Government cannot miss this chance to get it right on personal debt

18 November 2009

Independent legal rights body FLAC welcomed the recommendations of the Law Reform Commission on 'Reforming the Law on Personal Debt' at its conference in Dublin Castle today, hailing it as a very important step towards resolving problems of over-indebtedness in this country. However, it warned that the government must implement these proposals and examine further actions.

Addressing the conference this morning, FLAC Senior Policy Researcher Paul Joyce stressed that the Irish personal debt crisis needs more than a purely legislative approach, calling in particular for urgent government action on mortgage arrears.

"Given the breadth of problems now emerging and the massive human cost involved," he commented, "FLAC's own information and advice services are being inundated with increasingly complex calls stemming from the intersection between debt and unemployment or reduced employment."

FLAC is recommending a high-level national debt strategy that will incorporate the LRC's work as well as other initiatives. Such a strategy might include proposals such as those recommended in FLAC's latest report, To No One's Credit:

  • Changes to the system of debt enforcement, such as the ability to facilitate offers of affordable repayments at earliest possible stage, including changes to the existing Instalment Order system, which could be implemented immediately, and other measures like personal bankruptcy which require new legislation;
  • Improved access to support services (like legal aid and financial advice) and clear information for debtors (for example, on court procedures);
  • Better information gathering on debt-related proceedings and research to be done on the long term costs of over-indebtedness (such as ill health, increase in family law casework, etc);
  • An end to imprisonment in debt cases;
  • An alternative debt settlement approach to resolving problems of over-indebtedness such as FLAC's suggested model Debt Rescheduling and Mediation Service.

Paul Joyce cited the renewed Programme for Government as bringing some hope for the over-indebted, commenting that "it contains suggestions around alternatives to court action and proposes state intervention on mortgage arrears. However no further details have emerged since its release on 10 October, so it is to be hoped the budget will clarify this situation."


Editors' notes:

  1. Photos to be supplied later today by Fennell Photography through the Law Reform Commission/Eoin Quinn.
  2. FLAC (Free Legal Advice Centres) is an independent human rights organisation dedicated to the realisation of equal access to justice for all. It campaigns through advocacy, strategic litigation and authoritative analysis to contribute to the eradication of social and economic exclusion.
  3. You can read more online about FLAC's work on debt law reform.
  4. FLAC addressed an open letter to TDs and senators on mortgage arrears in October.
  5. The latest copy of FLAC's newsletter is available online in PDF format.
  6. The Law Reform Commission published its consultation paper on Personal Debt Management and Debt Enforcement in September (see also FLAC comment).
  7. FLAC recommended a complete overhaul of debt enforcement procedures in Ireland and the introduction of debt settlement legislation in a major report in 2003 (An End based on Means). That was followed in July 2009 by a second in-depth report which explored the debtor's perspective on the enforcement process (To No One's Credit). The organisation called for a greater range of remedies to assist those who are over-indebted.