Shatter: 'Boomtime homebuyer must not be sacrificial lamb'

on 14/09/2012 00:00:00

He warned the banks that if they did not realistically engage with new legislation on personal insolvency - designed to help debt-ridden mortgage holders reach agreements with their creditors - he will revisit the matter.

Mr Shatter told the Oireachtas select committee on justice considering the new Personal Insolvency Bill that not all creditors were evil and not all debtors were saints.

There were, he said, people with substantial debt who made very foolish decisions and people who borrowed thinking they were going to mint money.

The Government had sympathy for the group of young people who, during the boom, found themselves borrowing from financial institutions, and who are in debt through no fault of their own.

Mr Shatter said there was an issue whether debtors should enter a type of personal examinership system.

He said that when the legislation was enacted, if substantial creditors such as the financial institutions were not fully engaging in relation to debt forbearance, and in some cases debt forgiveness, it would be possible to revisit the legislation.

Mr Shatter said the ultimate test of the legislation will be seen over the first 18 months.

"If the engagement does not occur in a constructive, considered approach to those in debt the legislation can be revisited," he said.

"The banking federation is not particularly enamoured by the legislation and have no great welcome for it."

When it is enacted, he said the law was going to force a reality in relation to dealing with people who have long-term debt.

Mr Shatter said he would shortly be able to announce the name of the director designate of the Insolvency Agency, who he said would receive a salary similar to a departmental assistant secretary.

Staff will be recruited from the private sector for the new agency, but civil servants will be allowed to move to the agency as well.

* Read more:here