The government has approved the terms of the Personal Insolvency Bill and will publish it on Friday.
Taoiseach Enda Kenny said it was a radical measure that would allow those unable to pay their debts to be discharged from bankruptcy in three years rather than 12.
It will institute non judicial methods of dealing with debt settlement, according to Mr Kenny.
He said banks would have to be more pro-active in dealing with economic problems which were partially of their own making.
Housing Minster Jan O'Sullivan will give more details on Thursday of the proposed mortgage to rent scheme whereby those in difficulties could remain in their house and rent it back from the financial institution.
He said a new Mortgage Advice Service would be set up over the summer to be overseen by the minister for housing.
