The Government is poised to adopt Fianna Fail’s failed strategy in dealing with the personal debt crisis. This is to camouflage, rather than attack the problem crippling at least 100,000 consumers caught in the vice grip of unsustainable debt by;

• Maintaining the ban on repossessions which delays but does not stop rising bad debts.
• Leave the debt resolution market unreformed and unregulated except for tweaking bankruptcy laws 

• Jack up mortgage interest relief subsidies for recent purchasers which will be swamped by rising interest rates
• Scattergun scarce resources to many people who don't absolutely need it.
• Fail to rescue Irish families, who are coming apart at the seams, from the source of their distress.

That we’ve committed €70 billion to bank recapitalisation to deal with bad debts including projected defaults on home mortgages, but failed to deal with the families being eaten alive by the problem, is obscene – but that’s the plan, still.

The sooner a comprehensive new model for dealing with bad debt in a civilised manner is introduced the sooner we can move on but the issue is weighed down by poorly informed political ideology and a ruling class that clearly has not read or does not grasp the Law Reform Commission report.

This provides the template to tackle bad debt and to deal with defaulting mortgages where the excess over and above current sales prices is treated as a normal unsecured bad debt and chipped away at over five years, thereafter allowing the borrowers a fresh start. Homeowners can be then be given the option of continuing as a tenant paying rent but with first option to buy back from the bank or, to sell and get on with their lives elsewhere.

With 100,000 mortgages and utility bills accelerating into further arrears and faced with continued economic headwinds, it’s pretty damn obvious that there is no way back for many of these families. Hard core bad debts are exactly that, hard core and they ain’t ever coming back, no matter what camouflage is applied. These bad debts are already, globally, recognised as a loss on the balance sheet of the banks which we’ve now recapitalised to deal with them. So why not act now, marrying that bank buffer to the families that badly need our help and through a modern non-judicial debt resolution process?

Is it because of fear of a backlash from the let-them-burn brigade. You’ll hear much of it about and read it in volume on websites; Look pal we did nothing wrong so why should we bail out these people? Their decision, their bad luck, screw them! The issue is shrouded in fear and ignorance about how modern debt resolution processes work but the worst aspect is the nauseating hypocrisy that seeps through it like wet rot.

Those who would deny these distressed families a humane work out to a fresh start are the first to bellow at the EU, IMF and ECB to let the bondholders burn. If European creditor banks and pension funds are to pay the price for their folly then how can we, with the same breath, insist that Irish banks are protected from failing to swallow hard core bad debt at home? Is it because the family next door on jobless benefit with no hope must not be given any, that we must punish them to feel better about ourselves? Sounds awfully like the German right wing bogeyman we’ve conjured up.