In page 53, of the list of amendments made in Committee, to delete the text inserted by amendment no. 101 and substitute the following:
153.—The Courts and Court Officers Act 1995 is amended—
(a) in section 12, in the definition of “judicial office”, by inserting “, specialist judge of the Circuit Court” after “Circuit Court”,
(b) in section 16(7) (as amended by section 8 of the Courts and Court Officers Act 2002), by substituting the following paragraph for paragraph (a):
“(a) When submitting the name of a person to the Minister under this section, the Board shall indicate whether the person satisfies the requirements of—
(i) subsection (2) of section 5 (as amended by section 4 of the Courts and Court Officers Act 2002) of the Act of 1961 (in the case of an appointment to the office of ordinary judge of the Supreme Court or of ordinary judge of the High Court),
(ii) subsection (2) or (2B) of section 17 (as amended by section 149 of the Personal Insolvency Act 2012) of the Act of 1961 (in the case of an appointment to the office of judge of the Circuit Court),
(iii) subsection (4) (inserted by section 149 of the Personal Insolvency Act 2012) of section 17 of the Act of 1961 (in the case of an appointment to the office of specialist judge of the Circuit Court), or
(iv) subsection (2) or (3) of section 29 of the Act of 1961 (in the case of an appointment to the office of judge of the District Court), in respect of appointment to the judicial office for which the person wishes to be considered and the Board shall not recommend a person to the Minister under this section unless the person satisfies those requirements.”,
(c) by inserting the following after section 19:
19A.—A specialist judge of the Circuit Court shall take such course or courses of training or education, or both, as may be required by the Chief Justice or the President of the Circuit Court, at such time or times as the Chief Justice or, as the case may be, the President of the Circuit Court may specify.”
Amendment agreed to.
Government amendment No. 155:
In page 55 of the list of amendments made in Committee, to delete the text inserted by amendment no.103, and to substitute the following:
155.—Section 10 of the Courts of Justice Act 1947 is amended—
(a) in subsection (1), by deleting “by subsections (2), (3), (4), (5) and (6) of this section” and substituting “by this section”,
(b) in subsection (2), by deleting paragraph (e), and
(c) by adding the following after subsection (6):
“(8) Subsections (2), (4) and (5) shall not apply to the distribution of the work, or the despatch of the business, of the Circuit Court that is required to be done by or transacted before a specialist judge of the Circuit Court.
(9) The President of the Circuit Court may, from time to time, by order fix, in respect of any circuit the—
(a) places therein at which sittings before specialist judges are to be held,
(b) times during the year and the hours between which (which may include times and hours other than the times and hours of the sittings of the Circuit Court fixed under subsection (2)) such sittings are to be held, and, whenever such an order is in force, such sittings within that circuit shall be held—
(i) at the place fixed by the order and not elsewhere, and
(ii) at the times during the year and between the hours fixed by the order.
(10) The President of the Circuit Court may, before exercising his or her powers under subsection (9)(a) in respect of a circuit, consult the specialist judge permanently assigned to that circuit.
(11) Where 2 or more specialist judges are for the time being assigned (whether permanently or temporarily) to a particular circuit, the President of the Circuit Court, after consultation with those specialist judges, may, from time to time, allocate the business of the Circuit Court in that circuit that is required to be transacted before a specialist judge amongst those specialist judges.
(12) Where a specialist judge is for the time being assigned (whether permanently or temporarily) to a particular circuit, the President of the Circuit Court may, after consultation with that specialist judge, in respect of any business of the Circuit Court which may be transacted both before a county registrar for a county, county borough or other area within a circuit and a specialty judge assigned to that circuit, by order—
(a) direct that such business is to be transacted before a county registrar and not before a specialist judge, or
(b) allocate such business amongst the specialty judges and the county registrars concerned.
(13) Every order made under subsection (2), (9) or (12) shall, as soon as may be after it is made, be published in such manner as the President of the Circuit Court may direct.”
