Insolvency bill to include specific measures for those with €20,000+ debts

The government bill dealing with the mortgage arrears crisis, due for publication shortly, will see the introduction of non-judicial agreements between banks and their customers in a bid to avoid wide-scale repossessions.

The bill is also expected to cut bankruptcy from 12 to three years and will enable those with debts of up to €20,000 who have no income or assets to have that debt written off.

Noeleen Blackwell from the Free Legal Advice Centre said there were also measures to help people dealing with debts greater than €20,000.

"People with larger debts than that are going to see a scheme whereby if they commit most of their income they will be allowed a living wage," she said.

"If they commit the rest of their income and the rest of their assets to paying off their debts over a period of possibly five or six years, they will be able to write off the rest of the debt after that period.

"That will suit a lot of people - who will (be) happy to pay as much as (they) can over a few years."