Mortgage and debt write-off requests jump by 180pc
THERE has been a surge in the number of people applying to do formal debt deals.
New figures from the Insolvency Service of Ireland show that there was an 180pc rise in the numbers applying to have mortgage and other debts written off in a Personal Insolvency Arrangement (PIA).
Figures for the first three months of this year show 1,114 homeowners made an application to put a PIA in place.
This is up from 407 in the first three months of last year. A PIA allows for the restructuring or writing off of mortgage and other debts up to €3m, with the arrangement to last no more than six years.
In the first three months of this year, a total of 179 PIAs were agreed and put in place, a rise of 19pc on the same quarter last year.
An analysis of the outcome of PIAs by the Insolvency Service showed that in 90pc of cases where a family home is involved, the debtor remains in their home.
Where the solution involved the write-off of mortgage debt, the average write-off was €93,338, head of the Insolvency Service Lorcan O'Connor said. Around of a third of cases involve debt being written off, he said.
Some 138 people were declared bankrupt in the first quarter, up 24pc from a year ago.
At the start of last year the bankruptcy term was lowered to one year.
He put the rise in the use of formal debt deals down to the recent launch of Abhaile, the Government's free mortgage arrears support service.
"The number of applications has increased significantly since the launch of Abhaile, the State-funded service for people in home mortgage arrears, under which borrowers can avail of a free consultation with a personal insolvency practitioner," Mr O'Connor said.
He said that a key objective behind the personal insolvency legislation was keeping debtors in their home, and this is being achieved.
He encouraged those in debt to contact the Insolvency Service.