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Leon Farrell/Photocall Ireland

Warnings that insolvency laws could contain "an extra layer of bank veto"

The Department of Justice briefed on the issue reports The Sunday Times.

THE IRISH MORTGAGE Holders Organisation has said the Taoiseach has moved to ‘protect egos rather than distressed debtors’ after concerns were raised today about new insolvency laws.

The IMHO were reacting to an article published in this morning’s Sunday Times which said that the Justice Minister was briefed that an amendment was needed to the 2012 Personal Insolvency Act.

The accidentally released memo said that there was an issue with the legislation which could lead to an “extra layer of bank veto”.

CEO of the IMHO David Hall has said this afternoon that perhaps the greatest disappointment is the apparent delay in dealing with it.

“The Taoiseach needs to clarify his role in not having this flaw addressed with the urgency identified and recommended by the Attorney General, as it appears that he or his office made a sinister move to protect egos rather than distressed debtors,” said Hall.

The memo states, ‘despite concerns expressed by Department of Taoiseach about visibility of amendments at this point’. This is a most sinister development where political motivation has delayed vital legislation being amended.

The Personal Insolvency Act included a number of debt resolution arrangements which can write off a portion of a debtor’s unsecured debts. In many cases banks have a veto over the deal because they often represent the largest creditor in a given situation.

The IMHO is immediately calling on the Minster for Justice Frances Fitzgerald to “carry out a review of the insolvency act and system”.

Read: Insolvency service seals threefold increase in debt arrangements >

Read: Insolvency chief blasts Bank of Ireland >

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