Insolvency Bill 'not optional'

THE PERSONAL Insolvency Bill is not “some kind of a voluntary optional arrangement” for banks, Tánaiste Eamon Gilmore has said.

He said it would write into law for the first time a range of non-judicial debt-settlement arrangements which would give a reasonable prospect to people who had accumulated debts, those with mortgage debts they could not pay, as well as people in negative equity who faced the awful prospect of losing their home, of navigating and negotiating their way out of that situation.

The banks, he said, would know that as a backstop, the new completely changed personal insolvency arrangement, incorporating a reduction to three years, was in place. “For the first time since the country went into recession, individual families and households can look to a legislative basis through which they can get debt resolution,” Mr Gilmore said.

He was replying to Fianna Fáil deputy leader Éamon Ó Cuív who said that depending on the voluntary goodwill of the banks was a foolish way to go. Mr Ó Cuív suggested the Government amend the Bill to make it mandatory for the banks to engage in the process.

Mr Gilmore said borrowers would be able to negotiate debt settlement arrangements in a realistic and reasonable way.

“For the first time we now have hope for families and households in that they can see a way to working themselves out of their personal debt circumstances.”

Mr Ó Cuív said he was concerned that the proposals would leave the involvement of banks optional.

Mr Gilmore said the Government was always open to taking on board constructive suggestions from any member of the House on legislation.