A few years ago I spent a lot of time in Dublin, Ireland working to put together a way to help people with bad debts to overcome their financial problems that did not result in them going to jail for consumer debts.
As hard as it is to believe, the consumer bankruptcy process in the Republic of Ireland was all but non-existant with about nine people a year going bankrupt. The problem, even after bankruptcy you still owed the debts and if you did not pay you could be sent to jail. many were.
Now, finally, some good news out of Ireland about debt solution reform. The Law Reform Commission has drafted a Consultation Paper on Personal Debt Management and Debt Enforcement that proposes some meaningful reforms to allow people to repay what they can afford to pay without being sent to jail.
The key recommendations of the consultation paper include:
- On responsible lending, the Commission recommends that consideration be given to whether the system of credit reporting in Ireland should be expanded or otherwise improved.
- On responsible arrears management, the Commission recommends that a system for the regulation of debt collection agencies should be considered (noting that industry representatives support this);
- On debt counselling, the Commission recognises that this is primarily a matter of social policy, but recommends that a system for regulating commercial debt advice agencies should be considered.
Personal Insolvency Law
- The Commission recommends the creation of a new system of personal insolvency law in Ireland; in particular that a statutory non-court-based debt settlement scheme should be introduced, which would supplement (though not necessarily replace completely) the court-based scheme in the Bankruptcy Act 1988.
- The key principles of the new system would be: earned debt discharge; open access for honest and long-term insolvent debtors; legally binding debt settlement; preserving a reasonable standard of living for debtors; and a discharge period of reasonable length (shorter than the 12 years in the Bankruptcy Act 1988 ).
- The Commission provisionally recommends that the Irish enforcement system needs fundamental reform., so that the existing enforcement procedures, including the Debtors (Ireland) Act 1872 and the Enforcement of Court Orders Acts 1926 to 2009 should be replaced
- The proposed new system would be based on the introduction of a central Debt Enforcement Office (which could build on the current arrangements) and the removal of much (but not all) of debt enforcement proceedings from the courts.
- The key principles which should underpin this new system are also set out, in particular: proportionate, balanced and appropriate enforcement in each individual case; improved access to information on the means of debtors; clear and simplified enforcement procedures; increased efficiency and accountability in enforcement; a holistic approach to enforcement through interaction with the proposed debt settlement system; and the encouragement of increased participation of debtors in enforcement proceedings.
- The Paper also recommends detailed reforms of individual enforcement methods, many of which use outmoded terminology and procedures.
More time will be necessary to see how many of the recommendations are implemented and how long the process will take but one thing is for certain, the citizens of Ireland deserve a better solution to help them cope with debts than exists now and for a century before.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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