The Free Legal Advice Centre (Flac) said giving circuit court judges the power to overrule a lender’s “unreasonable refusal” to accept a debtor’s proposed insolvency arrangement rebalances the power between the two parties and should lead to greater fairness.
However, it pointed out that there is still no provision for a Public Insolvency Practitioner Service for those who cannot afford a private practitioner.
“This is likely to mean that many people will not be able to make a proposal for a personal insolvency arrangement and may therefore be unable to request the circuit court to review their case,” said Flac director general Noeline Blackwell.
Flac said few details were available on the proposed changes to the mortgage-to-rent scheme but that, if the property value changes were realistic and if sufficient funding was made available to support the scheme, then these would also be positive.
It also welcomed the enhanced role for Mabs (the Money Advice and Budgeting Service) but said the Government would need to give the service adequate resources for its increased function.
Mabs itself welcomed the Government’s elimination of the bank veto as well as the attempt to redress the balance between the creditor and debtor.
However, Michael Culloty of Mabs said the public needs to see what further information emerges.
Ciaran Phelan, the chief executive of the Irish Brokers Association, claimed some elements of the Government’s package were “without teeth”.
“One area which deserves some degree of attention is the proposed involvement of Stepchange which was not outlined at the Cabinet meeting,” he said, referring to a UK-based debt charity.
“In essence, they will be funded by the banks through the mechanism of the Irish Bankers Federation which may muddy the waters a little when it comes to the perception of impartiality.
“It stands to reason that banks will probably favour mortgage customers going through the Stepchange route rather than elsewhere... but it has to be in the interests of both the mortgage holder and the bank to do so.”
Clúid Housing was critical of the Government’s proposals for reform of the mortgage-to-rent scheme which, it said, amounted to “minor tweaking to a scheme which never really got going in the first place”.
Simon Brooke, its head of policy, said: “The mortgage-to-rent scheme has been running for nearly three years at this stage.
“By now, at least 1,500 distressed borrowers could be housing association tenants. Sadly the current total of completed cases is less than 100.”