Fianna Fáil Sligo-Leitrim TD Marc MacSharry has described the Personal Insolvency Act as not fit for purpose. New figures revealed to Fianna Fáil reveal that just 4 review applications were approved by Insolvency Service of Ireland (ISI) since it was granted limited powers last year to overturn a bank veto on a proposed settlement with a creditor.
Deputy MacSharry commented, “When the original insolvency legislation was passed, Fianna Fáil warned the government that it would not work as it gave the banks the power to veto a proposed restructuring. After 4 years of inaction and the Government consistently stating that such a plan would be unconstitutional, Fine Gael and Labour finally caved in to pressure and partially removed the veto last year.
“However it is now clear that the 2015 Personal Insolvency Act is not living up to expectations as out of 46 review applications notified to the ISI only a handful have been completed.
“The new Dáil will have to address this issue again. It is my view that the under-utilised infrastructure of the insolvency regime should be adapted to allow for a restructuring arrangement solely in respect of the family home. The State should also set up a parallel system of state and creditor funded insolvency practitioners. These would take on cases where the debtor’s payment capacity is so impaired that existing Pips are unwilling to do so.
“In situations where a split mortgage has been entered in to there is a very strong case for requiring that the bank in question apply a zero interest rate to the warehoused portion of the loan.
“Fianna Fáil will be bringing forward legislation to ensure that family homes are protected. I look forward to this issue being brought to the floor of the Dáil for discussion. There is an onus on every party to bring forward practical measures to address the problem of arrears that has been allowed to remain unresolved for far too long,” concluded Deputy MacSharry.