Friday 22 November 2019

Government promises measures to help distressed borrowers

Dearbhail McDonald, Aine Kerr and  Donal Donovan

THE Government yesterday promised to introduce measures to help struggling borrowers and mortgage-holders -- but refused to give details.

The measures, which exclude wholesale 'debt forgiveness', were announced following claims by High Court Master Ed Honohan that some debtors are being driven to suicide because of pressure from banks.

The Government said a series of interim measures would be introduced to help debtors.

But the Department of Justice refused to reveal details of the measures.

Justice Minister Alan Shatter said the 1988 Bankruptcy Act "does not meet the needs of modern social and economic conditions".

He insisted that specific measures were under consideration by his department.

A previous bill, which fell with the dissolution of the Fianna Fail-led coalition earlier this year, included a provision to reduce the period of bankruptcy from 12 years to six.

It is not known if this reform will be revived in the new bill.

A new personal insolvency law, which the Government is obliged to introduce under the four-year EU/IMF deal, is planned for 2012.

But charities dealing with people distressed by debt say that borrowers cannot afford to wait for up to two years.

"There are pockets of despair in homes and businesses throughout Ireland," said William Prior, founder of The Phoenix Project, a national charity that helps borrowers in distress.

"We are dealing with people who are self-harming and who have been admitted to psychiatric hospitals, others have taken their own lives. The pressures are immense and people need help now."

Yesterday, Tanaiste Eamon Gilmore said the Government regarded the issue of distressed mortgage-holders as a matter of "great urgency".

"We are very concerned about the difficulties in which mortgage-holders find themselves when these matters are brought before the courts," Mr Gilmore told the Dail.

The Tanaiste said the Government was taking account of the recommendations of the Law Reform Commission in its recent report on personal debt management and debt enforcement. That report provided an in-depth review of the personal debt regime, Mr Gilmore said.

Enterprise Minister Richard Bruton said the Government was moving to improve the situation for distressed borrowers. "The Government is committed to introducing new bankruptcy legislation and will fast track the Law Reform Commission proposals," he said.

There is already a code of conduct designed to protect borrowers, he said, but no government can announce debt forgiveness on a broad scale.

He said the Government was in favour of voluntary arrangements rather than a court-led process.

Irish Independent

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