Tuesday 25 July 2017

Power to jail debtors may end under new proposal

Irish courts may no longer have the power to jail people who won’t pay their debts, according to proposals published by the Law Reform Commission.

“The Commission recommends abolishing completely imprisonment for non-payment of debt, even for those who can pay,” according to an e-mailed statement from the group today.

“The Commission recommends that those who can pay and wilfully refuse to obey a court order should still be prosecuted but that the appropriate sanction is a community service order.”

Last year 200 people were jailed for failure to pay debts, a Law Reform Commission spokesman said, declining to be identified, in a telephone interview.

Mortgage accounts in arrears by more than 90 days rose to 5.1pc of all mortgages by the end of September from 4.6pc at the end of June, the Central Bank said November 17.

Irish property prices have fallen around 40pc since peaking in 2007 and unemployment has more than doubled in the past two years.

Debtors who are deemed to have virtually no prospect of paying back any debt could be issued with a one-off debt relief order, which would recognise the inability to pay and would mean the debt is deemed to be discharged, the commission proposes.

Debtors who can pay some of their debt could enter into a legally binding committment in which an agreed amount of debt could be paid within five years, “at the end of this, the debt would be deemed to be repaid in full.”

The Law Reform Commission is an independent body which makes recommendations for law reform in Ireland. Some 70pc of its published proposals have resulted in reforming legislation, according to its website.

Bloomberg

Promoted articles

Also in Business