Government appoints experts to consult on indebtedness

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Brendan Burgess

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Government appoints experts to fulfil Programme for Government commitments on debt



Ministers Brian Lenihan and Eamon Ryan today (25th February 2010) announced the establishment of a group of experts to work with the Government on our response to the issue of indebtedness.

The Independent Chair will be Mr. Hugh Cooney an insolvency accountant with BDO Simpson Xavier. The other members are as follows:

Matthew Elderfield, Acting Head of Consumer Protection

David Duffy, ESRI, author of report on Negative Equity

Pat Farrell, Irish Banking Federation

Tom Foley, retired banker

Paul Joyce, FLAC

Patricia Rickard-Clarke, LRC

Brendan Burgess, www.askaboutmoney.ie

Senior officials of the Department of Finance, Department of the Taoiseach, Department of Justice, Equality and Law Reform, Department of Social and Family Affairs and Department of Environment, Heritage and Local Government .
These experts will work within Government and present their recommendations on a rolling basis to the Minister for Finance, for consideration by Government. The work will commence immediately.
The Terms of Reference will be based on the Renewed Programme for Government and include mortgage and non-mortgage debt. They include an examination of measures to assist those in mortgage arrears to keep possession of their family home with reference to the measures adopted in other jurisdictions. The ongoing deliberations of the Law Reform Commission will be considered, specifically reform of personal insolvency, bankruptcy law and debt enforcement.
The Ministers thanked those who are willing to give of their time and expertise.

The Ministers stated, “Keeping families in their home is a social and economic priority. The Government also wishes to remove, as far as practicable, debt enforcement proceedings from the courts.
In our efforts to achieve our aim, it is important that we do not jeopardise the ability of the financial system to access credit. There are no simple solutions to the debt issues we now face.
We are confident that the wide membership and expertise of all the individuals involved, working closely with Government, will bring forward innovative recommendations on debt management and enforcement.
Along with the creation of jobs and the continuing work of Government on the future of our banking system, this work can only help our national recovery.”
Notes for Editors
Renewed Programme for Government – page 15
Protecting the Family Home
We will introduce new measures to protect families having difficulties with their home mortgage payments.
The existing statutory Code of Conduct on Mortgage Arrears and the recently agreed protocol between the Irish Bankers Federation (IBF) and the Money Advice and Budgeting Service (MABS) on debt default will be further reviewed with a view to expanding the options available for dealing with debt situations, including for example, the use by banks and lenders of more flexible mechanisms to avoid foreclosure in appropriate circumstances. These could include:

  • reduced rates
  • longer maturity dates
  • rolling-up of outstanding interest
  • bank taking equity in the house
  • bank taking ownership and leasing back the property to the resident with rent payments coming off the loan.
With reference to the measures adopted in other jurisdictions, the Government will examine ways of expanding its own mortgage-support measures.
Helping Those in Debt
We will reform debt enforcement in light of the deliberation of the Law Reform Commission, which has recently published a consultation paper on the matter. We will regulate debt collection agencies.
We will create a new system of personal insolvency regulations allowing for a statutory non-court-based debt settlement system.
We will seek to establish a central Debt Enforcement Office to remove as many debt enforcement proceeds from the courts as possible.
ends
 
Fantastic..

At least a pathway will emerge so that people will not be in the dark as to what could or would happen in relation to their personal debts.
 
I would be worried about the make up of the experts.

The very people who got us into the problems we are experiencing are now having to come up with the solutions.


 
sandymount said:
I would be worried about the make up of the experts.

The very people who got us into the problems we are experiencing are now having to come up with the solutions.
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yes i am certainly alarmed at this prospect

how does it expect to have any credibility with the public when a simple google search will unearth a minefield of quotes which will reveal that some of these guys were actually cheerleaders of the property bubble and as such actively facilitated in creating this problem

is their any media people out there with the gumption to take a look at these people

whats next is ken mcdonald going to be the chairman?
 
A most disappointing line up here – leans far too much towards institutional rights and away from private citizen rights. Only one social justice voice (FLAC) and no MABS, NCA or FR Consumer Panel input?


