The new Personal Insolvency legislation, may be an opportunity to help families in mortgage arrears but it still leaves too much power in the hands of the banks.
This is the view of Fianna Fáil Galway East TD Micheál Kitt TD who said the recently introduced legislation “does not go far enough”.
“This is not a banking issue and the banks should not hold the balance of power,” he said. “It is a Government matter. The new Insolvency Service of Ireland needs to have the capacity to engage with families and mortgage holders and offer relevant advice, and importantly be accessible.”
Dep Kitt argues that the legislation “does nothing to break the monopoly” the banks have over borrowers and the State.
“The Bill informs us that creditors holding 65 per cent of a person’s debt must agree with the proposed debt settlement arrangement or personal insolvency arrangement,” he said.
“This changes little for mortgage holders and still places them at the mercy of the bank. It does seem that the Government’s response to the mortgage crisis is increasingly relying on the good faith of bankers. That is not what the Bill should be about.”
Dep Kitt has called for the establishment of an independent statutory non-judicial debt settlement office, where, in the event of a mortgage holders’ debt becoming unsustainable, a third party could conduct a comprehensive assessment of that person’s financial position.