Ask The Expert: Week 3 Show Notes - Best Bits

Personal Insolvency Practitioner’s and MABS staff cover a variety of topics on week 3 of our Ask the Expert series. Listed below are questions taken from each interview. If you’d like to hear more of a specific interview, scroll to the bottom of the page where the full recordings are listed as information sources.

What is the Dedicated Mortgage Arrears service?

Yvonne Bogdanovic (MABS) on Live 95:

“A Dedicated Mortgage Arrears Adviser (DMA) is an expert in dealing with mortgages, particularly mortgages that are in difficulty, where there are high arrears, where the arrears have been building over a period of time, where legal action may have started. Where the case is in court for repossession, or even where an order of repossession has already been granted, we have an adviser who knows her way around these and can give people help with getting to the best situation given any one of these things.

The adviser really gets to know the person they're dealing with and works with the person and all they have going on, and tries to find a solution that's going to be holistically workable, that can be afforded, that allows for say, when children are in school or children are in college, and it allows for illnesses and what you might have to pay out for those things.

That can be flexible then if a person goes back to work after redundancy, so we're really trying to find a solution, that is going to get the repayment done but that allows for the fact that life goes on for a person in this situation.”

Let's say I've arrived at court, I'm trembling as you would be, going through security. It’s an awful day for you. How do I find the MABS person?

Gwen Harris (MABS) on Q102:

“Just to warn you that if you arrive outside the repossession hearing, it's very, very busy. It's not like you might imagine it on the telly quite quiet, a few people here and there. There's a lot of people, but there's one and sometimes two MABS staff. They will have their badge on, it will say Abhaile Court Mentor and you can approach them. Give them your name, they will have what's called a court list, which is a list of all the cases that are before the court that day. You give them your name, they'll be able to tell you where about on the list you are. The list could go to 70 cases - 80 cases a few cases. You might not know where you are.

They can also introduce you to another support of Abhaile, the Duty Solicitor who might be there on the day. Now, the Duty Solicitor you don't have to have engaged with them before. If you are attending court, for your own hearing, you don't have to have a solicitor, you can attend and speak on your own behalf.”

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People don't want to tell people that they're in financial difficulty, people don't want to put their hands up and say I'm struggling, I'm in debt, I can't pay my mortgage.

Eugene McDarby (PIP) on LM FM:

“Absolutely, yeah. There's a massive stigma around finance. Ten years I've been involved with this business. I've driven up to people’s houses and the curtains are closed and I was rushed into the house. They don’t want to tell anyone, they don’t want to tell the neighbours and even don't want to tell their kids. In a lot of cases, the husband was keeping it from the wife or vice versa. I think probably in the last 10 years, it’s eased a little bit, certainly when go to see somebody I'll always say, you need to share the problem. Certainly with your partner and they need to understand what's going on.”

If you’re facing repossession it’s important you engage with the services available, it’s never too late to address your home mortgage arrears. Read our tips on what do to if facing repossession.

What about people and you will hear anecdotally about this, people who don't want to pay. Have you come across anyone who could pay but they just don't want to pay? They're trying to get debt write down? Do they exist?

John O’Callaghan (PIP) on C103:

“They do before they meet us, I must confess. There’s a lot of barstool barristers and a lot of people saying oh don’t pay your loan because that will make them pay attention to you. It will, it will make them pay attention to you, to take you to court and take your house. You really have to pay your loan as best you can. But some people come to us with this rather poor advice that says no, I didn't contact them, and I'm not paying them. I don't want to pay them, they should write me down.

When we show them the view of themselves now from the aspect of the creditor, they realize in the very first meeting within half an hour, “oh gee”, I should be paying that mortgage. I can only afford to pay €100, I'll pay that now and we work on the solution. Part of the reason why some people don't want to pay is that if they're paying a €500,000 mortgage on the €300,000 house, they feel they're throwing money, good money after bad.

They feel I never paid €500,000, I may as well not. I may as well be saving up for the doomsday when it occurs. But when they meet a PIP, the PIP will show them that it’s not the €500,000 you have to worry about. Let's pay the €300,000 that the house is worth, let's work with the creditor and what the creditor wants and actually breach the communication gap. The creditor is supposed to be saying to you, don't worry about the €500,000 well sort it out, work with us. But they don't get that message across, the PIP does. And the PIP does take the position between the two.”

Want to know other myths surrounding mortgage arrears? Watch our new video series.

Abhaile has helped 11,000 people receive free financial and legal advice and support. On average 90% of households achieved an arrangement to stay in their home. They're quite impressive figures.

Mitchell O’Brien (PIP) on WLR:

“They are impressive figures. If you consider there were 3,500 Personal Insolvency Arrangements (PIAs) approved up until the end of 2018 according to the Insolvency Service of Ireland. That represents probably 12,000 to 15,000 people who have secured the continued occupation of their family home. That's not insignificant. I would be of the view that the sooner that people get into the process, the better it is for them.

One significant component in the calculations that we do to arrive at a sustainable mortgage payment is the length of the term over which you can repay the mortgage. We can unilaterally extend out the mortgage term until, let's say old age, pension age, or a little bit older if the person is self-employed, and is going to continue working. The longer that people leave it before they seek the advice of MABS or ultimately MABS will refer these onto a Personal Insolvency Practitioner the larger the mortgage payments may be.

The other interesting factor here, I'm just looking down through these cases. In every one of these cases, at the end of the PIA, any negative equity that was in the house was written off. In some cases were Mortgage to Rent that was appropriate, we incorporated Mortgage to Rent into the Personal Insolvency Arrangements to deal with any other debts that somebody would have. They come out the other end of the PIA with their house and either a continuing mortgage payment that's affordable, or as social housing tenant renting through Mortgage to Rent, both with no other debt whatsoever.”

Who agrees to write debt off and will it come back against the people in years to come?

Tara Cheevers (PIP) on GB FM:

“No, it won’t, personal insolvency is a legal formal court order process. Any arrangement, whether it's a Debt Settlement Arrangement (DSA), a Personal Insolvency Arrangement (PIA), or a Debt Relief Note (DRN) they're all done through the court, they are court approved, and thereby everyone has to comply with them.

Any debts dealt with in any of these arrangements, they will not be repaid in full, and there will be debt write down. None of the creditors can pursue those debts in the future where the debtor has complied with the terms and completed their arrangement successfully.”

Information Sources:

Limerick’s Live 95 FM - Limerick Today with Joe Nash Episode 3 (22nd May 2019)

Galway Bay FM - Galway Talks with Keith Finnegan Episode 3 (23rd May 2019)

Dublin’s Q102 – Mornings with Liam and Venetia Episode 3 (22nd May 2019)

LMFM - The 11 – 1 Show with Sinead Brassil Episode 3 (22nd May 2019)

C103 - Cork Today with Patricia Messenger Episode 3 (5th June 2019)

WLR FM - Déise Today with Damien Tiernan Episode (29th May 2019)

If you or someone you know is affected by some of the topics raised in the above discussion, call the MABS dedicated Helpline on 0761 07 2000, or visit mabs.ie/contact to find your local office and to learn more about how Abhaile may help.