Friday 22 September 2017

2,000 struggling householders a month seek help

Debt agency Mabs is swamped by requests for aid as the impact of mortgage crisis hits home

Jerome Reilly

Jerome Reilly

UP to 2,000 struggling householders a month are turning to a government debt agency for help.

Figures obtained by the Sunday Independent reveal a disturbing rise in the number of cash-strapped people who can no longer afford to pay their bills.

Almost 10,000 people who are being crushed under the weight of a €250m debt mountain appealed to the Money Advice and Budgeting Service (Mabs) for help between January and May this year.

And the agency admits it is struggling to cope with the huge numbers seeking help.

One in four of the 9,667 clients who approached Mabs in the first five months of this year is married with children.

And there has been a massive jump in the number of homeowners who are struggling to pay off their debts.

In the past, people living in the private rented sector and in rented local authority housing made up the bulk of Mabs clients.

But now only 22 per cent of its clients rent houses and apartments privately, while just 15 per cent live in council accommodation.

"It's a sea change from the early days of Mabs and shows the impact of the mortgage crisis," said Tony McQuinn, chief executive of the Citizens Information Board, which administers Mabs for the Government. "That's the big change in the last five years."

The majority of people seeking help with their debt are unemployed.

More than one in four (27 per cent) have jobs, while 4.5 per cent are self-employed.

ANALYSIS PAGE 26

Higher mortgages and negative equity account for most of the cases involving young married couples with dependent children.

Banks and financial institutions are owed just shy of 76 per cent of the €250m owed by the agency's 2013 clients.

This clearly suggests that paying off the mortgage is the major problem for citizens caught in the debt spiral.

The figures also show significant discrepancies in the numbers of people seeking help in different parts of the country.

According to the figures, Donegal North is the worst affected area, with clients having to wait up to 20.2 weeks for an appointment.

Mr McQuinn said this was mostly due to high unemployment. "It is clear that there is a lot of deprivation in Donegal. There is a very high percentage of people with medical cards and who are in receipt of social welfare. I think that [the long waiting list] is indicative of that," he added.

Mr McQuinn told the Sunday Independent that an urgent meeting was planned for next week to boost Mabs resources in Donegal.

He also defended the agency's decision to withdraw from a pilot debt resolution scheme put forward by the Central Bank involving the banks and a number of credit unions outside the Irish League of Credit Unions, which walked out on the process some time ago.

The three-month pilot scheme was designed to create a template in which an independent third party, in this case Mabs, would represent distressed borrowers in dealing with multiple lenders.

Mabs was initially happy with the proposals put forward, but tensions soon arose over how the scheme would operate.

"We were not asked to withdraw. We were agreeable to the original proposals on the table, but in elaboration the proposals suggested a different process than was expected by Mabs. We said that we were not participating in this particular project," Mr McQuinn said.

Irish Independent

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