The Finance bias will always favour institutional protection - after all this is the Ministery that facilitated the consumer credit boom and is focussed soley on banking stability which directly conflicts with social justice and modern equitable principles of debt resolution.

The Greens have dropped the ball on this one as well -
 
"Helping Those in Debt
We will reform debt enforcement in light of the deliberation of the Law Reform Commission, which has recently published a consultation paper on the matter. We will regulate debt collection agencies.
We will create a new system of personal insolvency regulations allowing for a statutory non-court-based debt settlement system.
We will seek to establish a central Debt Enforcement Office to remove as many debt enforcement proceeds from the courts as possible.
ends"

This is where this agencies remit should begin and end. The consequences of debt in Ireland, one of the most personally indebted countries in the world are horrific. Anything short of a complete reform of Bankruptcy Law is pointless. We need a system like that in the UK where is you can declare Bankruptcy and be, eventually, allowed to move on, with a fresh start, rather than facing the prospect of being hounded to the grave.


  • reduced rates
  • longer maturity dates
  • rolling-up of outstanding interest
  • bank taking equity in the house
  • bank taking ownership and leasing back the property to the resident with rent payments coming off the loan.

This approach I think could be useful in a very limited number of cases, but if rolled out as a national strategy for dealing with debt it would be a disaster. What are we really saying here. Reduce the capacity of the banks that made the loans, to collect on those loans, interest and capital, to allow someone who can not afford to live in that house to stay in that house. Why? Further threatening the banks that we are all but on life support at the moment. Someone has to pay these debts at the end of the day. It is just a matter of WHO that will be. The person who owes the debt or the rest of us. Debt forgiveness is never free.We need to get real, and become responsible for our own actions, and stop with the whinging sentiment of the second poster.

"Fantastic.. At least a pathway will emerge so that people will not be in the dark as to what could or would happen in relation to their personal debts."

No we don't need a "pathway" from the government. We need to grow up, and take some personal responsibility for our actions.
If you borrowed the money, pay back the money. If you can't pay. then fess up, take the (massively reformed, I hope) consequences and move on.
I know two people in the UK who defaulted on their mortgages - it was inconvenient, sad in one case, but no one died. Both happily and well recovered at this stage.
 
@asta : for a good treatment of modern debt resolution regimes and the principles underpinning them you could read the LRC proposals available on their website. http://www.lawreform.ie/submissions.9.html

Who pays etc is well covered in a balanced argument for reform of personal insolvency including a discussion on the UK system - which is not the only one.

Inherent in modern consumer society, with its dependency on credit, is a principles based system allowing for debt resolution in way that limits costs to society and allows people to become productive members of society. The issue is less about attributing blame but allowing for a just and equitable resolution that balances the rights and obligations of creditors expectation of repayment and debtors ability to pay. Debt forgiveness has to be earned - there is no suggestion of a free lunch or allowing for free riders. Most financially vulnerable people unnaffordable indebtedness is not about an un-willingness to repay but about a severely limited ability or no ability to repay through circumstances beyond their control. To suggest they should be consigned to a life of pecuniary without anyhope of becoming once again productive members of society is to deny a safety net afforded in almost every other mature democractic society.
 
Folks

I won't be discussing the work of the group or my own views on this topic on askaboutmoney or otherwise in public.

But I will bring any ideas or views brought up here to the group.

If you have a new idea, it's probably best to start a new thread.

Brendan
 
IBF welcomes establishment by Government of expert group on consumer debt​


The Irish Banking Federation (IBF) welcomes the establishment by Government of an expert group to examine the issue of mortgage and consumer debt and to make appropriate policy recommendations.

The IBF also welcomes the opportunity to participate directly in the work of the group and looks forward to doing this in a positive and constructive manner. IBF already has a long-standing working relationship with a range of stakeholders in the development of debt management solutions for consumers. The positive output of this is most recently reflected in the following:


  • The IBF Pledge to Homeowners makes clear that legal action to repossess a home will not be commenced by IBF creditors provided the customer talks with the lender at the earliest opportunity so that a mutually-acceptable arrangement can be agreed, maintained and reviewed thereafter on a regular basis. An Oversight Committee involving representatives of MABS and IBF under the independent chairmanship of Prof. Martin O’Donoghue is monitoring the application of this Pledge.


