AN action plan is being launched today to help people with major personal debt.
The 14-point Law Reform Commission (LRC) plan is being launched by Justice Minister Dermot Ahern and includes a proposal to make it mandatory for creditors to issue a warning letter before initiating court proceedings to recover their money.
The LRC will also be calling for the waiting period to be discharged from bankruptcy to be reduced from 12 years to six years or less.
In an interim report on personal debt management and debt enforcement to be published today, the LRC noted that it estimated that the ratio of household debt to disposable income had risen from 48pc in 1995 to 176pc last year.
The Central Statistics Office has also reported that one in five families have fallen into arrears on at least one of five forms of credit, which include an overdrawn bank account, an outstanding credit card balance, mortgage, rent or utility bills or other bills.
The LRC also recommends that financial advisers be given a right of participation in court proceedings.
They also believe the creation of a standard financial statement which would be recognised as an agreed and accurate method of assessing an individual's total income and outgoings would be a practical step forward.
"The standard financial statement allows both the individual and all creditors to have a complete view of what would be a realistic amount to pay in a given situation," said an LRC spokesperson.
The LRC made the statement to deal with situations where creditors do not take into account a person's total debts when assessing how much they expect them to pay.
The commission said that they were drawing a clear distinction between people who were unable to repay their debts and those who were unwilling to pay back debts.
Other recommendations suggested include the setting up of a one-stop-shop website providing comprehensive information on all consumer debt-related issues.
The report does not deal with mortgage arrears, however, because that is currently being addressed by a special group set up last February.
Minister for Justice Dermot Ahern said that he would give the LRC's recommendations early attention.