On Wednesday 21 November, the Personal Insolvency Bill was debated in the Seanad. Prior to this debate, FLAC (Free Legal Advice Centres) presented its assessment of the Bill to Oireachtas members and staff.
FLAC Senior Policy Researcher, Paul Joyce, said the Bill was going before the Seanad with a number of flaws intact. “Firstly, there is the creditor veto – despite outcry from many quarters, lenders still have the final say on any debt management proposals from consumers, with no independent arbiter to assess whether those proposals are reasonable or not. Second, there is the overly complex process that the Bill offers to insolvent consumers. Thirdly, there are no guidelines on what minimum income people will be allowed to retain to live in dignity.”
“As 2012 draws to a close, we still do not know which lender is offering what form of long-term forbearance on mortgage debt to borrowers in arrears, but we do know that the financial advice that will be available to consider these proposals will be limited. According to reports, there has only been one successful mortgage-to-rent case since that scheme was formally announced in June 2012, and although the Personal Insolvency Bill will soon be enacted, it will depend largely upon creditor approval of debtor plans to be effective,” said Mr Joyce.
FLAC suggested specific amendments to the Bill and is hopeful that some changes can be made to make the new law more effective for consumers.
During Wednesday’s debate in the Seanad a number of Senators, including Senator Zappone, Senator Ivana Bacik, Senator Lorraine Higgins and Senator David Norris, took the opportunity to show their support for FLAC’s proposals.
The Personal Insolvency Bill 2012 will go forward to the committee stage next week.