I was contacted by a lady in recent days who told me how utterly humiliated she felt when she heard the details of the new personal insolvency service guidelines published in last weekend's press. The lady and her husband have both taken a massive drop in salary in recent years and, on foot of this, were forced to restructure their mortgage. So-called luxuries such as Sky TV, health insurance and so on are long gone for this couple. They have not had a foreign holiday since before they were married. Their second car is not a luxury but a necessity. A significant proportion of their income goes on child care.

This family, which has used up all of its personal savings and borrowed from family members, was already being kept awake at night with worry. Now, they have the added pressure of hearing rumours that one of them may be forced to give up work. This family is in arrears with its mortgage because there are some months it cannot afford to pay the full amount so it just pays as much as it can spare. These ordinary hardworking individuals are driven to distraction by the condescending attempt on the part of the Government to throw them to the wolves.

The lady asked me what next, a question I want to put to the Taoiseach. If the banks have a quarterly target of restructuring mortgages of 20,000, as has been reported, and it transpires a large proportion of the 95,000 householders in mortgage arrears have already made severe cutbacks to their family spending, what will the banks target then? Will it be the second television, mobile phone or laptop?

The second toilet.

Will the family pet be considered one mouth too many to feed?

Get rid of the dog.

Where will it stop? Have we reached the point where the banks that caused residential property hyper-inflation - the banks which are now handing out pensions of €100,000 to 165 personnel - are being given the green light to pillage homes?

The Deputy is over time.

Developers have said how understanding the National Asset Management Agency, NAMA, is of their plight.

Sorry, Deputy. Will you put your question, please?

NAMA has not asked them whether they have two cars, to take their children out of private school or whether they are going on a holiday this year. Does the Taoiseach accept that there appears to be one law for the elite and another law for the ordinary person?

This is a difficult position. The Government has been at pains to set out that we want to protect home ownership where it is at all possible. The only resort should be a last resort in respect of home repossessions. This is not the situation that applies in other countries but in this country home ownership is of particular importance to people and rightly so.

That is why the Taoiseach spent 20 years opposing the vampire tax.

There are 100,000 mortgages in distress and we want to ensure in so far as it is possible that the vast majority of those people can have resolution brought about to their mortgage problems and are able to plan their lives accordingly and have the opportunity to contribute to their local economy and society in general. Everyone understands that this is what is required. Given the circumstances that some people have found themselves in and find themselves in, this is not an easy position to resolve.

The banks have been recapitalised extensively and it is a matter for the banks to sit down and work out individual cases because the circumstances are always different. The personal insolvency agency is derived from one of the most radical tranches of legislation brought into the House in more than a century and what is set out in terms of guidelines, which have yet to be adopted, is the whole spectrum of what might be involved.

I have answered questions about this already. What is required is a degree of common sense about the rights of people and the contribution they wish to make to deal with their particular mortgage situation. Some have said that the banks hold the whip hand on this at the end of the day but it is not true in respect of the legal recourse that any person has. Banks are now required to work out a solution by virtue of the changes made, the monitoring of the Central Bank and by their own admission in having trained personnel to sit down with individual mortgaged persons who have distress in their mortgages. If that is not possible through the insolvency agency or if it does not work out then, depending on how the practitioner makes recommendations, people have legal recourse subsequently. All the issues Deputy Halligan mentioned and all the general comments about guidelines must be adopted and considered but they in no way determine that a person would have to give up work or make a choice specifically in respect of his individual household income and how he would work out a resolution in regard to his debt.

I do not believe the full scale of the depth of the problem is evident yet. In many cases mortgages taken out in 2001 or those consolidated since that date simply cannot be paid back. Does the Taoiseach agree that the only way to the bottom of this mess is to find a mechanism that revalues the properties at the present valuation, compares the model valuation with the lending against it and then writes off the difference? Is that not reasonable? Many people have no problem with the contract they entered into with the banks and they want to keep it. They want to keep their houses and pay their mortgages. Can we not find a solution whereby the value of a property is set at what the property would be valued at today and the mortgage is brought down to that level and then enter into negotiations with the person that has taken out the mortgage at a reduced rate? The banks would be happy because they would be guaranteed some sort of payment every month.

What Deputy Halligan is suggesting sounds great but the rest of the taxpayers would have to pay for it.

My suggestion is reasonable and pragmatic.

Let the Taoiseach answer, please.

The banks have the money.

Let us suppose we took 50,000 cases, 100,000 cases or 500,000 cases and reduced their valuations to the current valuation. Someone must pay for it. What is Deputy Halligan's suggestion?

It cannot be paid for anyway.

What is Deputy Halligan's suggestion? Someone must pay for it.

We paid them €60 billion already.

We did not.

Deputy Halligan speaks of the individual but someone must pay for the individual. That is why the changes are being made.

We gave the banks money. We recapitalised the banks.

It is in order that there can be a process and a series of arrangements that individuals can make to work out a resolution in their particular circumstances. That is required through the bank or the lender sitting down with such people, the question of the insolvency agency and an individual's rights beyond that. Obviously, if an individual goes to the insolvency agency the professional practitioners make a determination about what is in the best interests of both the borrower and lender in such cases. Deputy Halligan has suggested writing them all down in respect of individuals, but it is the rest of the taxpayers who must pay for that and they are hard pressed as it is in a range of respects.

They are paying for it already.

What must apply is a degree of common sense, taking into account the full range of opportunities and arrangements that can be put in place by both borrower and lender to achieve a resolution and give the primary responsibility, in so far as it is humanly possible, to retaining home ownership for the people involved. It has been pointed out on many occasions that in this country repossession should and would only be a last resort.