Over 400 attend meeting on dealing with household debt

More than 400 people attended a seminar on dealing with debt held in Dublin last night.

The seminar, Building Resilience, included guidance on dealing with the burden of debt from New Beginning, and advice from psychologist Shane Martin of Moodwatchers.

Men and women in a wide age range, many with pen and paper in hand, listened to advice supplied by the speakers and asked multiple questions about debt management.

Ross Maguire SC, of New Beginning, said the new insolvency legislation would be a “game changer”.

He said they had noticed “banks becoming more aggressive” in advance of its introduction.

In one recent case, a senior garda with a mortgage of €200,000 on an ordinary house in Dublin had received a letter from AIB saying they had reviewed his financial position and it was unsustainable.

“If it is the case that a working person can’t live in an ordinary part of Dublin, that is unacceptable,” Mr Maguire said.

“There must be a structure so that you can be made solvent again.”

Banks were also now resisting offers of surrender.

“The banks don’t like that now, they say would you not hold on to the property,” Mr Maguire said.

He also said some subprime lenders had “become more and more user friendly” having started off as the most difficult.

Mr Maguire told the seminar bankruptcy had a certain stigma attached to it in Ireland, but under the new insolvency legislation, it was a card that borrowers could play in order to reach an arrangement with lenders.

He said he believed in the majority of cases, "there will be arrangements made that are informal. Over the next six months or a year there is going to be this cat and mouse as the situation plays out, but the key to it is bankruptcy."

Way out
The banks would begin to realise it was providing a way out for people who would be free of debt in three years, so they will begin to "move toward arrangements" provided for under the new legislation.

“Then when they realise that personal insolvency practitioners have to be paid, they will move toward informal arrangements with borrowers,” he said. “It just has to happen and when it does happen we will move to the end of the crisis and the beginning of recovery.”

He warned though that borrowers would have to have realistic expectations and be prepared to “share the pain”.

Questions were taken from the floor including from one man who complained his lender had been making “special visits” to his home three times a week.