Keeping your home with a Personal Insolvency Arrangement
18th December 2019
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Personal Insolvency Arrangements (PIAs) are becoming an increasingly common option for borrowers in mortgage arrears. On average, there are 20 being PIAs approved by the Courts each week. What can a borrower’s journey look like if they choose to pursue a PIA?
The answer is that it’s different for everyone. Every individual’s circumstance is different, and their situation must be taken on a case by case basis.
The following infographic accounts for all potential steps a borrower may or may not encounter on their journey towards achieving a PIA and keeping their home with Abhaile*. Do not worry if you are working towards a PIA and you do not encounter some of the steps mentioned.
*Abhaile is the Free Mortgage Arrears Support Scheme made up of a network of qualified and regulated financial, legal and insolvency professionals – all of whom will be covered in the borrower’s journey. The Money Advice and Budgeting Service (MABS), Insolvency Service of Ireland (ISI) and the Legal Aid Board (LAB) work holistically and collaboratively to provide the necessary supports under Abhaile.
Stage 1: Borrower before encountering the Abhaile Scheme:
Step 1: Borrower is in late-stage mortgage arrears. (This is considered to be two or more years).
Step 2: Borrower receives a legal letter following their exit from the Mortgage Arrears Resolution Process (MARP) and goes to Court where they meet an Abhaile Court Mentor and Duty Solicitor. The Court Mentor is present at all Circuit Court possession hearings to explain what is happening in the Court. The Duty Solicitor can answer any legal queries a borrower may have, and in some courts can speak on behalf of the borrower.
Stage 2: Borrower working with a MABS Dedicated Mortgage Arrears (DMA) Adviser under Abhaile:
Step 1: Borrower calls the MABS Helpline on 0761 07 2000 or visits their local MABS office .
Step 2: The DMA works with the borrower to complete a Standard Financial Statement (SFS). Once complete they present all available options to the borrower, who decides to explore working with a Personal Insolvency Practitioner (PIP).
Step 3: MABS issue the borrower with a voucher to have a consultation with a Personal Insolvency Practitioner (PIP) .
Stage 3: Borrower working with a PIP under Abhaile:
Step 1: Borrower selects a PIP from the Abhaile PIP Panel which is regulated by the ISI.
Step 2: PIP conducts a Prescribed Financial Statement (PFS), this is a detailed written analysis of a borrower’s financial situation. The PIP then draws up a proposed Personal Insolvency Arrangement (PIA). During the time a borrower works with a PIP, a Protective Certificate is issued by the Courts to ensure the borrower’s creditors cannot pursue them for a period of 70 days.
Stage 4: A legal concern is identified, so the borrower works with a Consultation Solicitor under Abhaile:
Step 1: PIP/Dedicated Mortgage Arrears Adviser (DMA) recommends the borrower see a Consultation Solicitor due to a legal concern in the case.
Step 2: Borrower has a meeting with the Consultation Solicitor (who is regulated by the LAB) and receives legal advice, deciding to proceed once the issue has been clarified.
Stage 5: Following the consultation with the solicitor, the borrower continues working with the PIP:
Step 1: PIP presents the insolvency arrangement to the creditors on behalf of the borrower.
Step 2: If the proposed PIA is rejected by the creditors and not accepted;
Step 3: The PIP may apply for a PIA Court Review Service (S115A) with the assistance of a solicitor who is provided by the LAB Once a Legal Aid Certificate is granted, the borrower and PIP can select a solicitor from a panel .
Step 4: The Court reviews the PIA and finds that is it fair and balanced on both borrower and creditors. The Court approves the PIA, and the borrower achieves a solution.
Step 5: Borrower is returned to solvency and keeps their home.If you or someone you know is in mortgage arrears, please reach out to the free supports available to you through Abhaile. Get started by calling 0761 07 2000 and speaking with an adviser today.