FLAC – the Free Legal Advice Centre – has hit out at the government’s decision to defer the publication of new bankruptcy laws until the end of April.
Speaking about the decision, FLAC Director General Noeline Blackwell said that she was “deeply disappointed” with the news.
“This legislation is sorely needed to give people a proper system by which they can manage their debts. People are suffering badly under the current antiquated laws,” said Ms Blackwell.
Noting that the current delay seems to relate to problems about the incorporation of mortgage debt into a debt resolution system, FLAC warned that given the nature of the personal debt crisis in this country at this time, to ignore or try to exclude mortgage debt from a debt resolution system will make the system meaningless for many households.
FLAC warned that other possible consequences of excluding mortgage debt from personal insolvency include a surge in repossessions leading to a massive rise in the need for social housing and related supports; and a deluge of applications for bankruptcy, as people have no other alternative when their applications for debt settlement under personal insolvency legislation are rejected.
FLAC also criticised the delay in the government addressing mortgage debt.
“This government is there to be the government of the people. It must not allow banks and creditors alone to dictate the terms on which people are allowed to manage their debts and therefore manage their lives,” said Ms Blackwell.