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Mortgage debt scheme 'leaves power with banks'

PLANS for struggling homeowners to give up their homes and get some of the balance written off once the house is sold have been condemned as too favourable to the banks.

The debt deal would make people more inclined to go to the courts to declare bankruptcy, Paul Joyce of the Free Legal Advice Centres said.

Justice Minister Alan Shatter is considering plans that will see banks take ownership of homes of those unable to make repayments.

The new debt settlement scheme will not be a debt "free-for-all" as those who tap into it will lose their homes and still have to make repayments based on what they can now afford for between five and seven years.

But Mr Joyce said the arrangements being considered were too bank-friendly, adding: "This still leaves the balance of power with the banks."

Irish Independent