Financial Services providers seek to work fairly and sympathetically with borrowers who encounter problems in meeting their debt repayments to come up with a workable solution for all parties. There are a range of initiatives in place to ensure that borrowers find a solution to meet their specific financial situation. These include:
- BPFI / MABS Protocol
- Mortgage Arrears Resolution Process
- Insolvency Arrangements
The following steps should be considered and followed by borrowers who may be in difficulty:
- Contact your lender as soon as possible if you’re having trouble with your repayments or you are concerned that this might be likely to happen
- Look at your financial situation to make sure that you’re maximising your income and draw up a budget based on your most important spending commitments
- Respond to letters or phone calls from your lender or their legal representative
- If you are genuinely unable to make your repayments, ask your lender to explore alternative repayment options with you.
The country’s leading credit institutions have subscribed to a Protocol to help personal customers to manage their debt. Developed jointly by Banking & Payment Federation Ireland (BPFI) and the Money Advice and Budgeting Service (MABS), the ‘BPFI/MABS Operational Protocol: Working Together to Help Customers/Clients in Financial Difficulty’ enables BPFI creditors and MABS money advisers to work together effectively to help personal customers/clients to address and manage debt problems and to formulate a mutually-acceptable, affordable and sustainable repayment plan. It sets out the agreed steps by which creditors and money advisers can work together to put such a plan in place and to successfully manage that plan on an ongoing basis. View the BPFI/MABS Operational Protocol: Working Together to Help Customers/Clients in Financial Difficulty here.
The Protocol is broken down into two main parts as follows:
- General Principles – set out the partnership approach to be pursued by creditors and money advisers and the framework for addressing debt problems
- Procedures – define the general arrangements for good engagement, the five key steps to agreeing a repayment plan and the process for managing an agreed repayment plan.
Banking & Payments Federation Ireland (BPFI) has published an information and advice leaflet for customers in mortgage arrears, Important Information to Help People in Mortgage Arrears. This leaflet, written in plain English and approved by the National Adult Literary Agency (NALA), is a further attempt to get distressed borrowers to engage with their lenders in order to explore possible solutions.
Protection from BPFI and MABS Framework Agreement
In addition to the Central Bank’s CCMA, Banking & Payments Federation Ireland (BPFI) and the Money Advice & Budgeting Service (MABS) have developed a framework agreement that outlines how borrowers in long-term mortgage arrears will be assisted in engaging with their lender. The agreement is called BPFI-MABS Framework Agreement for Late-Stage Mortgage Arrears and can be seen here.
The Framework Agreement sets out the steps that the two parties will take in working together to find a resolution to the borrower’s arrears, mindful that these are cases that have exhausted the MARP process or that are entering or have entered the legal process. While the cases to which this agreement applies are already treated as priority cases by mortgage lenders, the involvement of DMA MABS will provide further dedicated independent mortgage arrears advice to such borrowers.
If you need advice and assistance to deal with mortgage arrears or other debt, you can contact the State’s Money Advice and Budgeting Service (MABS). The MABS service is a free, independent, confidential and nonjudgemental service which is provided by skilled and experienced advisors for people who are in debt or at risk of getting into debt.
Abhaile is a service to help homeowners find a resolution to their home mortgage arrears. It provides vouchers for free financial and legal advice and help from experts, which are available through MABS.
The aim of Abhaile is to help mortgage holders in arrears to find the best solutions and to keep them, wherever possible, in their own homes. A dedicated adviser will work with you and your lender to find the best solution for your situation.
Contact: 0761 07 2000 (Monday – Friday 9am – 8pm)
Where a borrower believes that they are insolvent i.e. unable to meet their loan repayments while maintaining a minimum standard of living they may be eligible for a personal insolvency arrangement. The Insolvency Service of Ireland (ISI) is responsible for the personal insolvency framework. Check out the website set up to help borrowers find out more about insolvency solutions at BackonTrack.ie
The Personal Insolvency Act introduced three new structures to deal with unsustainable debt, both secured and unsecured, as follows:
- A Debt Relief Notice (DRN) to allow for the write-off of debt up to €35,000, subject to a 3-year supervision period
- A Debt Settlement Arrangement (DSA) for the agreed settlement of unsecured debt, with no limit involved, normally over 5 years
- A Personal Insolvency Arrangement (PIA) for the agreed settlement of secured debt up to €3 million (though this cap can be increased) and unsecured debt, with no limit involved, normally over 6 years.
Further details of the insolvency framework and the individual arrangements are available at the ISI website. View the ISI website.
Citizens Information Service
The Citizens Information Board is the statutory body which supports the provision of information, advice and advocacy on a broad range of public and social services. You can get information and advice face-to-face at your local Citizens Information Centre by phone through the Citizens Information Phone Service on 1890 777 121, or by clicking here to access the Citizens Information website.
The Citizens Information Board and MABS recently launched the keepingyourhome.ie website, which aims to provide comprehensive information to anyone who faces losing their home because of mortgage repayment or rent payment difficulties.
Free Legal Aid Centres (FLAC) is an independent charity that campaigns on legal issues. It provides an information and referral line (1890 350 250) and organises evening Legal Advice Centres throughout Ireland in conjunction with the Citizens Information Board. Click here to access the FLAC website.
Competition and Consumer Protection Commission
The Competition and Consumer Protection Commission’s personal finance information website provides information and advice on a range of financial issues including managing your money, tackling debt and repossession and making a complaint. Access the Competition and Consumer Protection Commission website.
Where a borrower believes that they are in serious financial difficulty and a voluntary payment plan or insolvency arrangement is not sustainable, they may consider bankruptcy. The rules regarding Bankruptcy were amended in 2016 to reduce the duration of an arrangement to 12 months, previously 3 years. The duration of a bankruptcy payment order was reduced from 5 years to 3 years, except in cases of non co-operation or the concealment of assets when it can be extended for a longer period.
The Insolvency Service of Ireland (ISI) is responsible for the bankruptcy system and further details can be found at the ISI website. Visit the ISI website