Insolvency Bill Will Not Be Altered to Help Householders despite Pleas

Article excerpt

Byline: John Lee political editor

THE Government has rejected pleas to water down its legislation and enable householders to challenge the banks' effective veto on personal insolvency applications.

The legislation - a key part of the Coalition's approach to the debt crisis affecting tens of thousands of households - will go ahead as planned, and is expected to be introduced before Christmas, it was admitted last night.

The Insolvency Bill has been heavily criticised by the Opposition because it requires a person in debt to seek the agreement of 65% of creditors before they can apply for personal insolvency.

However, with the vast majority of debt held by borrowers being mortgage debt, this means that the banks have an effective veto on personal insolvency applications.

The admission comes just days after the Secretary General of the Department of Finance, John Moran, called on the financial sector to write off the debt of those with a genuine inability to pay.

But last night senior sources at the Department of Finance insisted that customers would have to rely on the Insolvency Bill in negotiating their debt with the banks.

And they added that if there was a problem with the legislation, which is at the final report stage in the Dail, it would have to be challenged in the courts. …