New laws will remove banks' veto on insolvency agreements

New laws later this year are set to stop banks from being able to stop mortgage holders from entering an insolvency arrangement.

The Minister for Finance, Michael Noonan, has given the clearest hint yet that a new authority will be set up to remove the veto from banks.

New laws will remove banks' veto on insolvency agreements

The move follows complaints from opposition TDs that banks have been using their veto to stop mortgage customers from entering an insolvency process to escape some of their debts.

Noonan told the Dáil that the Government now accepts the system needs reform, and that it will be changed soon.

"Nobody has a monopoly on knowledge about how to resolve this. It is proving very difficult, both in Ireland and internationally," he said.

"When [people] lose their jobs and they get into arrears, they don't have the wherewithal to service their mortgage."

"You have to come up with solutions … but it is the policy of the Government that people would remain in their own homes."

Opposition parties and groups supporting people in arrears say banks should not be able to block a struggling mortgage holder from going into an insolvency process.

David Hall, Chief Executive of the Irish Mortgage Holders Association, said most of those in arrears are struggling with various debts, not just mortgages.

"There is going to be no magic bullet," he said. "The Government, to be fair, actually have their eye on the ball in one respect - housing is actually the biggest challenge in all this mess.

"[However], of the hundreds of people that might be in difficulty at the moment, 30% will only be ever eligible for an insolvency arrangement.

"70% have a far bigger problem on their hands."


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