WITH the Republic's economy still taking a hammering, a new bill by the Irish government aims to ease the pressure on those declared bankrupt.
The bill will propose that those unable to pay their debts and declaring themselves bankrupt will only be so for three years rather than the
full 12 years as is currently the case.
The Personal Insolvency Bill will force banks to be more "pro-active" in dealing with economic problems, which Taoiseach Enda Kenny said was partially of their own (the banks) creation.
More details on the proposals are to be revealed by housing minister Jan O'Sullivan, including a plan allowing those unable to keep up with mortgage payments to keep a roof over their heads and rent their home back from the relevant financial institution by way of a so-called "mortgage to rent" scheme.
The scheme will allow families remain in their home, but they will have to relinquish ownership of the property.
The ownership of the house will be transferred to a housing agency financed by a 70 percent loan from the original mortgage lender with the remainder coming from the Irish state, which will take a 30 percent equity stake in the property.
The taoiseach, together with Tánaiste Eamon Gilmore, and the ministers for finance, public expenditure and reform comprise the government's Economic Management Council, and they plan to meet with Irish banks to outline plans for dealing with mortgage arrears in the future.
"We need to help struggling families who find themselves under unsustainable levels of mortgage debt. We have to give them some options whereby they can make a fresh start in their lives," Mr. Kenny said.
"Fundamental to our strategy is a radical overhaul of Ireland's regime for personal debt insolvency," he added.
The bill will also bring into being new legal protection for those struggling with large debt, but not having yet declared themselves bankrupt.
