Welcome focus by Minister Ryan on individual debt

30 January 2010

The non-governmental organisation FLAC today welcomed the announcement by Minister Eamon Ryan that the government will soon establish soon an expert panel to advise it in relation to mortgage debt. It also noted that the Minister has again expressed dissatisfaction with Ireland's archaic insolvency laws.

FLAC has been campaigning for reform of Ireland's debt enforcement and insolvency laws for a number of years and issued a comprehensive report and recommendations on the topic in mid 2009. FLAC's Director General Noeline Blackwell said that "the report of the imminent establishment of the expert panel and the sense of urgency in the Minister's reported statements are welcome. Urgent action is essential, and has been necessary for some time. The situation of those who are over indebted is difficult enough without the added complication that the solutions available are entirely inadequate."

"It has been obvious for some time that a much wider range of solutions is needed and the government proposal reported by Minister Ryan may help alleviate the desperation of some people. It will be necessary that government action is swift and that the expert panel is given the resources it needs to report comprehensively and quickly," she said.

According to figures published by the Financial Regulator in December 2009, 26,271 or 3.3% of all mortgages are in arrears. Paul Joyce, FLAC Senior Policy Researcher, commented: "There are over 8,000 cases where a formal demand for the property or legal proceedings have been issued. This is very worrying at a time when interest rates are at an all-time low. These figures relate only to principal private residences or, to put it another way, to people's family homes."

Ms. Blackwell also noted that in 2008, only 8 people were adjudicated bankrupt. "This shows that the current insolvency laws do not provide a solution for the problems of the modern age at all," Ms. Blackwell said.


Editors' notes:

  1. 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.
  2. FLAC issued this press release in response to statements reported by RTE News on Sunday January 31 2010. The report can be accessed online.
  3. You can read more about FLAC's work on debt law reform.
  4. FLAC recommended a complete overhaul of debt enforcement procedures in Ireland and the introduction of debt settlement legislation in a major report in 2003. That was followed in July 2009 by a second in-depth report which explored the debtor's perspective on the enforcement process. The organisation called for a greater range of remedies to assist those who are over-indebted.
  5. You can read about FLAC's open letter to politicians calling for action on mortgage arrears from October 2009.