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Personal Insolvency Bil 2012: From the Seanad (Resumed) (Continued)

Wednesday, 19 December 2012

Dáil Éireann Debate
Vol. 787 No. 4

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  5 o’clock

(Speaker Continuing)

[Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter] I am advised by Parliamentary Counsel that the matter can be left to the provisions of the Consumer Credit Act 1995 and there is no requirement for an explicit provision in the Bill.

Amendment No. 31 is in response to concerns raised by Deputies and Senators on items of personal jewellery. Deputies will be aware that setting a value for such items is difficult and invidious to a degree. I am now providing an exemption from the asset test of €750 for one item of personal jewellery, provided the application does not seek to settle the purchase cost of the item as a qualifying debt. The Minister may, by regulation, review the amount of the value of the item.

I listened to Deputy Mac Lochlainn's contribution on this matter, on which I recall there was an inordinate focus in the House previously. I note this particular issue attracted the attention of Deputy Healy-Rae who has not exactly been engaged in the heavy lifting in the discussion of the details of the legislation. It is, however, an issue that is always good for a headline. No matter what figure was included in the Bill, Deputies would have tried to raise it. I am sure Deputy Niall Collins will correct me if I am wrong but it is my recollection that it was in an exchange with him or his colleague, Deputy Calleary, that a figure of €500 was suggested to me.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn Deputy Stephen Donnelly suggested the figure of €500.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter Somebody suggested a figure of €500. We must remember that what we are doing under the debt relief notice is allowing an individual to have €20,000 of debt written off over a period on the basis that he or she has very limited means and is incapable of paying his or her debts. I remind Deputies again that the creditors may be the local shop which, to remain open, depends on people paying their debts, the local credit union whose members, to maintain the financial viability of the credit union, require that those who borrow money pay their debts, or a local self-employed painter and decorator who did work on someone's home for two or three weeks and may be dependent on getting paid for the work he has done to feed his spouse and children. Let us be realistic about this. One cannot expect individuals who are genuinely owed money and may be placed in financial difficulty if a series of other individuals do not pay to them what they are owed for the supply of services or products to regard as acceptable that the individuals in question are permitted to retain items of substantial value. What we are doing in this area is a good deal more considerate of debtors than what is done in other jurisdictions. Deputies should be clear that no such exemption exists in any other jurisdictions. We have provided an exemption for a single item of personal jewellery of €750 and I have no doubt that if I had inserted a value of €1,500, an amendment would have been tabled proposing a value of €3,000. I cannot go any further on the issue or accept the proposed amendment.

Amendment No. 32, like the previous amendment on jewellery, recalls our debates on the valuation of the exempt motor vehicle in section 24. I remind Deputies that the-----

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn I did not realise we were discussing a series of amendments.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan I will put each amendment individually.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter We are taking the amendments together. On the exempt motor vehicle, I believe a vehicle with a value of £1,000 is exempt under a similar debt mechanism in Northern Ireland. The relevant legislation was enacted in Northern Ireland in 2011 and Sinn Féin was part of the legislative process. We originally proposed a figure of €1,200 but I undertook to give consideration to Deputies' comments on the issue, including with regard to the safety of vehicles and a range of other matters. Having given the matter consideration, we have increased the value to €2,000. This refers to an exempt motor vehicle that is not included as part of a debtor's assets. It must be recalled that the debtor may keep the vehicle while having €20,000 of debt wiped out. There are some creditors who will regard it as entirely unreasonable that someone should retain a motor vehicle valued at €2,000 in circumstances where they will not be paid anything in the event that the debtor owes them €2,000. There has to be balance in this matter. The exemption is subject to the application not seeking to settle the purchase cost of the item as a qualifying debt. In other words, if I have a vehicle valued at €2,000 and I owe €1,800 on the vehicle, the vehicle cannot be made exempt from the debt process in circumstances where the person who sold the vehicle or funded its acquisition is left to hang and is not being paid. That is the exception and again the Minister may, by regulation, review the amount.

I do not propose to accept Deputy Mac Lochlainn's amendment, which proposes a value of €3,000. One could conclude that we are in some kind of bidding war on this issue. Deputies should remember that for every exemption, one is dealing with creditors who may be owed small but important sums of money. Where one is dealing with reasonable living expenses, a person who cannot have a vehicle cannot drive. The reason other jurisdictions do not provide for this type of exemption is that they take the view that a car is luxury if a person owes others money. It is a luxury not only in the context of retaining the car but also given all of the expenses that have to be incurred to keep it on the road, including petrol, car insurance and tax and maintenance costs. We are doing something here that many other jurisdictions do not do. In the circumstances, the Deputy's amendment proposing to increase the value of the car cannot be accepted.

Amendment No. 39 proposes to set out more clearly the information the debtor is required to provide to the approved intermediary in support-----

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn On a point of order, would it not be more practical to dispose of each amendment before moving onto the subsequent amendment?

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter The order of the House was that all of these amendments would be taken together because they are interrelated. Obviously, Deputy Mac Lochlainn should be entitled to speak on the issue related to the value of the car. It may be helpful, therefore, to allow me to complete my contribution on this series of amendments because there is a connectivity between them all. They have been grouped for this reason and also because it facilitates discussion rather than a piecemeal debate.

  I was dealing with amendment No. 39 which proposes to set out more clearly the information the debtor is required to provide to the approved intermediary in support of his or her application for a debt relief notice. It also includes at paragraph (a)(iv) additional text which places a notice on the debtor to inform the approved intermediary as to what efforts the debtor has made to reach alternative repayment arrangements with creditors prior to seeking a full write-off in the debt relief notice. While this may not be of significant concern as such, it serves as a useful indicator and could lead to a current or future Money Advice and Budgeting Service client for a debt relief notice being potentially diverted into an acceptable repayment arrangement with creditors, thereby avoiding the process and some of its consequences. This approach would complement current MABS strengths and involvement in debt resolution.

  Amendment No. 43 is a drafting amendment to require a debtor who applies for a debt relief notice to make a statutory declaration as to the completeness and accuracy of his or her prescribed financial statement.

  Amendment No. 45 provides that an application for a debt relief notice may be withdrawn by the approved intermediary at any time prior to the issuing of a debt relief notice by the insolvency service under section 28. This potential situation is not currently addressed in this part of the Bill and is required for the avoidance of doubt.

  Amendment No. 46 proposes the amendment of section 28 to address a lacuna in the existing text. The new text makes provision for circumstances where a debt relief notice application is referred to the insolvency service but the service is dissatisfied with the application. Subsection (1)(b) provides that in such cases the service is required to inform the approved intermediary.

  Subsection (2) provides for circumstances in which the court refuses an application for a debt relief notice. Subsection (3) makes provision for the appropriate court, where it requires further information or evidence for the purpose of its arriving at a decision under subsection (2), to hold a hearing on the matter. Subsection (4) makes provision for the hearing not to be held in public unless the court decides otherwise. Subsection (5) requires the court to notify the insolvency service of its decision on the application.

  Amendment No. 47 is a drafting amendment which amends the cross-referencing in regard to core notification arising from the new text in section 28. Amendments Nos. 48 and 49 are technical drafting amendments to improve the presentation of the Bill.

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