Government approves proposals on debt enforcement including water charge compliance
· Civil Debt Bill to abolish imprisonment of debtors & implement recommendations of 2010 Law Reform Commission report
· Environment Legislation to strengthen regulatory regime around the payment of water charges
Wednesday 6 May 2015
The Government has today approved a joint proposal from the Minister for Justice and Equality, Ms. Frances Fitzgerald, T.D., for the drafting of the Civil Debt (Procedures) Bill, and from the Minister for Environment, Community& Local Government, Alan Kelly, T.D., for the introduction new measures for water compliance.
The proposed measures distinguish between those who can’t pay and those who won’t pay, and in the case of the latter, lay out a clear path for the recovery of civil debt, including unpaid water charges. Importantly, in line with recommendations from the Law Reform Commission, the legislation will abolish imprisonment for non payment of debt for the vast majority of debtors.
Civil Debt Procedures Bill
The proposals will implement a number of recommendations of the Law Reform Commission (LRC) in relation to the enforcement of debt. The Law Reform Commission Report published in 2010 on Personal Debt Management and Debt Enforcement made a number of recommendations for wide scale reform of the existing personal insolvency and debt enforcement regimes. Key elements of that Report were implemented through enactment of the Personal Insolvency Act 2012. The new Bill seeks to implement further recommendations of the Report aimed at enforcement and recovery of debts which could be developed to streamline the existing enforcement procedures.
Under the proposed Civil Debt (Procedures) Bill, creditors may apply to the Court for an order enabling either attachment of earnings or deductions from social welfare payments, as appropriate, for the purpose of enforcement of debt. These provisions would be subject to a number of safeguards. The Bill will also make provision to provide for the abolition of imprisonment of debtors except in the case of maintenance arising from family law proceedings.
Minister Fitzgerald said: “There is a need for a balanced approach in relation to civil debt to ensure the protection of creditor rights by making available a range of legal mechanisms which compel payment by “won’t pay” debtors who knowingly refuse to meet their obligations. At the same time the intention to abolish imprisonment is an important milestone.”
The Department of the Environment will strengthen the regulatory regime around the payment of water charges through measures not involving court proceedings.
i. The liability for the water charge will transfer automatically to an owner of a property where the owner has not provided Irish water with the necessary details in respect of a tenant.
ii. There will be a deemed obligation, in all new tenancy agreements, for the occupier to pay water charges, other than short-term lets where the landlord may retain this liability. It would already be standard in the majority of leases that tenants have responsibility for utility payments including water.
iii. There will be a further requirement for a landlord to retain a tenant deposit until the tenant provides evidence that they have paid their water charges; this is a temporary role for landlords until such time as the PRTB take over deposit protection whereby tenants will have to demonstrate that the domestic water bill is settled to recoup deposit.
iv. Furthermore there will be an obligation to confirm that water charges are paid before the completion of the sale of a dwelling to include a requirement to discharge arrears of water charges; A yearly domestic water bill represents a minor proportion of the proceeds of a house-sale
Minister Kelly said: “Everyone has to be treated the same here. We can’t have a situation where some people are paying their water charges while others simply refuse to pay. These measures are aimed at ensuring fairness in the application of water charges and will complement the Civil Debt procedures bill which will significantly reform the way all civil debt is treated in Ireland and move it way from what is a currently excessively bureaucratic procedure. ”