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Labour delivers on personal debt reform

Posted on June 29, 2012 at 04:42 PM

Minister Jan O'Sullivan - Minister Jan O'Sullivan at the launch of the Personal Insolvency Bill
Minister Jan O'Sullivan at the launch of the Personal Insolvency Bill

The launch of the Personal Insolvency Bill today marks another promise delivered by Labour. As committed to under the Programme for Government, the Personal Insolvency Bill offers constructive help to the many thousands of people who are struggling day to day with mortgage and personal debt.

While radically reducing the term of bankruptcy from twelve years to three, this Bill will provide for Debt Relief Notices for debts up to €20,000; and creates a Debt Settlement Arrangement and Personal Insolvency Arrangement which will allow homeowners to enter into an arrangement with banks in order to write down mortgage debt on a case by case basis. Altering the balance of powers, banks will now have to offer reasonable proposals to customers; otherwise the customer will have the option of bankruptcy.

Speaking at the launch, Minister for Housing and Planning, Jan O' Sullivan TD, said, "The economic crisis and the property collapse has severely impacted on families. This crisis is not just about loan to value ratios, or negative equity it is about homes, the cornerstone of a community. The Government's multi-faceted response will provide people the security and flexibility they need to plan their future in a stable environment".

Yesterday the Minister also launched the Mortgage to Rent scheme - an initiative targeted at those low income families whose mortgage has become unsustainable and face the threat of court proceedings and repossession. This scheme will allow a family to remain in their own home, paying rent, while ownership is transferred to an approved housing body.

"The biggest fear that families have is losing their home and the Government's package of measures is intended to ensure that families can keep their home. The mortgage to rent scheme is part of the Government's robust, multifaceted approach, which has progressed significantly today with the publication of the Personal Insolvency Bill."

Today the Minister also announced new guidelines the publication of revised Guidelines on Local Authority Mortgage Arrears. These new guidelines will provide similar options recently offered from the Central Bank to private sector lenders, and will see the creation of a standardised Mortgage Arrears Resolution Process (MARP), which will be rolled out across all Local Authority Areas across the country.

As Tánaiste Eamon Gilmore pointed out earlier this week, "There is no quick fix. There is no blanket debt forgiveness. We are putting in place options for people who can't pay their mortgages, not for those who won't pay. This is not a magic wand. But it is an important process on the path to finding solutions for this major social and economic problem."

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