It offered to hit the ground running and the new Irish Government will in the near future be a hundred days in office. It is fully commited to execute a great deal of transitions and that being said maybe right now is the time to ask numerous basic questions as to exactly what it is providing in support of the ordinary citizen as distinct from what it is doing in relation to bankers, builders, NAMA and sovereign interest rates in its undoubtedly difficult efforts to meet its committed EU and IMF performance goals.
Might it present a schedule for the publication of its legislative programme pertaining to personal insolvency actions? We fully understand that the EU & IMF have made a deadline of March 2012 for fresh Irish personal insolvency laws to be in place. A plan of a month by month process for fast tracking the reform of bankruptcy laws and enacting new personal insolvency legislation would provide clarity for individuals.
How long will it take the Law Reform Commission (LRC) to draft legislative proposals for reform of bankruptcy law? Will the LRC need to go through the very same prolonged strategy of study, research as well as extensive consultation on bankruptcy before distributing a final document (combined with draft legislation) the way it has recently done in regard to unsecured personal debt – ‘Personal Debt Management and Debt Enforcement’, released in December 2010?
Is the government conscious that the LRC provided draft legislation called ‘Draft Insolvency Bill 2010’ as an appendix to its final document in December 2010? Could this particular legislation be fast tracked into law? So why will an incoming administration have to gradually and painstakingly ‘review’ the wonderful work completed by the LRC before deciding to propose and enact laws? Just what distinct skills is the government intending to bring to bear in such a overview, given that the deliberations of the LRC engaged extensive expertise from both the public and private sectors?
Exactly what do government ministers individually and collectively understand as ‘personal debt forgiveness’? Why should current government ministers repeat the mantra of the former discredited Fianna Fail / Greens government that government does not have the authority to ‘forgive’ the debt of individual people? Compare and contrast recent utterances from the new Minister for Jobs, Enterprise and Innovation Richard Bruton with the ones from former justice minister Dermot Ahern in this regard. Do Irish government ministers really assume that laws and regulations in other jurisdictions, for example the UK Insolvency Act 1986, were introduced illegally and unconstitutionally and that the provisions included therein in regard to Individual Voluntary Arrangements were not primarily grounded on the idea of debt forgiveness? Why should Irish law differ from our European neighbours?
What do government ministers and indeed politicians of all positions and parties understand as the risk of ‘moral hazard’, when it comes to personal debt forgiveness? Why is the concern about ‘moral hazard’ a barrier to the launching of personal insolvency legislation? Or is the wooly knowledge of the idea of ‘moral hazard’ just an excuse for inaction? Has the ‘moral hazard’ danger in Ireland been benchmarked with the risks in other countries, specially the United kingdom? If it is not considered a concern in other places, what is it about Ireland that makes ‘moral hazard’ such a much talked about difficulty for government here?
Why is the main focus in Ireland is on the business of secured personal debt (e.g. mortgages and car HP) and is significantly less preoccupied with unsecured personal debt (credit cards, overdrafts, personal loans)? The non court based debt settlement scheme mooted by the LRC would facilitate insolvent citizens to address their unguaranteed debts in a way much like the tried and tested Individual Voluntary Arrangement (IVA) structure in the United kingdom. Why not bring in this legislation now? Why the delay until March 2012, the final target time established by the EU and the IMF?
The master of the High Court, Edmund Honahan has stated his feeling that people in the Department of Finance do not have an understanding of the law (relating to insolvency) and that people in the Department of Justice do not understand economics or finance. Should this be in fact the case, what hope is there that acceptable personal debt insolvency legislation will ever see the light of day? Who’s for a Department of Insolvency with knowledge provided by both departments and from the private sector? Although there is not as yet a licensed expert insolvency qualification in Ireland chances are that the legal and accountancy disciplines have ample specialist experience to provide a strong system for the early implementation of the non court based debt settlement scheme suggested by the LRC. The LRC study in personal insolvency employed and consulted with numerous specialists from pertinent public and private sectors and yet it appears that the new government may sit on its hands until next year before enacting new personal insolvency legislation and changing bankruptcy law. Perhaps that is a little unfair after less than 100 days in office but time will tell.
Why do lenders (banks, finance houses, other creditors) chase debtors through the courts for judgments in relation to money owed which have already been written off in their books (and maybe tax writeoffs availed of) and which have no realistic prospect of being satisfied by debtors who have no assets and no significant disposable income? Do such lenders feel they have a legal or moral accountability (to their shareholders) to go after these kinds of bad debts permanently?
Why do lenders seek to register (even more) charges (often in respect of unsecured liabilities) on debtors’ property, mainly family homes, where these types of assets are usually in negative equity and have no prospect of being in positive equity in the future?
Does the new government appreciate the resource restrictions under which the Money Advice and Budgeting Service (MABS) has been operating? Though it may be undeniably performing a good job, money and manpower constraints mean that the citizen must get in line for a restricted program which basically comes down to just a initial step in personal debt management. The program is taxpayer financed and can scarcely expand or grow much more because of the government’s policy of downsizing the public service. Perhaps now could be an opportune time to encourage expertise from the private sector to provide private insolvency solutions to the public along the lines of the governed and clearly thriving IVA and Debt Management Plan (DMP) services sectors in the united kingdom.