Fianna Fáil’s Spokesperson on Finance Michael McGrath has welcomed the increase in the numbers availing of the Insolvency Service and has urged more debtors to examine the options available to them in the Service.
Deputy McGrath commented, “I welcome the fact that the number of applications being made to the Insolvency Service continues to increase after a very slow start. More people are applying for personal insolvency options which provide an alternative to bankruptcy, while bankruptcy rates stabilised in 2015. The Insolvency Service must continue to promote the options it makes available to those dealing with all types of debt.
“The ending of the bank veto over a Personal Insolvency Arrangement for those with arrears on their family home mortgage came far too late for many families. It appears that the ending of the bank veto has had a positive impact in the brief period since its introduction, with some banks changing their attitude to borrowers. The government only removed the bank veto in November under considerable pressure and after a long delay. That delay in removing the veto resulted in many families losing their homes unnecessarily.
“The government also retained the bank veto for those who only fell into mortgage arrears in 2015 or who do so in the future, and indeed for those who have other forms of secured debts such as buy-to-let mortgages. It is important that we do not get carried away and think that the mortgage crisis in over. The 641 Personal Insolvency Arrangements approved in 2015 is a tiny fraction of the 92,000 family home mortgages in arrears, with family homes still being repossessed at a rate of 1,600 a year.
“There is still a pressing need for long term sustainable solutions for those in mortgage arrears. In particular, I believe that a Mortgage-to-Rent Scheme must be in place as a safety net for those who need it as a sustainable way of staying in their homes. Figures supplied to me by the Minister for the Environment Alan Kelly, however, show that just 119 Mortgage-to-Rent transactions have been approved nationwide. It is a scandal that 10 times more family homes are repossessed annually than have been approved for the Mortgage-to-Rent scheme.”