I am delighted to attend the launch of the Insolvency Service of Ireland Public Information Campaign. I want to extend my sincere thanks to Mr Lorcan O’Connor, Director of the Insolvency Service of Ireland, for inviting me to speak at this important event.
My colleagues in Government and I have at all times been acutely aware of the financial difficulty being experienced by tens of thousands of individuals and families across the country as a consequence of the economic downturn. I have spoken to a great many people caught in the horrific trap between income collapse and spiralling debt and often in this situation through no fault of their own. I have listened, in confidence, to their personal experiences and have heard, first hand, of their despair at not knowing where the money will come from to put food on the table, never mind how they will make the next mortgage repayment. Today, tens of thousands of people across the country are attempting to navigate, without assistance, the tight-rope of their personal finances. Today is a good day for them.
In a previous life, as a family lawyer, I dealt first hand with the realities of relationship breakdown, often as a result of financial difficulties. I am well aware of the devastating impact unsustainable personal debt can have on families and on children. Today is a good day for them.
One of the main priorities of this Government was to put in place the best solutions we could for people living under the burden of unsustainable debt. When I took office as Minister for Justice in March 2011, it was immediately clear that little work had been undertaken to reform or modernise legislation in the areas of bankruptcy and insolvency despite the enormous financial difficulties being experienced by so many in the State.
The introduction of a modern, practical and humane insolvency and bankruptcy process, through the Personal Insolvency Act, and the establishment of the Insolvency Service of Ireland, were necessary priorities in our path to recovery and growth. Today’s launch of the Public Information Campaign is another major step forward in the Government’s plan to deal with debt and to help people in distress. The three new insolvency arrangements, offered through the Insolvency Service, will be of substantial assistance to thousands of individuals and families. The new insolvency arrangements have the capacity to provide certainty for those crippled by unsustainable debt. They provide fair and equitable solutions for those who have no prospect of repaying their debt. The guidelines on reasonable expenses provide an essential defensive shield to ensure that neither financial institutions nor other creditors attempt to deprive debtors of funds they need for reasonable household and family expenditure or deprive debtors in employment from benefitting from continuing in employment where a debt settlement or personal insolvency arrangement is completed.
It is important that all households can contribute to our economic recovery and that all those presently affected by unsustainable debt have real hope for the future. Under the new arrangements, people will be given the opportunity to start again relieved of the financial pressure of unsustainable debt.
It is of central importance to this Government that, where possible, people will be able to remain in their homes and the Personal Insolvency Arrangement facilitates workable, sustainable and voluntary solutions to protect the family home. The new approach led by this Government, avoids contentious court hearings, long delays and substantial legal costs inherent in earlier approaches.
This Government is determined to ensure that assistance is targeted at those who cannot pay, as opposed to those who will not pay. People cannot expect to maintain a lifestyle which is well beyond their means and at the same time expect financial institutions to reschedule or write off outstanding debt and taxpayers to carry the burden of their doing so. It is also important to recognise that not all creditors are banks and financial institutions. Many creditors are small and medium sized businesses and individuals who frequently find themselves in financial difficulties due to the non-payment of monies properly owed to them and we should not forget that there are individuals who may have to resort to one of the debt settlement measures provided for in the Act because of the failure of others to pay for goods or services provided.
Today marks the launch of the ISI Public Information Campaign. Since Lorcan took up his position at the end of last October, he has overseen a great deal of work within a short period of time. This included setting up an implementation team to address all of the operational matters necessary for the new Service; setting up the new office; recruiting and training specialist staff; and designing and implementing the new regulatory and IT frameworks required to accept applications. Today, the dedicated ISI website and information line will go live. Trained ISI officials will begin taking calls from the public and will be able to advise people on how to apply for a debt relief solution appropriate to their situation from the three new mechanisms available.
I would like to thank Lorcan, and the staff in the Insolvency Service, for all of their hard work to date. In other jurisdictions, it has taken between two and four years to have the necessary legislation enacted and the service up and running. Given the scale and complexity of the work involved, it is a remarkable achievement that the Insolvency Service will be fully operational within one year of publishing the Personal Insolvency Bill on the 29th of June 2012. I understand the ISI will be in a position to accept applications in June this year, once the essential cohort of Personal Insolvency Practitioners has been licensed. Personal Insolvency Practitioners will play a vital role in negotiating with creditors realistic, achievable and workable solutions on behalf of their indebted clients. I also want to publicly thank Brendan MacNamara, Mary O'Regan and Tracy O'Keeffe in the Department of Justice together with those in the Attorney General's office for their expertise and work in the drafting of the insolvency legislation.
In conclusion, I would like to say the following - our objective in everything we have done in relation to debt resolution mechanisms is to help people who are in genuine financial distress, to facilitate their return to solvency, and to allow individuals and families presently sinking under the weight of unsustainable debt to restart their lives.
For individuals and families who are insolvent without any reasonable prospect of being able to repay their debts, the new Insolvency Service offers a light at the end of the tunnel. The new Service facilitates open, honest and constructive engagement and provides solutions for those crippled by debt. I encourage you all to visit the new website and read the material provided.