  • The IBF/MABS Protocol on Debt Management enables IBF creditors and MABS money advisers to work together effectively to help personal customers to address and manage debt problems and, wherever possible, to formulate a mutually-acceptable, affordable and sustainable repayment plan.


  • The IBF supports key recommendations in the Law Reform Commission’s “Consultation Paper on Personal Debt Management and Debt Enforcement”, including:

    • The development of an effective alternative to imprisonment for those who are unable to pay fines and civil debt
    • The development of a non-court-based system for dealing with personal debt
    • The regulation of debt collection agencies and of commercial debt advice agencies
“These and other initiatives are helping tens of thousands of consumers to work with their lenders in managing their mortgage and other debt repayments through these very challenging times. And we are fully committed to working with all key stakeholders in continuing to make this happen”, states Pat Farrell, IBF Chief Executive.
Note: Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Felix O’Regan, IBF Head of PR and Public Affairs, tel. 6715311, 087 6481644
 
kaplan said:
A most disappointing line up here – leans far too much towards institutional rights and away from private citizen rights. Only one social justice voice (FLAC) and no MABS, NCA or FR Consumer Panel input?


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I'm really surprised that nobody from MABS is on there. They are the people dealing with debt at the coal face. I also think someone from the St. Vincent de Paul and one of the community welfare officers would be a good idea.

My fear is this is another committee/quango that will produce a report that will be biased towards the insitutions and not the individuals and that will not be implemented in any case.

How long before a report is made and decisions taken. It's right now that people are in trouble and they need solutions now.

Why not just simply copy what another jurisdiction does in a good way to solve people in debt.
 
The consultation group will need to have some idea of where the economy and property market are heading. What assumptions will these discussions be based on? Will the group be permitted to discuss property prices?
 
Can I ask how these "experts" are selected appointed?

In thread a while ago where Brendan recounted giving out to David McWilliams (http://www.askaboutmoney.com/showthread.php?p=958583#post958583), Brendan claims to be a skeptic yet says he would not listen to skeptical arguments until _after_ they've been proven right - the strangest definition of the word "skeptic" I've ever heard.

In the same thread, Brendan himself said that he doesn't have the theoretical economic training to evaluate arguments related to the property market.

Yet now he's been appointed to an expert committee related to property.

I'm sure Brendan is a very nice guy, but I'm at a loss to see what exactly he brings to this committee.

How are these committees appointed exactly?
 
You are happy to pass on views to the panel?

Speaking as a person who is not in debt, mortgage free and paying income tax... is this going to be a state lead bail-out, and is it going to cost me?

Are those who bought property in the boom going to pull the ladder up after them, getting rewarded for bad decisions and being allowed stay in houses they cannot afford at the expense of the taxpayer?

As far as I can see, there are two parties to this problem: overwhelmed mortgage holders and the banks that gave those mortgages. Its up to those two parties to work something out. The governments only input should be to reform bankruptcy laws.
 
So what if he's not an expert on property. All the so called experts on property got us into this mess so much good they are. Anyway this group is about debt not property. I'm glad Brendan is on the committee at least we can feel someone we 'know' is in there. I'm sure he's gained a wealth of experience with all the posts on AAM of people in debt.
 
Bronte said:
So what if he's not an expert on property. All the so called experts on property got us into this mess so much good they are.
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How about appointing experts who foresaw the mess? Crazy idea. Just a thought. There are some out there. Brendan himself has labelled some of them "sensationalist".

Anyway this group is about debt not property. I'm glad Brendan is on the committee at least we can feel someone we 'know' is in there.
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How very Irish to want someone appointed on a cosy basis (cos they "know" them) and nothing to do with expertise.

I'm sure he's gained a wealth of experience with all the posts on AAM of people in debt.
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I'm not sure is that sarcasm but I imagine there'll be some very hollow laughter at that sentence. Do you think that perhaps if AAM's policy over the past 5 years had been different, many people flooding here looking for advice might not be?
 
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