The Cabinet has today approved the publication of the massive Personal Insolvency Bill that will be published on Friday.
Taoiseach Enda Kenny and Tánaiste Eamon Gilmore held a press conference this afternoon disclosing some details of the 200-page document and also announcing a meeting with the main banks tonight on the legislation.
Mr Kenny said the legislation when published would give a clear incentive for the banks to sit down with borrowers and work out bilateral agreements for the first time.
“There is probably no time since the Land War when the Irish people have felt so stressed, so anxious about their home and their family’s future security. This is why we established a special Cabinet committee on mortgage arrears which has worked intensively to develop this strategy,” he said.
The Taoiseach also confirmed the period of bankruptcy would be reduced from 12 years to three as a result of the new legislation. However, both he and the Tánaiste emphasised on several occasions the legislation would provide no easy answers or quick fix.
“We are not promising easy answers or soft options. The legacy of debt distress and mortgage arrears will not disappear overnight," Mr Gilmore said. “We are offering a fair and reasonable process to allow families deal with the problem of unsustainable mortgage debt.”
There were no new details disclosed, and neither Mr Kenny nor Mr Gilmore were willing to answer specific questions about the proposed legislation, including the matter of the banks retaining vetoes in respect of the treatment of loans. Sources later said it would be very unlikely if the banks were to be forced into relinquishing vetoes.
Mr Kenny said the detail of the Bill would be dealt with on Friday when Minister for Justice Alan Shatter, Minister for Social Protection Joan Burton and Minister of State for Housing Jan O’Sullivan would give media briefings.
He also said the Dáil would sit on Friday until the end of the Dáil term in mid July and described the Personal Insolvency Bill as a very complex piece of legislation. The Bill, which is a requirement of the agreement with Ireland’s troika of international lenders, is expected to be enacted in the autumn.
On the meeting with the banks, Mr Kenny said the four-member Economic Management Council (Minister for Finance Michael Noonan and Minister
for Public Expenditure Brendan Howlin are the other members) would meet representatives of the banks tonight.
“The Government is fulfilling its responsibilities to develop new options for people in debt distress. The banks must show the country that they can help resolve the crisis that is partly of their creation.”
The Government wants the banks to gives its proposals on how to implement some of the recommendations made by Declan Keane in his report for Government on how banks and customers might approach distressed mortgages in new ways.
“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 important progress on the path to finding solutions for this major social and economic problem,” said Mr Gilmore.
