Proposals to make people sell off personal items of jewellery before applying for personal insolvency are unfair and could strip people of their dignity, the director of the Free Legal Advice Centres (Flac) said today.
Speaking in the Dáil yesterday, Minister for Justice Alan Shatter rejected suggestions that items such as engagement rings should be exempt from the means-testing process for struggling borrowers.
Under the new Personal Insolvency Bill, the value of any assets held by applicants must be €400 or less. Exemptions will be in place for household appliances, work equipment and a car or van up to the value of €1,200, but items of sentimental value such as jewellery will not be exempted “given the potential for misuse”, the minister said.
“I am mindful of the sentimental, as much as actual, value of items such as engagement rings, etc,” Mr Shatter said.
“I would need to hear very convincing arguments as to why a person applying for a full debt write-off of up to €20,000 from his or her creditors should be allowed to retain expensive items of jewellery which might be sold to repay some of the debt incurred,” he added.
Director of Flac Noeline Blackwell said the dignity of struggling debtors has to be safeguarded, even as they are going through insolvency, and stripping them of items like engagement rings could cause “enormous upset”.
“The purpose is not to force people into a situation where they are ashamed, and where they lose the sense of who they are,” she said.
“Some of the people who will need to avail of this legislation are older couples, who could have guaranteed loans for younger children for example. They are under terrible stress. An item like an engagement ring can be symbolic of the commitment someone has made many years before, an item which is integral to a family’s fabric. To strip them of that is to strip them of their dignity,” she added.
Sinn Féin TD Jonathan O’Brien said the eligibility criteria for debt relief are “too restrictive”, and more debate was needed on what items should be taken into account when assessing someone’s assets.
