Debtors may be told they must move home

Struggling debtors will be asked by banks to move to cheaper accommodation under certain conditions included in the new insolvency guidelines.

Those working on the deal will also be asked to examine rental websites like Daft.ie to check if there is more suitable and affordable accommodation in the area.

The guidelines said housing and childcare can amount to a significant expense.

They said debtors will not have the luxury of remaining in their home at all costs. They said, if possible, other family members living in the house will be asked to contribute towards the debt settlement.

The guidelines said while people have certain needs based on the composition of the household, the need to have a car and certain childcare costs will vary depending on where they live and their situations.

In drawing up debt resolution plans, the personal insolvency practitioners (PIP) will have to review information on rents in the area to establish if the houses people are living appropriately.

“[The PIP should have regard to] the reasonable living accommodation needs of the debtor and his or her dependents and, having regard to those needs, the cost of alternative accommodation,” it said.

The assessor will also have to examine the likely costs the person will have to endure if they are to remain in their current home.

The guidelines said the PIPs will be able to use their own knowledge of the local housing market and review the rental statistics available from the CSO, Private Residential Tenancies Board, and property websites.

However, the PIPs will have to take into account the different needs of everybody living in the house.

It will have to pay particular attention to special circumstances surrounding debtors or their dependents who have disabilities.

Extra expenses for medical expenses will also be taken into account.

They will also have to allow for contributions debtors are making to children in college and the care of aging relatives.

Along with housing costs, debtors will have to justify the need for a car if the banks are to allow them to keep it.

And, if a car is necessary, the banks will have a say in deciding what type of car is allowed to have.

For people living in urban environments with access to public transport the guidelines said people do not need a vehicle.

“A car will be required where a debtor needs it to travel to and from work,” it said.