Chance to end banks' hold on borrowers lost, says FF
POLITICAL REACTION:THE BANKS should not be allowed to dictate progress in addressing personal insolvency, Fianna Fáil justice spokesman Dara Calleary said.
The Mayo TD said the new Personal Insolvency Bill was a major opportunity to address the debt crisis facing thousands of people, but the legislation was overdue.
“There is a unique opportunity for the Government to break the hold the banks have over borrowers and the State, but on first reading this opportunity appears to have been missed.
“The Bill as published requires that creditors holding 65 per cent of a person’s debt agree with the proposed debt settlement arrangement or personal insolvency arrangement. For the vast majority of people, this will mean their bank is still in control.”
He added: “Our view is that, where a person’s total debt level is clearly unsustainable, the best way of dealing with that is through a comprehensive assessment of that person’s financial position by an independent statutory non-judicial debt settlement office.”
Sinn Féin finance spokesman Pearse Doherty welcomed the legislation but added it was a disappointment to the thousands of families in mortgage distress who were eagerly awaiting it.
“When the scheme of the Bill was published we said that it was essential that the proposed insolvency service be independent and that a more humane approach to bankruptcy was needed.
“It is a bitter disappointment to find that for the majority of families that are in mortgage distress, the Bill provides for the banks having complete power in relation to personal insolvency arrangements.
“Sinn Féin had called for an independent agency empowered to enforce legally binding settlements on debtor and creditor. The only other option open to people in serious arrears is bankruptcy.”
Patrick Nulty, the TD who lost the Labour Party whip last year, said the Bill was “an entirely insufficient response to the crisis of mortgage arrears”.
He added: “The provision to issue debt relief notices to permit the write-off of qualifying debts of not more than €20,000 may assist families struggling with debts below this amount. This is a very welcome measure. However one of the main provisions of the Bill – debt settlement arrangements – will not help thousands of families with serious mortgage arrears.”
Mr Nulty said: “This Bill, while providing some positives for families struggling with debt, clearly favours the rights of creditors, banks and lending institutions. A better balance must be struck.
He called for “an independent and binding mortgage arrears debt-resolution process”.