‘People treat you like it was all your own fault’

Heartbroken couple Patricia and John Burnett lost their modest bungalow to a lender after falling into arrears on a €169,000 loan, originally taken out on their house in 2006 to pay for business debts.

John was made redundant as a truck driver in 2010 and the couple ran into difficulty meeting mortgage payments on their Tipperary home soon after.

The Burnetts handed over their home on foot of a High Court order after it was repossessed by lenders GE Capital Woodchester.

But even after giving up the keys to their home, they have been left with €166,000 in mortgage debt and a further €60,000 in personal loans.

Patricia assessed the new insolvency laws announced yesterday and said the couple were likely to apply for bankruptcy.

“We could put all our debts together and see about getting some written off or paying others. But one look at the bankruptcy suggests you can make a clean, sharp break from it all three years down the line and get a clean slate.

“But we don’t know the cost. Anyone going through bankruptcy would need a few thousand grand in their back pocket.

“I couldn’t see us trying to pay off the debts. As it is, it’s difficult trying to live day to day with our debts. With bankruptcy, it’s a better option than having to live day-to-day.

“I’ve made agreements to pay some groups I owe maybe €3 a week but I can’t even do that.”

Despite giving up their home back to their lender, the couple are still carrying debts totalling nearly €220,000.

“That’s our situation,” said Patricia. “With three years for bankruptcy, that’s good. At least you can get back on with your life.”

But the new debt resolutions being put into law do not offer debtors an appeals mechanism if lenders refuse to engage in deals. Patricia says this scenario will likely push borrowers towards bankruptcy.

“What are the chances of banks doing deals? I can’t see them wanting to do deals. And those people who can’t get a deal of course will go for bankruptcy.

The Burnetts also have concerns about how they will access the insolvency options. Some of the resolutions will be overseen by an insolvency service, but debtors will still be expected to hire their own representatives to negotiate deals, who will likely be lawyers or accountants and known as personal insolvency practitioners.

“Do I have to get a solicitor and which route will cost me less? €200 or €500 would be a lot of money to hire someone to get advice or handle our case.” she said.

“With bankruptcy, you could be normal... A lot of people treat you like it was all your own fault. But there was a lot of reckless lending in this country and now I can’t even get a few euro from a bank.”