We know that there is a planned scheme for distressed mortgage holders – internal Green Party memos have been shown ­– but there is no current working solution or blueprint, so what must be done?

We rapidly need answers that are fair to all participants. Currently there are three groups at the table – the lender, the borrower and the taxpayer. Taxpayers have already done more than their share and should not be called upon to remedy further issues, leaving the banks and the borrowers to find a middle ground whereby neither party is the ultimate loser.

Industry and consumer bodies must be engaged as soon as possible and the state needs to stay out of this other than as a facilitator or enforcer. If the government gets involved then the taxpayer gets involved and in principle taxpayers hold no further debt to irresponsible borrowers or lenders.

This knocks out ideas such as debt forgiveness – this oft vaunted solution is no more than a direct transfer from people who didn't make mistakes to those who did. They tried it in Taiwan for credit card debt in 2005/06 and it was a disaster. Look at a Taiwanese bank balance sheet during this period and it is almost exclusively built up of credit-card debt. While compassion is prerequisite, bad solutions are not.

The changes long-term must come in the very footing of our debt laws, the ability to declare bankruptcy rather than have it imposed upon you is a first step. An end to the ruling whereby you can be chased for 12 years is paramount – this should be revised to five years or less.

Mortgages that are non-recourse beyond the property itself would be a great idea as banks would make more prudent choices. It would also deter rapid property price inflation as increased access to credit would have larger deposit requirements (independent of credit pricing). Currently you can get a 92% mortgage and at the same time access the cheapest rates available – this business model is flawed; higher LTVs must price risk

Short sales where a person in negative equity can sell their property for less than the mortgage and carry out an unsecured loan for the difference would be a further by-product.

If a bank's only hope for recourse was the property it would compel them to accept alternative solutions.

Allowing a person to sell their actual mortgage would help – it's called 'moving paper'. A person with some arrears may have more luck in selling if the buyer can take on (for instance) their tracker mortgage with the deal and clear the arrears in the process. That way the bank get a performing loan and the buyer gets a good deal on the finance.

The banks made a mistake in forwarding credit but equally the borrower made an mistake in obtaining it. The issue is debt mixed with high unemployment and deflation so the only option may be one that allows both bank and borrower to give something up.

The best we can hope for is a long-term moratorium for those who cannot pay, but rather than piling up interest which would just create deeper unrecoverable negative equity, the banks would instead take a comparable percentage ownership in the property in question and then hold a portion of the actual asset the loan is secured upon as well as the loan.

It is better to have this solution in place than one where the bank repossess a property when the market is at a nadir, remove the tenants who want to stay put, and then both borrower and bank crystallise all losses at a low point. The actual costing of such a scheme, if the figure of 35,000 borrowers in arrears is broadly correct, would be less than €800m. The exit strategy will be tricky but it beats the alternative.

Unfortunately, residential arrears tend to lag commercial arrears so it is likely that we have not seen the worst of what the residential market has to offer.

The whole system, from Nama to mortgages or employment hinges on one factor: recovery. If we don't get recovery it all ends in tears, if we do then the key is to get sufficient forbearance to allow all parties enough breathing room in the interim so that we can fix issues over time when conditions are more favourable.

Sadly, we didn't opt for market solutions which would have seen much of this solved already, so in the coming months the government needs to flex with the banks, not posture, but push, and our Central Bank needs to stop barking and bite if lenders try to avoid the remedy.

We can, and will get out of the hole we nationally dug ourselves into, but we cannot let the prudent take further punishment for the profligate, and the question really comes down to what condition we hope to come out the other side in.

Karl Deeter is operations manager of Irish Mortgage Brokers