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| Ireland overhauls insolvency rules | Ireland overhauls insolvency rules |
| (about 1 hour later) | |
| New plans to deal with personal debt being announced by the Irish government could see state-appointed officials taking over the finances of those struggling with mortgages. | New plans to deal with personal debt being announced by the Irish government could see state-appointed officials taking over the finances of those struggling with mortgages. |
| Under the old system, bankruptcy lasted at least 12 years, after which unpaid debts would still not be written off. | Under the old system, bankruptcy lasted at least 12 years, after which unpaid debts would still not be written off. |
| The new system will discharge debtors from insolvency after three years. | The new system will discharge debtors from insolvency after three years. |
| But it also allows for micro-managing of debtors' finances by "personal insolvency practitioners". | But it also allows for micro-managing of debtors' finances by "personal insolvency practitioners". |
| These officials are to be appointed by a new state agency being set up as part of the plans. Failure to comply with serious restrictions on personal spending could mean debtors losing their homes. | These officials are to be appointed by a new state agency being set up as part of the plans. Failure to comply with serious restrictions on personal spending could mean debtors losing their homes. |
| The revised personal insolvency regime is to replace what was one of the harshest bankruptcy systems in the developed world. | |
| But leaked media reports of the draft guidelines have suggested that people in mortgage or personal debt unable to reach agreement with their banks and who enter the insolvency regime could be forced to live on as little as five euros a day for food, be banned from owning cable television or going on foreign holidays, and may be forced to give up cars where public transport is an alternative. | But leaked media reports of the draft guidelines have suggested that people in mortgage or personal debt unable to reach agreement with their banks and who enter the insolvency regime could be forced to live on as little as five euros a day for food, be banned from owning cable television or going on foreign holidays, and may be forced to give up cars where public transport is an alternative. |
| Suggestions that some parents with high childcare costs and debts might be forced to give up work to mind their children instead prompted the country's leader, Taoiseach Enda Kenny, to deny such plans after a furious public reaction. | Suggestions that some parents with high childcare costs and debts might be forced to give up work to mind their children instead prompted the country's leader, Taoiseach Enda Kenny, to deny such plans after a furious public reaction. |
| Debt crisis | Debt crisis |
| Ireland faces a mounting mortgage debt crisis after the collapse of the country's economy in 2008. A property crash following years of boom has left many with high mortgages in negative equity - with house and apartment values falling by more than 50% nationally since 2007. | Ireland faces a mounting mortgage debt crisis after the collapse of the country's economy in 2008. A property crash following years of boom has left many with high mortgages in negative equity - with house and apartment values falling by more than 50% nationally since 2007. |
| Unemployment of 14% and wage cuts in a weak economy have also hit those with mortgages hard. | Unemployment of 14% and wage cuts in a weak economy have also hit those with mortgages hard. |
| Almost one in eight of the country's private residential mortgages are in arrears - classed as 90 days or more behind with repayments - a figure which has been rising. | Almost one in eight of the country's private residential mortgages are in arrears - classed as 90 days or more behind with repayments - a figure which has been rising. |
| Statistics do not cover those who have negotiated reduced interest-only repayments with their banks to temporarily reduce their mortgage bills, meaning the underlying picture of those struggling with debt is higher. | Statistics do not cover those who have negotiated reduced interest-only repayments with their banks to temporarily reduce their mortgage bills, meaning the underlying picture of those struggling with debt is higher. |
| The new insolvency regime has been driven by the troika that has taken control of Ireland's finances since the country entered a bailout programme in 2010 following the crash of its banking sector. | The new insolvency regime has been driven by the troika that has taken control of Ireland's finances since the country entered a bailout programme in 2010 following the crash of its banking sector. |
| Dealing with the country's mortgage arrears problem is seen by the International Monetary Fund as key to placing Ireland's banks and economy on the road to recovery. | Dealing with the country's mortgage arrears problem is seen by the International Monetary Fund as key to placing Ireland's banks and economy on the road to recovery. |
| Insolvency is expected to remain a last resort for those unable to reach private deals with banks over arrears. But both the government and bankers are worried about the possibility of some people deliberately not paying their mortgage - so-called "strategic defaulters" - in the hope of having debts written off. | Insolvency is expected to remain a last resort for those unable to reach private deals with banks over arrears. But both the government and bankers are worried about the possibility of some people deliberately not paying their mortgage - so-called "strategic defaulters" - in the hope of having debts written off. |
| The hair-shirt measures heavily leaked in the media may have been directed at people in that category. But in Dublin's busy Moore Street market, sympathy for those in mortgage trouble matched hostility to the plans. | The hair-shirt measures heavily leaked in the media may have been directed at people in that category. But in Dublin's busy Moore Street market, sympathy for those in mortgage trouble matched hostility to the plans. |
| "For somebody to dictate to you that you can't do this or that - I think that's bang out of order. The banks were quick to give the money to people in the first place - it was like giving sweets to a baby. I don't think they should have that much rule in telling people how they should live their life," said one street-seller. | "For somebody to dictate to you that you can't do this or that - I think that's bang out of order. The banks were quick to give the money to people in the first place - it was like giving sweets to a baby. I don't think they should have that much rule in telling people how they should live their life," said one street-seller. |
| But the measures being threatened - such as forbidding cable television subscriptions - were ridiculed by fishmonger sisters Imelda and Margaret Buckley, who said they hear many customers worried about debt. | But the measures being threatened - such as forbidding cable television subscriptions - were ridiculed by fishmonger sisters Imelda and Margaret Buckley, who said they hear many customers worried about debt. |
| "No Sky Sports - what's that going to do? Give us something - don't take everything away from us. If you don't go on a holiday you're going to watch television - but without your old TV - you'd have to talk to your husband then!" said Imelda. | "No Sky Sports - what's that going to do? Give us something - don't take everything away from us. If you don't go on a holiday you're going to watch television - but without your old TV - you'd have to talk to your husband then!" said Imelda. |
| "It'll lead to chaos. There'd be plenty of marriages splitting up if you had to talk to your husband," warned Margaret. | "It'll lead to chaos. There'd be plenty of marriages splitting up if you had to talk to your husband," warned Margaret. |