AIB to offer long-term solutions to help customers in arrears

AIB mortgage holders in arrears can expect to be contacted by their bank and offered a long-term solution to their debt problems before the end of this month, according to internal correspondence at the bank which has been seen by the Irish Examiner.

AIB wrote to all staff members in the wake of the publication of the personal insolvency bill last week outlining measures that the bank will take to tackle the growing problem of arrears.

“During July and August 2012, the team working at the centre in our Arrears Support Unit will identify customers in difficulty from two groupings,” the letter to staff said.

“One group being customers who have identified themselves as pre-arrears or are already in early arrears, [EBS] and the second group is customers who are in serious arrears [typically over 90 days in arrears with repayments]. Customers will be contacted during this period and offered the new longer-term solutions.”

The bank will not be offering a write-down on any of the debt owed, but will offer either a short-term forbearance solution, split mortgage, negative equity trade down or a voluntary sale for loss.

The director of the Free Legal Advice Centre, Noeline Blackwell, said that mortgage holders needed to be prepared and supported in order to deal with the banks.

“You need to be tough to bargain with a bank. you need to know what it is you can do. The support that people need is not available. Mabs [money advice and budgeting service] is completely over-extended,” said Ms Blackwell.

AIB has trained 300 staff in how to fill out a standard financial statement. These staff will be involved in assessing of the customer’s repayment capacity, including their wider personal debt issues.

“This standard financial statement information will be used to determine the level of repayments that the customer can sustain and at the same time maintain an appropriate standard of living for a customer in their circumstances,” the letter to staff said.

Ms Blackwell said that FLAC has never come across anyone with mortgage debt alone.

“We’ve encountered nobody that only has mortgage debt.

“People have credit card debts and personal loans. [It’s] not just mortgage that needs to be factored in,” she said.

The bank said that, in some instances, they would consolidate all of a borrowers loans into one single-debt solution.