Finally, the end is near in what has been a long and tortuous road to bring Ireland’s debt laws into the modern era.
We should thank the Law Reform Commission for its persistent work throughout the years and the IMF for giving this the final major push to force our legislature to act.
The proposed laws will invariably have detractors and supporters. What must be remembered is that deleting the current debt laws from the statute books is cause for celebration. Those old draconian laws stopped serving useful purpose a long time ago.
For those that reach that point in their lives where debt levels are unsustainable, availing of the facilities provided for under the new laws will provide a legal framework under which they can eliminate debt.
This will permit them to return to a life where their income can again support their day-to-day living costs. It will allow them to return to a life that is not governed by the thought of debt, debt servicing, debt management and debt worries morning, noon and even in the depth of night. It will allow parents to become parents again and families to become families again.
That said, the managed and qualified wipe-out of debt under the various provisions will likely raise concerns for those not directly availing of them.
Indebtedness can occur for any variety of reasons, including ill health, family breakdown and of course, loss of income. Since the financial collapse of October 2008 and the ensuing realignment of incomes, many people have lost a significant amount of income as well as net take-home pay. The introduction of the Universal Social Charge has not helped matters. Neither too has the ever-increasing cost of basic necessities, including utilities.
But the new debt laws are not just about those that come to rely on them.
For many, especially those that may never have cause of avail of the facilities provided for under the new debt laws, questions can arise as to the benefits to them personally. This appears to have been a common question raised in many of the public discussions on the new debt laws in general and debt wipe-out in particular. These are valid questions to which there has been a low level of discussion.
Across all modern societies, there has been wide recognition of the benefits of returning those in severe debt to full participation in society. Debt concerns create anxiety, ill health and family breakdown. These issues left unchecked create a drag on society. Additionally, here in Ireland, there have been many elected politicians as well as business leaders that have heralded Ireland’s return to price competitive which, it is claimed has been underpinned by lower wages. While a return to competitiveness is a good thing, it comes at a human cost. Some people fall into indebtedness when their wages and net take-home pay fall. Yet, by falling, society benefits from higher inward investment.
And this is the trade-off. Society and individuals share a cost that provides for a two-way benefit to support one another.
All societies have collective provisions. We collectively share education, defence and health services through taxation. Debt should be no different. Fairly managed through legislation, sound debt laws provide a route back to becoming active participants to those affected.
Perhaps the best analogy of why the new debt laws matter to all citizens comes from nature. Over the years, various outbreaks of diseases affecting livestock have been variously dealt with through a combination of culls and compensation. Affected livestock are destroyed and affected farmers are compensated. This process works as it ensures that farmers play ball in containing disease while the wider community also benefit as disease being spread is significantly reduced and even eliminated.
Debt write-off is not a new concept…it has been debated for centuries and talked about for millennia. In the Book of Leviticus, God councils Moses to forgive debts in certain cases. It seems that the scourge of indebtedness and its menace to society has long been recognised…and dealt with! Finally, here in Ireland, we are about to do the same.