The Justice Minister says no responsible and average homeowner should be a “sacrificial lamb” for the mistakes of the banks.

Alan Shatter says financial institutions need to engage with struggling borrowers in the spirit of new insolvency legislation once it is in place.

He is ruling out an appeals system for now.

But Minister Shatter says he will have that option if banks do not act fairly.

He is warning banks he will revisit insolvency legislation and make it tougher if they do not engage with it.

The comments come as Mr. Shatter started the committee stage of the Bill in the Oireachtas.

The Bill was approved by the Cabinet back in June of this year.

It will see the length of bankruptcy cut from 12 to 3 years.

It also allows borrowers who cannot pay their mortgages to enter into non-judicial agreements with their banks to allow them to avoid repossessions.

The Minister says while banks have shown willingness on this legislation so far he will be keeping a close eye on it.

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