Sinn Féin Finance Spokesperson Pearse Doherty TD has said the figures released by the Insolvency service showing only four deals on insolvency in cases of mortgage distress have been reached shows how the system is in need of radical overhaul.
Deputy Doherty said:
“Before the introduction of this legislation the mantra from government was that this system would be a major part of the solution to our mortgage crisis. Today we know that was blatantly untrue.
“Last April Minister Shatter informed me in a parliamentary reply that he expected up to 19,000 applications in the first 12 months under the new system. In the first 7 months only 523 applications have been made.
“Four cases involving mortgage distress have been solved through the Insolvency system. To put that into context there are 96,474 homes in mortgage arrears over 90 days.
“Clearly the system is falling far short of what the government promised it would do. It is fundamentally flawed because the banks were left with a veto over any arrangement and because access to a Personal Insolvency Practitioner is beyond the means of many.
“When this legislation was being discussed in the Dáil we recorded our opposition on the basis that the legislation left the banks with a veto over any deal. Unfortunately that flaw has torpedoed the whole system for those with mortgages. A radical overhaul is needed if struggling homeowners are to benefit from the potential of this system.
“Next Friday, Sinn Féin will bring a Bill to the Dáil strengthening the legal protection for homeowners against a bank moving to repossess their property. This amendment to the land and Conveyancing Act is clearly necessary given the failure of the Personal Insolvency Act.”
Department of Justice and Equality
Debt Resolution Processes
All Written Answers on 24 Apr 2013
Pearse Doherty (Donegal South West, Sinn Fein)
Link to this:
204. To ask the Minister for Justice and Equality if he will provide an estimate of the number of applications for personal insolvency orders, bankruptcies and debt relief notices that will be made in the State in the first 12 months after the commencement of the Personal Insolvency Act 2012. [19355/13]
Alan Shatter (Minister, Department of Justice, Equality and Defence; Dublin South, Fine Gael)
It is difficult to ascertain the likely demand on the Insolvency Service of Ireland. The tentative estimate of applications for the two main debt resolution processes - the Debt Settlement Arrangement and Personal Insolvency Arrangement - is roughly 15,000 applications plus a further 3,000 to 4,000 applications for Debt Relief Notices in the first full year. In addition, approximately 3,000 bankruptcy applications are expected during this time.