merrion street

Speaking today the Minister for Justice, Equality and Defence, Alan Shatter TD, said “I welcome the statement issued today by Permanent TSB confirming the bank’s commitment to applying the terms of the Personal Insolvency Act 2012 and recognising that there are circumstances in which it will be necessary for the bank to consider writing off a portion of debt for some customers.

The bank is, of course, correct in saying that the financial circumstances of each person who seeks to enter into a Personal Insolvency Arrangement will have to be individually considered and that, in each case, separate consideration will have to be given as to whether debt forbearance or some element of debt forgiveness or write off is appropriate.

I welcome the banks clarification of its position following on from the hearing that took place yesterday before the Joint Oireachtas Finance Committee. It is of crucial importance that each of our financial institutions constructively engages in the debt resolution processes that will be available under the Act in the New Year.

These processes are, of course, designed to assist individuals and families in substantial financial difficulties and essential to provide an alternative to bankruptcy for those who can’t pay as opposed to those who won’t pay. The Personal Insolvency Arrangement provides the possibility for those in significant mortgage arrears to restructure their financial obligations and retain both ownership of, and occupation in, their family homes and provides the possibility for financial institutions of recovering, over a period of years, a larger amount of the home loan than may be recoverable through a bankruptcy process.

The emphasis will, of course, be on the individual circumstances of a debtor and it is important to note and acknowledge that the legislation does not prescribe or envisage a blanket debt write off regardless of circumstances”.