David Hall outlines a new solution to mortgage arrears with the Irish Mortgage Holders Organisation
It is hard to believe, when you have been living in the quiet hell of Mortgage Arrears that you can still be your family’s hero.
This week a national campaign has started where the Irish Mortgage Holders Organisation (IMHO) are asking you, if you are in long term Mortgage Arrears to contact us.
I know, and the IMHO know how hard Mortgage Arrears is.
This has been our business for half a decade.
You lose hope, direction, even the capacity to voice your case.
Every envelope that comes in the door is a stealth bomber.
But there are solutions.
In the case of the Irish Mortgage Holders Organisation 90% of people we work with stay in their homes.
No matter how steep it is debt can be controlled and managed in a pragmatic way.
I have been involved in helping those with debt since 2010 and in 2012 established the Irish Mortgage Holders Organisation to provide professional services to those in debt.
Here I outline the 10 vital steps to deal with debt based on experience of dealing with creditors nationally.
Step 1 – Do your figures
Establish exactly how much you owe to the different creditors.
Next calculate what the value of your assets are.
This is vital to establish if your assets are more than your liabilities.
Property prices have been moving considerably in recent years’, so it is important to be accurate.
Finally establish how much your household income is each month – this is key to establish how much you have available to pay creditors each month.
Step 2 – Find out how much you can spend
If you are in trouble the Insolvency Service of Ireland has set out what it considers to be reasonable living expenses.
The figures are available on www.backontrack.ie and explain what different family sizes should be living on each month.
You also need to make sure that you consider payments towards a mortgage or rent along with any health and medical expenses, childcare costs or any other special circumstances that might arise.
Step 3 – Find out what your options are
Find out what it is that you can do. The best place to start is get expert professional advice – either from a Personal Insolvency Practitioner (PIP) regulated by the Insolvency Service of Ireland or a debt management professional regulated by the Central Bank of Ireland.
Most professionals don’t charge for an initial meeting and a new Government scheme called Abhaile allows for you to meet with a PIP for free.
There is now no excuse not to access professional help and it is never too late to get help.
The Abhaile scheme also allows for legal help if you are in court facing repossession of your Family home.
Your options will fall into one of three categories – a) informal direct negotiations with your lender, b) a Personal Insolvency Arrangement which is a formal arrangement, protected by the courts and arranged by a PIP or c) the option of last resort - Bankruptcy.
Step 4 - Engage
Dealing with debt is daunting, unpleasant and sometimes scary. However, like going to the doctor if you are sick you must engage with the process, your creditors and professionals who can help you.
Engagement isn’t simply writing letters and occasionally answering calls.
It involves knowing what you are dealing with, finding out the rules of engagement in whatever process you choose and then committing to and executing what is required.
Step 5 - Find out if you are at risk of vultures coming on the scene
For many people, there is a risk that your loan will or has already been sold to a Vulture Fund.
Vulture’s mean a couple of things.
Firstly, if your loan is sold it probably means delay in anything happening while the vultures set up operations and get through the files.
Don’t be lulled into a false sense of security - just because you haven’t heard from the vulture fund. They will be back.
It also means that the restructuring options that may have been open to you with your original lender may not be available with the vulture fund.
This is very bad news and if you are looking to restructure a loan. It is vital that you engage now ahead of any risk of a loan being sold to a vulture fund. And be clear … they will come after your family home.
Step 6 - Compare the different options to see which one is best
Compare the pros and cons of each option that is open to you. Maybe informal negotiations will be quicker, but will they deal with all your debt? Is bankruptcy the only option or could you try an insolvency arrangement. You need to compare and make sure you are doing the right thing.
A professional expert adviser will help you with this and should explain to you the different options.
Step 7 - Act Now
Don’t leave your head in the sand - the problem won’t go away unfortunately. You need to act immediately. A professional adviser is your first port of call. If you are struggling with debt contact professionals such as the IMHO today.
Step 8 - Mind your head
Mental health is important. Debt is a stressful thing to deal with. If you are feeling under pressure or anxious talk to your GP or contact the Samaritans. While dealing with debt is important minding yourself and those important to you is the most important thing.
Step 9 - Stay sceptical
When you decide as to what to do make sure to stick to the plan. There are lots of snake oil salesmen out there who will promise you all sorts of magical solutions to wipe out your debt. Unfortunately, there is no such thing as a free house and be very wary of anybody who comes telling you about legal remedies that just don’t stack up.
If anybody promises you something, ask them for proof of it working elsewhere. Ask for a court ruling or another official document. Most importantly if you are promised something and provided with paperwork get a second qualified legal professional. If it sounds too good to be true it probably is.
Step 10 - Take a break
The banks close at the weekend and in the evenings. The postman only comes once a day. When Friday evening comes forget about banks, debt and insolvency. Try to relax with your family and friends ready to push on again next week. Please engage with a trusted third party next week and work towards giving you and your family a fresh start.
When you go through this process you may wish to contact the IMHO or i-Care.
It is not easy for those of you who are in Mortgage Arrears to believe you can be your family’s hero possibly just in time for Christmas by simply phoning us.
Mortgage Arrears is as disruptive for many families and people as a death or a divorce.
However, the IMHO and i-Care has begun the process of unwinding this living nightmare.
Currently vultures are circling your towns, villages and communities in the hope they will profit from the zombie economics of Mortgage Arrears.
But, if you call us quickly enough your Christmas present may be securing your family home for this Christmas and thirty more to come.
The Irish Mortgage Holders Organisation and David Hall can be contacted at 1800988977