Urgent bill
It removes the gateway condition that mortgage arrears must predate 1 January 2015.
The minister said yesterday: “This short but urgent bill tackles a number of issues in existing legislation. In the context of the current pandemic, these problems risk denying homeowners in difficulty the protection afforded by the personal insolvency acts if they are struggling to pay what they owe.
“The Personal Insolvency Amendment Act 2015 introduced a key protection for insolvent homeowners who were struggling to pay their mortgage arrears.
“It allowed them the right to seek review by a court if their mortgage lender or other creditors refused a reasonable proposal for a personal insolvency arrangement.
Arrears
“However, that protection currently only applies to home-mortgage arrears dating from before January 1 2015.
“My new bill will remove the condition that mortgage arrears must predate January 1, 2015.”
The minister said she wanted to avoid a post-COVID scenario of an insolvent person in home-mortgage arrears being shut out from accessing vital court protection.
“This is the first delivery on our Programme for Government commitment to introduce necessary reforms to our personal insolvency legislation.
“A second, wider Personal Insolvency Bill is being finalised. This will implement further important changes arising from the statutory review of the personal insolvency acts, including making the process more streamlined and more effective,” she said.
The minister said that the bill was a priority for the autumn sitting of the Dáil, and was hopeful of cross-party Oireachtas support.
Obstacle
The new legislation will also remove an obstacle for an insolvent person with very little income or assets to resolve their debts by means of a Debt Relief Notice (DRN), by adjusting the debt ceiling from €400 to €1,500.
It also removes the obstacle for recipients of lump-sum payments, such as fuel allowance or carer’s support grant, to apply for a DRN.
The bill makes a range of procedural changes to allow for required advisory meetings between a debtor and their financial adviser to take place remotely.