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Debt laws will create ghettos – Honohan

The new insolvency laws could create "ghettos with nice houses" the Master of the High Court, Ed Honohan, has claimed.

He said yesterday that the case-by-case approach to insolvency was ignoring the community dimension to the problem.

"We don't have joined-up thinking on this," Mr Honohan told Marian Finucane on RTE radio yesterday.

"Nobody stood back from this and took in estates in Cork or Waterford and the large numbers of people in negative equity – where everybody will be on the breadline, with no cars, and nobody going through university. We are simply creating new ghettos with nice houses," he said.

Mr Honohan, who is a senior official of the court, said these "clusters" of debt were not considered in the legislation.

Mr Honohan also revealed that he sided with Ben Dunne on people opting to go across the border or to Britain to go bankrupt.

"I am with Ben Dunne on this – do people want to go through this hardship to hold on to their house?"

He said people have already told him in the Masters Court they "hate opening the front door" and he said that they will hate it even more if they have to live under the conditions imposed by the Insolvency Service for six years.

"If you can't go to Newry, move house," he advised.

Mr Honohan also said that many people who never had dealings with the legal system before the economic crisis will find it "traumatic" coming before the courts.

"It will be very traumatic," he said. "It is possible that the procedures of court are in breach of human rights legislation – I have referred the matter to the Human Rights Commission.".

Mr Honohan added that things could be improved if very small changes were made – such as explaining to those called before the courts what is likely to happen to them and what they can do about it.

He said the court system was "stacked against" the increasing number of lay litigants – people who can no longer pay solicitors and barristers to act for them and decided to try to fight their cases themselves.

Irish Independent