New plan gives ‘fresh start’ to distressed mortgage holders

The statutory body tasked with returning people in debt to solvency has welcomed the introduction of a new scheme aimed at assisting distressed mortgage holders.

The establishment of the new Scheme of Aid & Advice for Borrowers in Home Mortgage Arrears coincides with the announcement that 793 people have been discharged from bankruptcy following the new one-year bankruptcy term.

Lorcan O’Connor, director of the Insolvency Service of Ireland, said help is there for those who need it: “The new Scheme of Aid and Advice for Borrowers in Home Mortgage Arrears, which provides free access to a Personal Insolvency Practitioner and other professional advice, should ensure that anyone in difficulty can now get the help they need. This should result in even more people finding permanent and sustainable solutions over the coming months.”

Speaking on RTÉ’s Morning Ireland, Mr O’Connor said 793 people discharged from bankruptcy yesterday now have a ‘fresh start’.

“They are completely debt-free as a result of exiting bankruptcy,” he said. “There was legislation introduced in January which meant that anybody entering bankruptcy would only be subject to a one-year term.”

“There were also then transitional provisions for those that were already in the system, so what that has meant is that anyone who has already served one year of bankruptcy exits today, and anyone remaining in the system will have done less than one year, and whenever they reach that point in time they will exit bankruptcy.

“It is certainly not to suggest that bankruptcy is an easy process for a debtor — you do lose your assets in bankruptcy. However, you do also deal with all of your debts. You are debt-free, you do have an opportunity for a fresh start, which is hopefully going to be very positive for those 800 people.”

Mr O’Connor said there are more than 30,000 mortgages in default of two years or more, but stressed that the help is there for those people.

“We have seen over 120,000 informal arrangements reached with people who are in mortgage difficulties and there have been other arrangements, we have dealt with three and a half thousand cases,” he said.

“Somebody who seeks help under that scheme will get the help that they need and they will be kept in the system, having their hand held, the arm over the shoulder, until we reach that solution. For anybody who is in that long term arrears, and will be under the fear of losing their home, the message is to go to backontrack.ie or call MABS or the Insolvency Service of Ireland and we will ensure that you will get the help that you need.

“The courts are sympathetic to people who have demonstrated that they have engaged. Now that you have this new scheme in operation, certainly one would expect that if you are faced with a repossession court hearing, that you would be telling the judge or the county registrar that you have actually engaged with MABS or the Insolvency Service of Ireland under this new scheme in efforts to try and avoid, ultimately, that loss of the home.”


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