The State’s free money advice service has secured millions of euro in debt write-offs since January for people struggling with problem debt.
New figures show that the Money Advice and Budgeting Service (Mabs) has used the debt relief notice (DRN) scheme to secure €238,000 in debt write-offs for 17 qualifying clients who engaged with its Cork City service alone in the first quarter of the year.
It is one of the highest rates of DRN write-offs in the country. The individual write-offs ranged from €3,000 for one client to €32,000 for another.
Cork Mabs co-ordinator Margaret O’Neill described the DRN scheme as a “golden ticket” for people struggling with unsecured debt.
“It really is a once-in-a-lifetime golden ticket. You can simply walk away from the debts. There are no hidden strings. This is a means to a fresh start,” she said. “We all know the symptoms of carrying problem debt. When this kind of unsecured debt becomes unmanageable, people need support.
“This scheme is aimed at people trying to get their life back on track, and can provide for full relief of burden debt up to a maximum of €35,000.”
The DRN scheme is part of the Government’s insolvency legislation introduced in 2012.
It is designed for people who have less than €35,000 in qualifying debt such as Revenue, credit card and utility bills, bank, credit union, or money lender loans, and other forms of unsecured debt, and who have few assets and a low income.
Applicants cannot have an interest in property, and must be living in rented accommodation or with their parents. Ms O’Neill said people who apply to Mabs to avail of the scheme will meet with one of their ‘approved intermediaries’ who assess each case individually.
Subject to certain criteria, successful applicants must agree to certain obligations for three years, after which the debts are simply written off, thanks to an agreed protocol with the Irish Banking Federation Institute.
Ms O’Neill said the DNR scheme is just one of the many free and confidential debt solutions provided by Mabs.
“We are the gateway to debt solutions. For some people, the DRN is the perfect solution, but there are others,” she said.
New figures show that Mabs is also negotiating with lenders on behalf of 1,440 long-term mortgage arrears householders.
Mabs staff have been attending all repossession hearings since last October 1 and are now seeing more referrals from the courts to their dedicated mortgage arrears advice team.
Mabs national development officer Michael Culloty said these specialist mortgage advisers are giving people in mortgage distress a “fighting chance”.
“It is evident that even at a late stage, deals can be put in place that will keep people in their homes,” he said.
However, he said that, in other cases, lenders need to “get real” in terms of their expectations and demands.
“Unfortunately, some lenders and credit servicing firms have their eye only on the rising property market and, where there is an amount of equity in the property, some seem fixated on getting their hands on an appreciating asset no matter what the cost to the homeowner,” he said.
Mabs can be contacted on 0761 072000 or through its website, www.mabs.ie.
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