Consumer allowed to write down mortgage debt as part of new Insolvency Bill
SOME consumers will be allowed to write down mortgage debt as part of new Government plans to deal with insolvency.
It has approved the publication of the Personal Insolvency Bill which will also involve non-judicial debt settlement systems.
Consumer deals will need a majority of creditors such as banks to agree deals on a case-by-case basis.
And these settlements would be non judicial arrangements.
The deal, which are subject to conditions, include:
- Debt Relief Certificates allowing for a full write-off of qualifying unsecured debt up to €20,000, after a one-year moratorium period;
- Debt Settlement Arrangements for the agreed settlement of unsecured debt of €20,001 and over;
- And Personal Insolvency Arrangements for the agreed settlement of both secured and unsecured debt of €20,001 and over.
Announcing the plans, Justice Minister Alan Shatter said the moves are necessary to "address the financial difficulties of general insolvency; mortgage debt and negative equity."