New legislation to reform Ireland’s bankruptcy laws and assist those struggling with their mortgage repayments will be outlined in detail by senior Government Ministers this morning.
Minister for Finance Michael Noonan and Minister for Justice Alan Shatter will unveil the Personal Insolvency Bill, which will allow debtors to emerge from bankruptcy after three years rather than the current 12.
The proposed law will also include new voluntary non-judicial debt settlement systems aimed at providing alternatives to formal court insolvency, such as the introduction of a personal insolvency arrangement for the agreed settlement of both unsecured and secured debt of more than €20,000.
A Government spokesman described the Bill as “a radical set of proposals designed to tackle the issue of debt in particular forms”.
He said while it represented a “major step” in addressing the mortgage difficulties many people found themselves in, further measures would follow in this area.
According to the Irish Times, there will be a series of non-judicial elements to the Bill, aimed at providing a rebalancing of interests between lenders and borrowers. These include the introduction of a debt relief certificate to allow for the full write-off of qualifying unsecured debt up to €20,000 after a one-year moratorium period.
A debt settlement arrangement for the agreed settlement of unsecured debt of more than €20,000 will also be introduced if the Bill is enacted as proposed. The third measure, the personal insolvency arrangement, would cover mortgage debt and speculation has centred on an arrangement lasting some six or seven years in this area.
Separate proposals arising from the recent Keane Report on mortgage arrears and personal debt are expected to follow the publication of the Bill.