Borrowers urged to avoid ‘strategic default’

Borrowers are being urged against deliberate non-mortgage repayment — in a hope of attracting debt forgiveness — ahead of new legislation being passed.

The Association of Chartered Certified Accountants (ACCA Ireland) said, yesterday, that to view the pending personal insolvency legislation as some kind of magic wand could be a grave mistake by consumers.

ACCA said it fully understands that many borrowers are unable to meet their mortgage repayments, but warned against borrowers opting for a so-called “lifestyle strategic default” option, whereby they use their mortgage payments for lifestyle spending choices instead — all in the hope that the new legislation could usher in debt forgiveness alternatives.