New Beginning, the not-for-profit group which has been helping struggling homeowners battle a tide of house repossessions, is to open a specialist insolvency service in the summer.
More than 2,500 people in trouble with their mortgages have so far sought help from the organisation, which provides free legal aid to those facing repossession of the family home.
New Beginning was established in late 2010 by businessman David Hall and barristers Ross Maguire and Vincent Martin. It now has around 70 solicitors and barristers offering their services free of charge as well as several economists and business people.
Mr Hall, who owns a private ambulance company, said the mortgage arrears resolution process was, effectively, just a holding area. “It is like a waiting room in a hospital’s accident and emergency department. You are being held there without a diagnosis and solution, which is urgently required.”
Mr Hall said plans for the new insolvency service were well advanced and expected that it would be up and running in two months’ time.
Mr Hall said borrowers needed a competent, professional organisation, not only to advocate on their behalf, but to negotiate a long-term financial restructuring based on their ability to pay.
“People will be charged on a not-for-profit basis and it will not be anywhere near what a commercial organisation would be charging.”
Mr Hall said the process would become cheaper as more people availed of it; and it would become more powerful in negotiating with the banks.
Mr Hall said the legal service for people before the courts facing repossession of their family home would still be provided free of charge. “Of course, if someone comes to us seeking a solution to their debt problem and genuinely cannot afford to pay for the service, they will be looked after.”
Mr Hall said the collective power of those paying for the service would support those very vulnerable people who were unable to do so.
He pointed out that 80% of people who contacted New Beginning had not yet entered the court process.
“The service will be different to the bank because it will be able to come up with long-term solutions as opposed to the current weary and dreary commentary that arises every time mortgage arrears figures are published,” he said.
Mr Hall said the Central Bank, banks and the Government were aware of the statistics for residential mortgage arrears and their response had been pathetic.
“Insolvency legislation is urgently needed to provide a backdrop against which negotiations can properly take place for long-term sustainable solutions.”
Mr Hall said the solutions would not just benefit the borrower but the entire economy by having people know where they stand over the next five to 10 years.
Mr Hall said the people employed to provide the specialist service would not be any of the people involved in setting it up.
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