LAWS aimed at writing off debt for individuals and families – or a “NAMA for the people” – have been ruled out by the Justice Minister Dermot Ahern.
As new figures showed a dramatic rise in court judgments relating to debt, Mr Ahern ruled out a debt forgiveness scheme for consumers who owe money to banks.
He said debt was something owed to somebody and “the Government can’t just pass laws saying the debt isn’t there anymore.”
But Mr Ahern added that the Government will “try to ensure that there are circumstances where people will be looked at favourably.”
He was speaking at the launch of a new report, Personal Debt Management and Debt Enforcement by the Law Reform Commission (LRC), recommending a 14-point action plan to deal with the problem.
Among these is a protocol for all consumer debt cases which would make it mandatory for creditors to issue a warning letter before initiating court proceedings to recover debt.
The report notes that the ratio of household debt to disposable income has risen from 47% in 1995 to 176% last year.
But Mr Ahern said there is no body now going to jail for not paying these debts. “We are passing the Fines Bill this week and you’ll find that people for civil debt or for fines in the future, they will only go to prison as a very last resort,” he said.
The Central Statistics Office (CSO) has also reported that one in five families have fallen into arrears on at least one of five forms of credit – an overdrawn bank account, an outstanding credit card balance, mortgage, rent or utility bills and other bills or loans.
Mr Ahern said: “In fairness, when I started public life, the ESB and the various utilities were closing people’s telephone bills and ESB bills off. That doesn’t happen any more.”
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