Stephen Donnelly TD has welcomed the announcement by the Justice Committee that it wants to see greater protection for family homes enshrined in the new Personal Insolvency Bill.
The Justice Committee has made its recommendation to the Minister for Justice in its report, published today, Report on hearings in relation to the Scheme of the Personal Insolvency Bill.
The committee builds on the earlier Family Home Protection Bill, proposed by Stephen Donnelly TD in February, to recommend that the Minister consider giving judges discretion to refuse reposession orders “in order to encourage reasonable and fair behaviour on the part of the lenders”.
“I’m delighted that the Justice Committee has recommended that judges be given discretion in cases of repossession of family homes,” said Stephen Donnelly.
“Such a strong endorsement from the Justice Committee is a strong signal from across the political spectrum that things need to change.
“The mortgage crisis, with unprecedented numbers of people in arrears and in massive negative equity, means that homes are under threat from banks seeking repossession. There is a great imbalance in power between the banks and mortgage holders at present, and this will help in the vital task of rebalancing that.
“It will help individuals and families in Wicklow and across Ireland who are struggling to survive the economic crisis.
“More generally, it would help ensure that decisions in the courts are aligned to the welfare of the people as a whole, by recognising that the public good is not served by large-scale repossessions and a consequent rise in demand for social housing, and that the economic good is better served by more stability in home ownership.
“Granting judges this discretion would provide a vital complement to measures already in the scheme of the Personal Insolvency Bill. It would stengthen the Personal Insolvency Arrangement measures, by providing an additional incentive for the lenders to cooperate with that process.”
The relevant section from the report follows below.
Protection of the Family Home
The Committee was strongly of the view that the family home should be protected in any insolvency arrangement. In making insolvency arrangements, the family home should be handled separately to other properties such as investment properties or holiday homes.
It was submitted to the Committee that, currently when Judge hears a repossession case, where the borrower is in default, the Judge has no discretion in relation to the granting of an order of repossession in favour of the lender. The submission proposed that Judges, in very specific circumstances, have discretion to refuse possession in order to encourage reasonable and fair behaviour on the part of the lenders.
The Committee recommends that the Minister examine the possibility of including such a provision in legislation.