Wednesday, July 01, 2009
TENS of thousands of Irish people in debt are enlisting the help of private debt management companies to renegotiate new repayment terms with their lenders.
National Debt Relief, a British firm set up here last August, has dealt with more than 12,000 customers, according to its director.
Another similar firm, Debtadvice.ie, said it too was dealing with "very significant volumes" of people in debt, but would not reveal exact figures.
A spokesman for Debtadvice.ie said people were being "overwhelmed" by debt and that going bankrupt in Ireland was not an option as legislation was "outdated and draconian" compared to the rest of Europe.
He said people in debt were seriously considering travelling to Britain to petition for bankruptcy as they could potentially free themselves from debt after a year.
"Bankruptcy tourism is something that a lot of people are seriously considering."
The director of National Debt Relief warned going bankrupt here had "severe consequences".
"If someone in Ireland declares themselves bankrupt they can remain caught in the process for 12 years more. In England, a bankruptcy can end after as little as 12 months and the slate is wiped clean."
Mr Duffy said it was complex for someone to get back on their feet if they declared themselves bankrupt here.
"It is a nightmare, and people can find it very difficult to access credit afterwards," he said.
Mr Duffy said the firm had set up here due to a large number of enquires to a parent company in Britain.
He said people were reporting big delays with the State-financed Money Advice and Budgeting Service, and needed instant help to manage their debt.
Mr Duffy urged the Government to introduce new rules to help people formally address debt problems.
"We want the Government to introduce legislation to help Irish people to formally address their debt problems without having to go bankrupt," he said.
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