Monday 26 September 2016

Kenny plays down Labour calls for cut in bankruptcy term

Daniel McConnell, Niall O'Connor and Caroline Crawford

Published 18/04/2015 | 02:30

Mr Kenny said Labour's proposal to reduce the term from three years to one is still under consideration - but that it is not a priority for the Government
Mr Kenny said Labour's proposal to reduce the term from three years to one is still under consideration - but that it is not a priority for the Government

TAOISEACH Enda Kenny has played down the need to slash the maximum bankruptcy term in a move that will unnerve Labour Party TDs.

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Mr Kenny said Labour's proposal to reduce the term from three years to one is still under consideration - but that it is not a priority for the Government. His remarks came as Transport Minister Paschal Donohoe said the current term "strikes a good balance".

Mr Donohoe appeared to pour cold water on the proposals, which have also been met with resistance from the Department of Finance.

He said the workings of the current three-year term should be examined, but added: "I believe the bankruptcy legislation we have in place at the moment does strike a good balance."

The proposal to reduce the term has secured unanimous support from Labour - but Fine Gael sources say it would have little economic benefit.

Longford/Westmeath TD Willie Penrose, who proposed the bill, said reducing the term was a "red-line issue" for him.

"Just because an idea doesn't come from the right-wing ideological think-tank of Fine Gael, doesn't mean it should be dismissed," he told the Irish Independent.

Labour chairman Jack Wall said it had support "from top to bottom" within the party.

But speaking in Mayo, the Taoiseach said the Government was prioritising a series of measures aimed at helping people in arrears.

"Bankruptcy as an issue in itself leads to a very high percentage of repossessions of houses. The bill wasn't objected to at second stage but it's not actually a central part of the mortgage distress relief options that Government are considering," Mr Kenny said.

But the Taoiseach did not rule out Mr Penrose's proposals, adding that the Department of Finance was examining what sort of approach to take.

He said the term had already been reduced from 12 years to three.

"The issue here is that the number of years was reduced from 12 down to three and there wasn't any great disagreement about that. Obviously, that's only in operation for a short time but about 70pc of bankruptcies end up in repossession of the houses so it's not a Government policy or priority."

Mr Kenny added: "Obviously, what we want is that people can keep their homes in the vast majority of circumstances.

"But it's an issue that will be considered in the context of the response by Government centrally to deal with mortgage distress with a number of options and, as an amended issue, the question of bankruptcy."

Irish Independent

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