Solutions to debt crisis could be within government’s grasp

29 April 2009

But it needs to focus on borrowers in trouble, not just banks, says FLAC

When it comes to the debt crisis facing the country, the government should be working at least as hard for borrowers in trouble as it has for those who lent recklessly during the boom years - and there are some immediate steps it can take, an Oireachtas committee heard today (29 April 2009).

Noting an almost five-fold increase in the number of calls on debt to its legal information line, legal rights organisation FLAC (Free Legal Advice Centres) told the Joint Oireachtas Committee on Social and Family Affairs that remedial action could be taken quickly to counter the growing legal consequences of personal over-indebtedness.

FLAC was one of 5 groups invited to address the committee on the levels and trends of personal debt in Ireland. FLAC's Senior Policy Researcher, Paul Joyce explained that "while the extent of the problem may be relatively obvious, devising solutions or strategies to cope with it at a time of cuts in public expenditure is much more difficult. However, FLAC believes that there are ways to alleviate problems which will arise from over-indebtedness."

The organisation's Director General Noeline Blackwell, who was also briefing the Committee said "while the government continues its work to secure the banks, there should be balancing measures to give at least equal protection to the growing numbers of those at risk of over-indebtedness".

FLAC's suggested short-term solutions include a new code of conduct on debt arrears. This would cover all communications between debt collectors and those in debt and would include alternatives to legal proceedings. Further, the government's own review of the Mortgage Interest Supplement should take into account the effect on borrowers of reckless lending and should aim at keeping borrowers in their homes.

FLAC's long-standing campaigns to provide legal aid for those in debt and to end imprisonment for debtors were also among the proposals.


  1. You can read the full text of the submission to the Joint Oireachtas Committee on Social and Family Affairs (29 April 2009) in our policy section.
  2. FLAC has prepared a policy briefing document in response to the Financial Regulator's Code of Conduct on Mortgage Arrears (issued 13 Feb 2009).
  3. You can also download FLAC's submission to the Financial Regulator on the draft code (Jan 09).
  4. You can also read an earlier FLAC press release summarising the limitations of the government's proposals (Feb 09).