€170k debt forgiveness ‘watershed’

A mortgage debt forgiveness group has described a bank settlement on a nurse’s €170,000 debt as “a watershed moment” for those facing life-long debt.

Speaking to the Irish Examiner after 35-year-old Laura White agreed to repay Bank of Ireland €18,000 of the debt over the next six years — meaning €152,000 has been written off — New Beginning spokesman David Hall said the move offers hope to thousands of people in similar situations.

Mr Hall said the deal should be a “reality check” to banks that they cannot keep “torturing” people who genuinely cannot pay.

He added that, as his group is receiving calls from 65-75 people in similar situations to Ms White every day, the settlement should act as further encouragement for Government to provide satisfactory insolvency legislation for Ireland.

“This case is a watershed moment in terms of a reality check for banks and society, and for what’s going to happen in the future,” he said.

“While people have been talking about debt settlements, this is also the first time the issue has been personalised — that a name, a face, can be put to it.

“Laura is not getting a great deal, she’s not getting free money. She’s living in friends’ houses as a 35-year-old and still has to repay, but what she is getting is the chance to repay what she can.

“The reality is this [significant mortgage debts where it is claimed the person cannot repay] will be done by negotiation in the future.”

Ms White said “the banks have shown great mercy” in agreeing to the write-down in her hour of need, adding that the move offers hope for other people.

Ms White bought a house in Coolock, Dublin, for €245,000 in 2005.

However, as the recession took hold, she was unable to keep up repayments, and voluntarily surrendered the property in 2009.

Bank of Ireland’s subsidiary, ICS Building Society, originally lent Ms White the mortgage, and took legal action in 2010 to reclaim the funds.

After a legal challenge from Ms White, supported by the New Beginning group, the settlement was reached — a move the nurse told RTÉ Radio’s Morning Ireland gives hope to others facing a similar crisis.

* More information at www.newbeginning.ie and [e-mail].