Mortgage debt resolution deals increase but ‘still pathetic’

The number of people dealing with their mortgage debts through the Insolvency Service of Ireland (ISI) has risen in the past year, but the overall figure has been branded “pathetic” by those advocating an overhaul of debt services.

The ISI said yesterday that 150 personal insolvency arrangements (PIAs) for those with mortgage debts were put in place in the three months up to June (Q2).

It said this, and greater numbers of other debt deals, showed that the momentum continues to grow for theservice.

“The report shows continued growth, month on month, in activity across all alternative solutions to bankruptcy,” said ISI director Lorcan O’Connor.

“However, the statistics show a slowdown in the numbers seeking to be declared bankrupt, possibly due to uncertainty over reducing the bankruptcy term from three to one year.

“This quarter has produced more new cases, more protective certificates and more finalised arrangements than in previous quarters.

“However, the number of bankruptcies in Q2 did fall. Arrangements approved in Q2 are 25% higher than Q1. Bankruptcy cases are down 43% over the same period.”

The report reveals the total debt involved in bankruptcy adjudications for Q2 was approximately €1.4bn.

The Irish Mortgage Holders Organisation said that since the launch in 2013, the Insolvency Service has arranged 500 PIAs which equates to just 0.0036% of the total numbers of property accounts in arrears.

IMHO director David Hall said there were around 30,000 families more than two years in arrears on their residential mortgages.

“The number of personal insolvency arrangements (those dealing with properties) achieved by the Insolvency Service in quarter 2 2015 is 150. This pathetic level of activity and growth is described by the insolvency service as ‘momentum’ when in actual fact it’s an embarrassment given the tens of thousands of people crippled with unsustainable debt who need help.

“The failure to address this means that debtors are been tortured further.”

While acknowledging the efforts being made by Justice and Equality Minister Frances Fitzgerald to reform the system, Mr Hall forecast that the figures for the next three months could see the end of the service altogether.

“Minister Fitzgerald has inherited a crock of rubbish from Alan Shatter. She is trying to solve it as best she can but she needs to close it and start again,” he said.