A UCD professor in Economics Karl Whelan has said one of the problems in Ireland is that the country does not have a "functioning personal bankruptcy regime".
It follows a debate on debt forgiveness, re-ignited by comments by leading economist Morgan Kelly.
He called for the introduction of a scheme, which he estimates would cost around €5-6bn.
But Junior Minister Brian Hayes yesterday said a blanket approach to debt forgiveness for mortgage-holders is "unrealistic".
It is estimated that some 200,000 mortgage accounts are currently in negative equity in Ireland.
Professor Whelan said Ireland needs to put in a a better system to deal with personal bankruptcy.