Jim
I understand point 4, but it must be rare.
The only other one of those explanations I follow, is point 2.
The bank is happy to accept €1,500 a month.
The OA says pay no more than €500.
The bank says "Ok, we will repossess"
If bankruptcy is reduced to one year, the bank will say "OK, pay €500 for one year and then €1,500 per year after that"
So this is a case where the bank would welcome the bankruptcy period being reduced to one year.
If the bankruptcy writes off the unsecured debt owed to the credit unions, thus making the mortgage more sustainable, it could also result in more bankruptcies which would be welcomed by the banks.
Consider the most typical cases of family home repossessions:
The borrower simply refuses to engage with the lender. They pay nothing and they refuse any contact. They may do this because they know that their mortgage is completely unsustainable.
The lender applies for a repossession order to force them to engage with them.
After engagement, it becomes clear that the borrower will never be able to pay the mortgage, so the home is repossessed anyway.
Changing bankruptcy to one year will not change this.
Changing the rules of the PIA could reduce repossessions
The lender has a veto on the PIA. If the court was allowed to write down debt or impose a split mortgage, then it would reduce repossessions.
I was initially opposed to this. Now, I would support it if it is a two way process. If the court decides that the mortgage is unsustainable or that the borrower is not paying what they could, then the court would order an immediate repossession without any of the repeated court hearings.
So this would actually increase repossessions and not reduce them.