The road ahead will be even more turbulent for mortgage debt says David Hall


David Hall CEO Irish Mortgage Holders Organisation
David Hall, CEO Irish Mortgage Holders Organisation

By Lorna O’Neill

IT is seven years since the crash first turned thousands of Irish people’s lives upside-down but today as he announces free bankruptcy advice one of the men who has hit out against public debt – said “the road ahead will be even more turbulent.”

David Hall, CEO of the Irish Mortgage Holders Organisation, told Ireland Today he was offering a free bankruptcy advice service – where some charge up to  €1500-€7000 – to help those in need as many still struggle with financial burden affecting their future, their families’ future, and their health.

There are 33,000 family homes in arrears of more than two years, with 17,000 legal proceedings before the court.

For David, those in long-term debt have been “abandoned,” by the state – which should have been there to look after its citizens ahead of bondholders.

The Government paid off €3.5 billion of its International Monetary Fund (IMF) debt earlier this year, bringing total repayments to €12.5 billion.

A further €5.5 billion was to be paid off shortly afterwards.

The largest sum of individual debt David has handled has been €70 million and his company estimates it has handled a staggering €1 billion of debt resolutions.

Yet, according to David, there is no let up.

Those in long term debt have been abandoned.  Mental health is a major concern and early next year we will publish current research we are conducting with people in debt.

“We are dealing with every profession in the state.  I advise people to seek independent advice early from a trusted source and not a commercial firm that is trying to sell you a solution.”

Though his fees are free currently, court charges to go through bankruptcy are €270. Though this is a small fee to attempt to rid an individual of debt, David states.

The only improvement ahead the mortgage debt boss feels is the current passing of legislation to bring about one year bankruptcy cases.

“This is expected to be passed by next week and it is the most positive step which was championed by many of us over the past five years but recently the Labour Party,” David said.

The Bankruptcy bill was brought by Labour TD Willie Penrose to cut the three-year rule to one year.

Currently people who exit bankruptcy are often subject to income payments orders for a period of up to five years afterwards, meaning that if their income rises above an agreed amount, creditors will get some of the benefit.

The plans will also aim to cease so called ‘bankruptcy tourism’ under which many Irish people have gone abroad, particularly to the UK, and been declared bankrupt there.

The new legislation would bring Ireland in line with the UK.

In the last two years, statistics from the Central Bank show mortgage arrears have declined.
However, despite an appearance that matters are improving, long term arrears were still increasing.
Recent figures show the first decline in long term arrears but one in eight mortgage accounts on residential homes – 92,291 mortgages – are in arrears.
This statistic fell by 6 per cent over the last three months, but it is significant of a major problem.Mortgages in arrears for more than 720 days – the category  seen as the most difficult to solve – represent just over 40 per cent of all accounts in arrears, according to the Central Bank data

This equates to more than 37,000 households living mortgage debt.

According to the Central Bank figures, around 121,000 mortgage accounts were termed as restructured at the end of September.

But more than 13 per cent of these were failing to meet the terms of their current restructure arrangement.

A faster bankruptcy resolution could provide assistance to many of these desperate families.
But there still does not seem to be an answer to the increasing housing crisis.
The number of homeless families has rose by 76 per cent since the start of the year.
Just over 400 families were homeless at the start of the year and by August that figure had risen to just over 700, a 76 per cent rise in just eight months.


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