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Friday 29 August 2014

Mortgage payments reduced

Case study

Published 26/11/2013 | 21:42

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IN their early 50s, Ann and Barry (names changed to protect identity) live in Cork and are married with children who are grown up and no longer dependents.

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Barry is employed as an office assistant manager earning €2,382 a month after tax. Ann is a dental assistant earning €1,560 net a month.

They have incurred some health expenses towards one of their grown-up children's health problems which has contributed to their financial difficulties.

They owe €275,000 on their family home mortgage and have unsecured debts of €44,500, credit card bills of €7,500, another bank loan of €14,500, and a credit union loan of €15,000.

The total unsecured debt comes to €81,500.

Under a deal struck between Grant Thornton Debt Solutions and the banks, the couple is allowed set costs of €1,473 a month and vouched medical expenses of €226 per month.

They will have their mortgage repayment reduced to €1,173 a month, as this is the rental cost for a standard property in the area.

The total living expenses allowed amount to €2,872 per month.

This will leave a total of €1,010 for them to service the arrangement.

A proposal is made to standardise the monthly repayments on the family home at €1,173 per month for the five years of the arrangement, which will allow them to pay €1,010 per month (€61,000) to the unsecured creditors for the course of the arrangement.

This means the unsecured creditors will get 74pc of what they are owed.

Irish Independent

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