Government risks missing IMF deadline on insolvency law
THE Government risks missing a deadline imposed on the State as part of the EU/IMF bailout to have legislation before the Dail on personal insolvency by the beginning of next year.
The Government has admitted it has yet to agree on what is to go into such a bill, despite the Law Reform Commission presenting it with an 77-section draft bill last year.
Noeline Blackwell, head of the Free Legal Advice Centres (FLAC) lobby group, said it appeared that this much-needed legislation "was way down the list of priorities".
She said it was very unlikely the legislation would be in place this time next year, yet there was a huge need to deal with heavily indebted households.
A Personal Insolvency Bill is listed in the Government's planned legislation, but the heads of the bill have yet to be approved. Under the memorandum of understanding signed by the State with the EU/IMF, there is a commitment to present legislation by the first quarter of 2012.
The Law Reform Commission has written a draft of the bill, which it proposes would put in place a non-judicial debt settlement system for debts, other than mortgages.
If 60pc of creditors agree to a debt settlement, then some write-off of debt, and new, agreed lower payments, could be put in place, with the State setting up a debt-enforcement office to manage this. Cases involving wealthy people would still go through the courts.
Solicitor and co-author of 'Bankruptcy Law and Practice in Ireland', Bill Holohan, said such a system would actually save creditors money. This was because all debts would be dealt with at once.
A Department of Justice spokeswoman said: "The bill is planned for publication in the first quarter of 2012 as indicated in the Legislative Programme. It is not possible to say at this time what the timetable for enactment will be."