Amendment agreed to.
Bill, as amended, received for final consideration.
Question proposed: "That the Bill do now pass."
I thank Senators for a very constructive and interesting debate on this Bill as it has moved through all Stages. I thank them for the issues they raised and hope issues of difficulty discussed in this Chamber are now fully addressed in the content of the Bill. Bringing the Bill to a conclusion in the Seanad has been like running a marathon. This is complex legislation and we have taken up a lot of time in the Chamber but it has been time well spent. I must now return to the other House and explain why we did so much constructive business in the House and seek approval in the Dáil for the amendments now included in the Bill.
The Bill is of substantial importance in the current economic climate where so many citizens find themselves in serious financial difficulty, many through no fault of their own. The new debt resolution mechanisms provided for in the Bill give rise to a possibility of people working through their debt issues with real hope for the future. I look forward to and hope the objectives of the Bill will be fulfilled and that it will facilitate individuals who genuinely cannot pay their debts and are in major financial difficulty entering into constructive and appropriate arrangements with creditors, including financial institutions. It is vital that creditors have the fullest information available to them as to individuals' financial resources and income, assets and liabilities, and that they apply a degree of common sense and realism in any discussions that may take place with a view to addressing issues through the non-judicial debt settlement mechanism. Reforms are also being made to bankruptcy which essentially prescribe a three-year period of bankruptcy, a substantial change in our law that creates the possibility for individuals who find themselves bankrupt to rebuild their lives within a reasonable period while extending to creditors the possibility during the period of bankruptcy of recouping what can be recouped by them to meet debts that are legally and appropriately due.
I thank Senators for the substantial work they undertook on the Bill and for the very interesting contributions made in this House. I value the time we have spent dealing with the Bill.
I thank the Minister for his kind words. Today was the 90th anniversary of the first Seanad and it was noted how many amendments have been tabled in this House in that period. This Bill is a case in point, where we have made a couple of hundred amendments in the course of a comprehensive debate. The Bill is of great importance. We hope the debt resolution mechanisms will work to offer people some prospect of hope when they are in desperate straits and that it will help those who face difficulties with repayments on the family home. I have lived with this Bill since it was before the Joint Committee on Justice, Defence and Equality. That model was useful because it was important to discuss the heads of the Bill with interested groups before the Bill itself was published. I thank the Minister for how the Bill was designed as well as for its substance. The images from the debate on ornamentation will live with me for some time.
I thank the Minister and his hard working officials for their work in preparing the Bill, bringing it before the committee, the Dáil and the Seanad. It has been a long process and I hope the result of our deliberations will be an Act that will bring a degree of hope, certainty and optimism in cases where there is not at present. The debate in the Seanad showed the House at its best, with matters being thoroughly discussed in a non-partisan fashion with the interest of the people at the top of the agenda. I thank the Minister for his patience and understanding. We look forward to be Bill going back to the other House and being enacted in the near future so citizens can use its provisions allowing for a degree of economic and social progress, which is what we all hope will be the outcome of this legislation.
I join in complimenting the Minister and his officials on completing this important and comprehensive legislation. This has been a lengthy but worthwhile process and the Minister has been especially helpful on all occasions, listening carefully and responding methodically and meticulously during many hours of debate. The Bill is a timely response to the position in which we find ourselves. It is also clear that it has secured a large degree of consensus. I thank the Minister and his officials.
I echo everything that has been said by my colleagues. Mr. Joseph Spooner of the Law Reform Commission estimates that between 1995 and 2009 the ratio of household debt to income increased from 48% to 176%. This is significant and necessary social legislation, which will make a contribution towards putting together the pieces and improving the country following a series of financial disasters. It replaces bankruptcy with conciliation and arbitration. I thank the Minister for his patience and compliment him on his erudition. Senators are indebted to him for the tutorials he provided, which have substantially improved my knowledge. I wish him well in the Dáil with the amended Bill.
Question put and agreed to.
When is it proposed to sit again?
