Debt settlement Bill to be debated in Dáil

FIANNA FÁIL has published legislative proposals to set up a debt-settlement system for distressed mortgages and other forms of…

FIANNA FÁIL has published legislative proposals to set up a debt-settlement system for distressed mortgages and other forms of personal debt.

The Debt Settlement and Mortgage Resolution Bill, published by finance spokesman Michael McGrath, will be debated in the Dáil during private members’ business next week.

Based on recommendations of the Law Reform Commission, the Bill would allow people struggling with debt apply to a newly-established debt settlement and mortgage resolution office. It will conduct a comprehensive assessment of the debtor’s financial affairs and, based on the information, a personal insolvency trustee will make proposals for restructuring the debt to the person’s creditors. If 60 per cent of creditors (in value) agree, the proposal becomes binding on all creditors.

The Bill also allows a borrower to apply for a mortgage resolution order on the family home with the office able to issue an order binding on all parties, proposing a number of options, such as an interest-only period for four years; extending the mortgage by up to 20 years; repayment holidays; and debt for equity swaps. A debtor deemed to be insolvent may also obtain a debt relief order.

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times