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Monday 26 September 2016

Free legal aid for families facing repossessions

Published 02/06/2016 | 02:30

Tánaiste and Justice Minister Frances Fitzgerald Photo: Collins
Tánaiste and Justice Minister Frances Fitzgerald Photo: Collins

The Government is set to announce that free legal aid will be offered to those facing repossession of their home and those facing bankruptcy.

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And a scheme to fund the cost of a consultation with a personal insolvency practitioner has also been put in place, the Irish Independent has learned.

In what is set to be a three-pronged support scheme for distressed homeowners, Tánaiste and Justice Minister Frances Fitzgerald will also announce financial supports for homeowners who want to appeal the rejection by their bank of a Personal Insolvency Arrangement (PIA).

The initiatives are designed to ensure those in arrears are not forced to give up their homes to repossession.

Aimed at boosting the appeal of the debt deals brokered through the Insolvency Service of Ireland, the new supports also effectively amount to publicly funded professional advice.

This is something that has been called for by David Hall of the Irish Mortgage Holders Organisation.

Under the new assistance scheme, the Legal Aid Board has been told to extend the provision of solicitors to those facing repossession or bankruptcy in court.

There will also be funding of €500 provided for heavily indebted householders to have a consultation with a personal insolvency practitioner (Pip).

And the services of a Pip and a solicitor will be provided for those seeking to appeal the rejection of a PIA in court.

A PIA is a restructuring of mortgage and other debts, up to €3m, with a lower repayment made over a six-year period. Sometimes debts are written off.

The latest moves come after the Money Advice and Budgeting Service started sending its staff into repossession hearings in courts to help those facing the loss of their homes.

There has been a perception that the options offered through the Insolvency Service are only for those who can afford to pay a Pip, even though the creditor tends to pay up.

A source close to the Department of Justice said: "This is about taking all the costs out of the system for an insolvent person. If you want help, this means you can get it for free."

The hope is that those who are deep in arrears will no longer have reasons not to engage with their bank or with a Pip.

Announced in January but only put in place now, the new support scheme for those in arrears is set to be unveiled by Ms Fitzgerald in the coming days.

Irish Independent

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