FINANCE: Right of borrowers to appeal bank veto prioritised in new FF bill – McGrath

21 November 2017
By Elaine Murphy

Bill will help unlock appeals process following Court decisions

Fianna Fáil Spokesperson on Finance, Michael McGrath has today introduced legislation that would explicitly empower borrowers with the right to appeal a bank’s veto over a Personal Insolvency Arrangement.

Carrigaline TD Michael McGrath

Fianna Fáil’s Personal Insolvency (Amendment) Bill 2017 has been drafted in response to a September decision from the Circuit Court that decided that the borrower has no such legal authority. The same decision was arrived at by the High Court in a similar case.

Deputy McGrath commented, “The result of recent Court decisions is that the independent Personal Insolvency Practitioner (PIP) must now bear responsibility for appealing the rejection of a personal insolvency application. This clearly was not the intention of the 2015 Act.

“The effect of these Court decisions has been to throw the entire personal insolvency system into turmoil. It is entirely unfair and unreasonable to expect a PIP to bring an appeal and risk burdening themselves with all the potential legal expenses.

“The Personal Insolvency Act 2012 enabled a lender who owned more than 65% of the debt to veto any Personal Insolvency Arrangement. This left borrowers at the mercy of the banks.

“With the recent court decisions, appeals have ground to a halt and it appears that some banks are using the current vacuum to their advantage by exploiting the fact that PIPs are understandably reluctant to go down the legal route. This current vacuum is putting family homes at risk.

“Our amendment places the legal authority for an appeal with the borrower and not with the Personal Insolvency Practitioner.

“Our Bill isn’t a silver bullet for all the ills affecting the personal insolvency process in Ireland. I have serious concerns about the time taken to arrive at a solution to personal insolvency with nearly 70% of the 632 appeals initiated since the 2015 Act still to be concluded. However, our Bill will at least help to get the current appeals system up and running again.

“Fianna Fáil, in putting forward this bill, and in conjunction with our Mortgage Arrears Resolution (Family Home) Bill 2017 is determined to create a personal insolvency system that is fair and sustainable,” concluded McGrath.

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