BANKRUPTCY CHANGES ON THE WAY
People who cannot service their mortgage could declare insolvency and be released from bankruptcy – including their mortgage deficits – within three years under new government proposals, according to the main story in The Sunday Business Post.
“In a radical shake-up of the law in relation to personal debt, Minister for Justice Alan Shatter is preparing legislation that will go a long way towards forcing banks to the negotiating table with borrowers who are in trouble with their loans, by providing alternative options, the article states.
The decision to grant bankruptcy will be taken not by the courts, but by a new statutory insolvency service. The newspaper says the banks have argued against the inclusion of mortgage debt in any non-court settlement process.
“The banks have tried to persuade Shatter that only unsecured personal debt should be subject to debt settlements. However, it is understood that mortgage debt will be included in some form, under proposals due to go before cabinet soon.”
Tags: banks, Personal finance, recession