Property & Mortgages

Friday 1 August 2014

Bankruptcy group defends €3k fee it charges distressed borrowers

Charlie Weston Personal Finance Editor

Published 01/03/2014|02:30

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New Beginning spokesman Vincent Martin
New Beginning spokesman Vincent Martin

A GROUP founded by lawyers, which advocates on behalf of heavily indebted consumers, has defended its charges for helping people go bankrupt.

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New Beginning admitted it charges €3,000 to financially distressed people seeking to be declared bankrupt.

The group is currently on a nationwide tour, explaining the ins and outs of bankruptcy as a potential solution to consumers' debt woes.

Co-founder Vincent Martin insisted the charges were competitive and included the fees to be paid to the State as part of the High Court bankruptcy process.

PROACTIVE

New Beginning has been proactive in prompting bankruptcy as a solution for people who are unable to make repayments on mortgages and other debts.

Mr Martin and co-founder, senior counsel Ross Maguire, have featured heavily on RTE Radio and in this newspaper insisting that more should be done to help distressed borrowers.

The group is holding meetings outlining its approach in every county of the country at the moment.

Asked if the fee was €3,000, Mr Martin said it was but said almost €1,000 of this was made up of state fees such as the official assignee's fee and stamp duty.

"Our prices are competitive. The reason for the cost is that bankruptcy is a huge decision to take and we can't do bankruptcy cases professionally relying on part-time or unpaid volunteers. We need experts," Mr Martin added.

He said somebody being taken through bankruptcy would be provided with a financial expert, a solicitor and a barrister by New Beginning.

Some organisations were charging between €10,000 and €12,000 to take people through the process, he insisted.

He denied that New Beginning was set up to provide free legal advice to distressed borrowers, and insisted it has always been upfront about its fees.

Asked if New Beginning was a commercial operation, Mr Martin said: "We are not driven by profit but make no apology for bringing in the best (professionals) and paying them so they will stay in New Beginning."

Mr Martin said the advice agency provided personal insolvency practitioners (Pips) for free for those seeking a debt settlement arrangement or a personal insolvency arrangement.

The founders of New Beginning were not making money out of it, and it is regulated to provide advice by the Central Bank.

Rival body the Irish Mortgage Holders Association (IMHO) said it guided consumers through the bankruptcy process for free, once the individuals pay the state costs.

'GOOSED'

David Hall, of IMHO, said: "It is very hard to ask people for money when they are goosed."

Solicitor Anthony Joyce, of BankruptcyAdvice.ie, charges €500, plus the state fees, for those who are able to fill out the forms themselves after a consultation.

Michael Bolger, of Grant Thornton, said it did not offer bankruptcy services.

However, Mr Bolger said that if it had clients who needed to go through the process it recommended firms that would do it from €700 – excluding state fees – for those individuals who did not need representation in court.

Irish Independent

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