Cutting the period of bankruptcy back to a single year looks on the cards after Labour united around the move.
A meeting of the party’s TDs and senators unanimously endorsed proposed legislation by Willie Penrose to bring in the reform.
However, tensions on liberalising abortion laws came to the fore again as a backbencher broke ranks on legislation for fatal foetal abnormality pregnancies.
Labour will now push the one-year bankruptcy term with Fine Gael after a review of the much-criticised insolvency laws was launched by the Government.
Tánaiste Joan Burton has said the change was needed to force banks to cut deals with people in mortgage distress.
Meanwhile, Clare TD Michael McNamara told the meeting of Labour TDs that he is to propose legislation today to allow for abortions in some circumstances.
Mr McNamara said the bill includes a definition of fatal foetal abnormalities and sets out the medical conditions under which a termination could be sought. The abortion issue is far more contentious as it is only weeks since Anne Ferris rebelled over Labour opposition to a similar bill by Independent TD Clare Daly and was thrown out of the parliamentary party for voting in favour of the reform.
A number of other Labour TDs were considering voting for the Daly Bill as well, but were talked out of it by the leadership.
Mr McNamara said his proposed legislation would specifically apply to cases where the baby would not be born alive, and also cases where the baby would be born without a brain and would die a short period after birth.
The Clare TD said his bill is more restrictive than the Daly Bill, which the attorney general said was unconstitutional.
A senior Labour source said the Tánaiste was “relaxed” about the move.
The Labour conference last weekend saw an internal committee recommend a referendum to be held in order to bring together a broad range of subjects such as allowing terminations including fatal foetal abnormalities cases, incest, rape and when there is a risk to the mother’s health and life.
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