People in mortgage debt urged to seek help quickly

Hundreds of thousands of people struggling to pay their mortgage have been advised to seek help rather than face a debt mountain alone.

With over 100,000 people in Ireland in arrears of 90 days, chief executive of the Irish Brokers Association Ciarán Phelan said that with the Government unable to provide a solution to the crisis, it was important that those struggling realise they are not on their own.

“You can’t get blood from a stone even if you threaten that stone with legal action,” he said.

“We are calling on those who are in financial trouble but have not yet addressed it to begin 2012 by tackling it head on.”

The Irish Brokers Association have advised people to embark on a five-step process towards solving their problems:

* Assessment: If you find that you are constantly in the red or that there’s a risk of you missing loan repayments, then you need to act immediately and start managing debts together.

There’s little point in promising to pay one lender if it means that you cannot pay a more important debt. Collate the details of what you owe, to whom and the various credit terms.

* Budgeting: Listing the income and expenditure of household and prioritising debts will enable you to use your money wisely and it will outline the areas in which you can cut costs.

People should consider opening up a budget account.

* Debt prioritisation: Those struggling need to prioritise debts in order of their needs, rather than in order of which lender shouts loudest.

Communication between lenders and consumers is imperative and is the second step everyone should consider when tackling debt.

Following an initial communication the consumer needs to arrange to sit down with each lender to go through their financial situation and assess what loan terms can be renegotiated to ensure they are both acceptable by the lender and affordable to the consumer.

* Consolidation debt and accessing credit: Families that run up some credit card debt and are unable to reduce the balance immediately could consider consolidating this debt into a personal loan which would offer more competitive interest rates.

You should take expert advice before deciding on this.

Money lenders, whether licensed or unlicensed, are never a good idea due to the high interest rates that they charge.

Borrowing money from friends and family can be complicated and can often end in disputes and should be a last resort and all very specific terms regarding repayment method and duration.

* Get help: Whether it is the Money Advice and Budgeting Service, or an experienced broker there are plenty of experts out there who can assist those in difficult situations.

It’s important that people seek out the help they need.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.