Flac welcomes Insolvency Bill


The draft Insolvency Bill is a "significant advance" toward addressing the problems of indebted households, the Free Legal Advice Centres organisation (Flac) has said.

It added  the proposed legislation had the capacity to make a significant improvement for those who are currently struggling with debt.

Noeline Blackwell, director of the organisation, said the legislation was much more comprehensive than anything that currently exists. She welcomed the provisions that take account of the need for people to maintain a minimum income, as well as the provisions that aim to ensure not every serious debt would result in bankruptcy and the loss of the family home.

“Flac remains concerned at the level of power that remains vested in creditors to approve plans proposed by debtors,” she said.

Ms Blackwell also welcomed that the scheme would be debated in the Oireachtas before the final text was settled. And she said Flac would be making further comment following “more detailed analysis of the complex text”.

The Irish Banking Federation said it would carefully examine the proposed legislation over the coming days and raised concerns about striking “the appropriate balance” between the interests of debtors and creditors.

It said a distinction should be drawn between the borrower with sustainable debt over the long term and the borrower with unsustainable debt. And there should be “clear evidence of good faith by the borrower” in prior engagement before entering the personal insolvency process.

It also said each borrower’s situation should be assessed “on a case-by-case basis”.

The federation said its members would make submissions to Minister for Justice Alan Shatter about the legislation and, in the meantime, would “remain committed to working with customers” to help manage mortgage arrears and, wherever possible, keep people in their homes.