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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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(Speaker Continuing)

[Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn] Will he at least offer an assurance that he will review these matters in the near future, in the context of his ministerial rights under the legislation?

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter I did not say that I regarded a car as a luxury. I merely observed that the view is taken in other jurisdictions that where a person is in serious debt and that debt is to be written off, it is not reasonable that the individual should continue to run a car. It is not merely the question of excluding the car as an asset of value; consideration is also given to all of the inherent expenses involved in keeping a car on the road.

Northern Ireland is as much a rural community as the Republic of Ireland, so we should not look in two opposite directions on exactly the same issue. Whatever the difference in vehicle registration tax as between the two jurisdictions, the Deputy cannot seriously suggest that a car valued at £1,000 in the North is of necessity far superior to any vehicle one might purchase for €2,000 in the Republic. The Deputy knows that is a nonsensical claim. In fact, a car valued at €2,000 in this State will invariably be in better condition than a car valued at only £1,000 in Northern Ireland. Moreover, the Deputy's party was satisfied with a valuation of £1,000 being included in the legislation enacted in the North.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn This is straw man stuff.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter It is the reality. In the context of insolvency legislation in Northern Ireland, there was no issue for Sinn Féin in fixing a threshold of £1,000 on the value of a vehicle which can be exempted from the asset base for the purpose of determining whether an individual will qualify for a debt resolution mechanism similar to our debt relief notice.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn Bankruptcy is a different matter in the North, however, given that it applies for a much shorter period.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter We are providing greater relief in the Republic for individuals who are in debt. In any case, no matter what figure I put on it, the Deputy would seek to cap it.

  In regard to the jewellery issue, it was like pulling teeth when I asked Deputies opposite to indicate what value they had in mind. To use a good old Yiddish-American term, everybody looked at me and stayed schtum for quite a long time.

Deputy Niall Collins: Information on Niall Collins Zoom on Niall Collins The Minister does not realise that we know he knows it all.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter When the tooth was finally loosened and a member of the Opposition suggested a figure of €500, there was furious nodding in my direction from that side of the House.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn It was nervousness.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter There was not a single dissenter. Even Deputy Michael Healy-Rae did not dissent because he did not have a figure in mind himself.

I made my misgivings regarding this provision clear when we discussed it on Committee Stage. As I recall, I pointed out both in this and the other House that in practice, in the 30 or so instances of bankruptcy that are decided in this country every year, creditors do not ask about the bankrupt individual's wedding ring. It is not part of the conversation and is not perceived as an issue creditors would wish to address. In the case of a husband who becomes insolvent, for example, it is not the case that his wife's wedding ring will be brought into play. Where an individual becomes insolvent, his or her personal assets are normally part of the consideration, but I am not aware of the jewellery issue having created a problem for anybody in reality. This particular issue has grown legs because it is all very interesting and makes a great newspaper headline. I acceded to the wishes of Deputies to designate one item of personal jewellery - which does not have to be ceremonial - as exempt from the consideration of a person's assets. I continue to have misgivings that this measure might actually encourage creditors to seek valuations in future in circumstances where they would not heretofore have approached the issue at all. In other words, it is my concern that we are not necessarily travelling a route that will be helpful to individuals in serious debt who resort to this particular debt resolution mechanism.

To be clear, my view on this does not come from any ideological perspective, and I have huge sympathy for individuals who find themselves in serious debt. This legislation is about introducing mechanisms to assist people in debt to work their way through it and to facilitate that debt being written off. As it stands, there is no statutory mechanism whereby a person in debt can, without going into bankruptcy, have that debt or some portion of it written off. When this legislation is enacted, we will have, under the debt relief notice, the possibility of €20,000 of debt being written off within a short number of years, after which individuals can get on with their lives. Creditors, no matter how meritorious, will effectively be burnt in this situation. In fact, they may end up getting absolutely nothing while the debtor walks away. This will be of considerable assistance to people with very limited assets and income who made financial mistakes. It is important to bear in mind that not everybody is a victim here. Indeed some of those who benefit will have arrived in their predicament simply by spending money they did not have or spending it unwisely. As a consequence, creditors who might, from the best of motives, have given these people credit will get burnt. We must be balanced in this regard.

As I said, we have included, on the urging of Deputies opposite and their colleagues in the Seanad, a provision which exempts jewellery up to a particular value from being counted as an asset in the context of the debt relief notice mechanism. The measure has been deliberately designed, with provision for the amount to be amended by way of regulation, to ensure we can keep a watchful brief on how it works in practice. This was done for a series of reasons. It is important, for example, when financial limits are set in primary legislation, where it is appropriate to do so, that provision is made to deal with issues of inflation.

I cannot go any further than that on this issue. I reiterate my reservations regarding the inclusion of the measure. I remain of the view that in a broad range of circumstances in which people are in financial difficulty, creditors would not seek to pursue this issue at all. Unfortunately, however, it seems to be the only aspect of the legislation in which the media were interested. If a person has an item of personal jewellery worth hundreds of thousands of euro - before Deputy Healy-Rae shouts at me that nobody has such items of jewellery, I challenge him-----

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae Only somebody like the Minister.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter I wish the Deputy would not be always so personal. It is not necessary to get a headline to be either abusive or personal. He, however, cannot resist taking that approach every time he comes into the House.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae It was the Minister who got personal.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan The Deputy had his opportunity to speak. He must remain silent while the Minister replies.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter The Deputy cannot resist such outbursts because they might get him a headline.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae The Minister started it and he knows he started it. If he cannot take it, he should not give it out.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan This is not a parish pump. I ask the Deputy to have regard for the House.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter It is unfortunate that we were having a serious debate in this House until Deputy Healy-Rae decided to pop up to address the jewellery issue. He has made no contribution of any description to the rest of the legislation.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae The Minister is wrong again.

Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter Nor has he contributed to any of the serious engagement which resulted in major amendments to the Bill. It is unfortunate that it is this particular issue, as opposed to the very substantial measures that are designed to be of genuine assistance to persons in debt, which catches a headline.

Returning to the car valuation, in the context of this issue not being addressed in certain jurisdictions and in the context of the value that is attached in similar circumstances in adjacent jurisdictions, I am of the view that increasing the threshold from €1,200 to €2,000 is appropriate. An increase of €3,000, however, is a step too far in the context of the balance that must be fairly struck in the interests of creditors. Again, this is an issue, because it can be dealt with by way of regulation, that is open to review. I do not want to be misunderstood in this regard.


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