Politics

Coalition to unveil new mortgage arrears measures in April

Enda Kenny says reduction in bankruptcy term from three years to one to be considered

Taoiseach Enda Kenny and Tánaiste and Minister for Social Protection Joan Burton at a press conference to mark the Fine Gael/Labour Party Coalition’s fourth year in office on March 10th, 2015. Photograph: Eric Luke/The Irish Times
Taoiseach Enda Kenny and Tánaiste and Minister for Social Protection Joan Burton at a press conference to mark the Fine Gael/Labour Party Coalition’s fourth year in office on March 10th, 2015. Photograph: Eric Luke/The Irish Times
Fiach Kelly
Tue Mar 10 2015 - 15:18

A push to have the term of bankruptcy reduced from three years to one as part of Coalition efforts to tackle the mortgage arrears crisis is likely to meet resistance from the Department of Finance.

Taoiseach Enda Kenny and Tánaiste Joan Burton yesterday discussed the issue, which is becoming a growing political problem, at their weekly one-on-one meeting before Cabinet.

Speaking afterwards, Mr Kenny said the Government would unveil a new set of measures to tackle the mortgage arrears crisis next month, probably in advance of the spring statement, and held out the possibility of introducing new legislation.

Ms Burton again emphasised a Labour Party proposal to reduce the term of bankruptcy from three years to one, which Mr Kenny also said would be considered in the coming weeks.

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Labour TD Willie Penrose is tabling his Bill proposing such a reduction in the Dáil today.

“It is something we can consider,” the Taoiseach said. “I know Deputy Penrose has tabled a Bill on this.

“Obviously it might spur the banks on to a more expeditious decision. The banks don’t get anything, or very little, in the case of bankruptcy.”

However, some in Fine Gael are not as enthusiastic as Labour about the measure and maintain it will not have a substantial effect on the numbers in mortgage arrears.

Sources said there was particular resistance to the idea in the Department of Finance and claimed while bankruptcy provided leverage with the banks, it was not a solution.

Many would lose their home in a bankruptcy, it is claimed.

Mr Kenny said a review of the current insolvency system and the implementation of the Central Bank’s mortgage arrears targets were nearing completion and a new set of measures would be announced in April “to focus in particular on the still unacceptably large numbers of families in long-term mortgage arrears now facing repossession of their homes”.

Options and solutions

“It is about giving people the greatest number of options to come to a solution,” Mr Kenny said.

Far too many mortgage arrears cases had ended up before the courts and should have been solved by earlier arrangements between borrowers and their banks, he added.

The areas under consideration for the mortgage arrears package include increasing awareness of the Insolvency Service of Ireland (ISI) and an audit of the quality of debt deals being recommended by Personal Insolvency Practitioners (PIPs), the Taoiseach added.

One of the considerations include the publication of proposed settlements between borrowers and banks, which sources said could be used in any future court action.