Bankruptcy duration could be reduced further - Joan Burton

Tánaiste Joan Burton has called for the bankruptcy period of three years to be reviewed with the possibility of reducing it further.

But she ruled out removal of the banks’ veto in cases of mortgage distress as Sinn Féin deputy leader Mary Lou McDonald highlighted that more than 100,000 homes were subject to imminent repossession.

Bankruptcy was reduced by the Government from 12 years to three and Ms Burton said there “may be ....a case for reducing it even further” to bring debtor and lender together to reach workable solutions for families in mortgage distress.

Ms McDonald told the Dáil there was a ten-fold increase in the number of mortgage cases before the courts since 2013.

Referring to the 100,000 homes facing imminent repossession, Ms McDonald said “that is 100,000 individuals and families under threat of homelessness”.

She asked Ms Burton if the Government now accepted that “your response to the mortgage crisis has failed”.

The Dublin Central TD said: “When you passed the Insolvency Act in 2012 we warned that giving the banks a veto was a mistake. We were right. When you passed the Land Conveyancing Act in 2013 we told you this would lead to an explosion of repossession cases. We were right on that too.”

She called on the Tánaiste to revisit the legislation and to remove the banks’ veto.

But Ms Burton said “there is no proposal to review that legislation”.

The Tánaiste told the House “the important thing is that we do have banks which function properly as banks and which lend credit.

“You have to have balance and I presume Sinn Féin would want functioning banks that can lend credit.”

In the six main banks the number of arrears in excess of 90 has fallen by over 15,000 when compared to start of 2014.

“This is a process that has to be worked through. To get any settlement you have to have engagement between debtor and lender.”