Ministers sign off on debt, bankruptcy package
THE Government is expected to begin approval on a debt settlement package today, including reducing the term of bankruptcy to three years.
Ministers will discuss the keenly-anticipated Personal Insolvency Bill, designed to provide a solution to help struggling borrowers with unsustainable debt.
Bankruptcy will still remain the final option available and cases will have to go through the courts.
But the Government is planning to put three other options in place, which can be implemented outside of the courts:
*A one-year debt relief certificate to cover unsecured borrowings of up to €20,000.
* A debt settlement arrangement lasting five to six years to cover unsecured borrowing over €20,000 with secured debts excluded.
* A personal insolvency arrangement to cover both secured and unsecured debts of over €20,000.
The third option would include mortgages and last for up to seven years.
The term for bankruptcy will be reduced to three years, but it will still come with strict rules attached.
A draft of the legislation will be brought to Cabinet today by Justice Minister Alan Shatter but there may not be a final decision until next week.
Mr Shatter has promised to publish the draft of the bill next week. He said at the weekend that the draft would be published to facilitate the Joint Oireachtas Justice Committee to form a preliminary view on its contents.
The minister said that, under the bailout programme, the final draft of the bill would have to be published by the end of April.