The next speaking slot is being shared by Deputies Ciara Conway and Ann Phelan.

I congratulate the Minister for publishing the Bill which deals with a very complex issue. It is great to have an opportunity to discuss it in the House before the term finishes.

The last Administration left behind an appalling legacy, with crippling debts being saddled on the shoulders of citizens. After 15 years of mismanagement, we finally have radical and workable legislation to deal with the debt crisis The Bill reforms legislation which has been in place for over a century and seeks to ensure that in coming years there will be better structures in place for all families, not only those in difficulty. Struggling homeowners will be able to enter into arrangements, on meeting certain criteria, with their lenders to have some of the debt restructured. There will also be options to allow families and individuals to remain in their own homes. That is the crux of the issue for me.

The major concern of the people we meet in our clinics and who contact our offices is that pressure was put on young people to take out huge mortgages. The couch, the decking and the car were thrown in and now young families have been saddled with debt to be paid off in the next 30 years. This can only be described as poor practice by the banks. When I first went to obtain a mortgage, I was told I would rent a room in my house. There is not a huge or thriving rental market in Abbeyside, Dungarvan, County Waterford, as we do not yet have a university. There were inappropriate practices which put pressures on ordinary everyday people. Banks faced with the prospect of non-payments know they must engage with borrowers. In my experience, the banks are doing what they are supposed to be doing on paper. They enter into a MARP, mortgage arrears resolution process, agreement with borrowers but lump more arrears on top of it which puts the payment completely out of the reach of the borrower.

The provisions relating to a debt settlement arrangement or a personal insolvency arrangement are specifically designed, as far as is practicable, to facilitate a debtor's continued ownership and occupation of his or her principal private residence unless the debtor does not wish to do so. We do have a duty to ensure the language used in the legislation is distilled down so that people will know what it means to them. Part of our role in this debate is to use accessible language. While I accept there needs to be legalese and words are chosen carefully when drafting legislation, people need to be able to filter out the provisions that affect them.

The Bill introduces three new non-judicial debt resolution processes. The debt relief notice will allow for the write-off of qualifying unsecured debt up to €20,000, subject to a three-year supervision period. The Bill provides for a debt settlement arrangement for the agreed settlement of unsecured debt over five years. The personal insolvency arrangement will enable the agreed settlement of secured debt up to €3 million, although this cap can be increased with the consent of all secured creditors, and unsecured debt over six years.

The Bill outlines several avenues that can be pursued by people in debt. The inclusion of both secured and unsecured debt, through personal insolvency arrangements, is seen as placing Ireland to the forefront of states seeking to address the devastating impact of unsustainable debt by providing for settlement arrangements of both types of debt at the same time. It must be remembered that unsecured debt of credit cards and cheap credit is a significant burden to many families across the country and causes much stress.

Labour has consistently and clearly promised that it would introduce legislation to assist those struggling to pay their mortgage, deal with their credit card debt or other personal debt. This legislation is delivering on this promise as outlined in the programme for Government. It is not, however, a blanket debt forgiveness scheme. It has been put in place for those making an honest effort to pay their debts but can no longer afford their repayments. A key principle of the Bill is that it is not about the size of the debt but rather the affordability to service it.

There is no one-size-fits-all solution and each case will be dealt with on an individual basis. The legislation addresses the obligations of debtors and the rights of creditors in a proportionate and balanced way while taking into account the financial reality of individual circumstances. I look forward to working with the Minister and my other colleagues in government to ensure the speedy passage of this Bill so its provisions can assist the many families across the country affected by debt.

I warmly welcome the opportunity to speak on this important Bill before the House today. This is possibly the most important legislation that we will pass in this House over the course of the Government's lifetime. It will deal with the appalling legacy of the previous Administration and highlights how banking regulation must be of paramount importance.

The Personal Insolvency Bill establishes a non-judicial debt settlement system and sets up an independent body called the insolvency service to oversee this system. It also radically reforms the length of bankruptcy from 12 to three years. I commend the Minister on bringing this landmark legislation before the House and taking action on the debt crisis which affects so many people. It is a complex and radical reform of our laws governing debt and bankruptcy and, in so doing, forms one part of an overall solution that we are working on to deal with the problems of unsustainable debt, be it mortgage or personal.

The debt levels experienced by people are leaving them feeling vulnerable and unsure as to how they can cope. Many are especially concerned as to how they are going to keep up with their mortgage repayments, thinking that if they fall behind they will lose their family home. As we know a man's house is his castle. These people are the backbone of our society. They are the ones who have worked hard and grafted but, because of the economic downturn, now feel isolated and alone in their struggles to try and meet their financial commitments. They are real people facing real problems, often not able to see a way out of the predicament in which they find themselves. They are in a suspended state of animation of debt which has a paralysing effect on the mind and soul. These are the people who are in dire need of our help and this Bill will help. It will not solve the problems on its own but it will play an important part in setting up a debt resolution process.

One mainstream bank recently disclosed that the percentage of its mortgages in arrears of 90 days or more continues to rise and is expected to continue to escalate into next year. Years of reckless behaviour by the banks have led this country from a period of relative prosperity to one where international financial help was required to help us out. Once the economy hit the slowdown and people started losing their jobs, then the real pressure became evident. People were faced with loans they could not pay back and mortgage repayments they could not meet. We have all heard the horror stories from our constituents.

The Personal Insolvency Bill is one part of the solution. Our programme for Government stated we believe more protection is needed for home owners with distressed mortgages and it invokes a process of putting people ahead of the banks and the developers. Indeed, Labour's manifesto stated it was an absolute priority to keep people in their own homes. However, we must offer protection for those who cannot pay, not to those who will not pay. Blanket debt forgiveness is not on offer.

When passed into legislation, the Personal Insolvency Bill will introduce three new non-judicial debt resolution processes. These will depend on the circumstances of each case. Those finding it hard to pay their debts will meet with a personal insolvency practitioner who will then mediate the best way forward. I agree with Deputy Maureen O'Sullivan that we should resist abbreviating that title to PIP as it would not convey the importance of the job. I would suggest the excellent Money Advice and Budgeting Service, MABS, be also actively involved in this process. However, and this is key, there must be engagement from both sides in this process for it to work to the maximum effect.

There will be a debt relief notice to allow for a write-off of qualifying debt, subject to a three-year supervision period. There will also be a debt relief arrangement for the agreed settlement of unsecured debt over five years. There will be a personal insolvency arrangement for the agreed settlement of secured debt up to €3 million, although this cap can be increased if both parties agree, and unsecured debt over a period of six years.

The success of the Bill depends on the interaction between borrowers and lenders. I call on both parties to be as open and honest as possible in order for this incisive legislation to work. I congratulate my colleague, the Minister of State at the Department of the Environment, Community and Local Government, Deputy Jan O'Sullivan, on the introduction of the mortgage to rent scheme, which, in conjunction with the Bill before us, will further ease the financial burden on so many families throughout the country. This scheme will also allow people to resolve their financial difficulties and remain in their family homes. I again commend the Minister for Justice and Equality for introducing this innovative Bill, which is part of the solution required to get the country back on its feet.