Thursday 25 December 2014

Young and old, they come seeking a way out of debt

Published 02/03/2014 | 02:30

New Beginning spokesman Vincent Martin
New Beginning spokesman Vincent Martin

SIX years after Ireland first slid into recession, nearly 200 citizens gathered in a hotel last week to learn how to go bust, rebuild their lives and escape the burden of financial distress.

The eclectic gathering was a snapshot of the country's silent epidemic – the disease of debt.

Young couples shackled by big mortgages and mired in negative equity; middle-aged married couples who bought 'buy-to-lets' for their golden years; and civil servants near retirement age who wondered if they should take a leave of absence if they choose to become bankrupt.

And they were joined by former builders, plasterers and plumbers, retailers, cafe owners and other small business people who have spent six years trying to keep the show on the road since Lehman Brothers imploded in the late summer of 2008.

The New Beginning Road Show came to the Osprey Hotel, Naas, Co Kildare, last Thursday. The insolvency group is organising 30 similar meetings around the country before Easter.

Thursday's meeting in Naas continued until well after 11pm as the question-and-answer session went on for more than 90 minutes.

There was also a thoughtful and compassionate address by psychologist Shane Martin, who laid out in simple terms how to deal with stress arising from debt, the need to show compassion to yourself, the benefits of exercise in warding off depression and the need to retain "social connectiveness".

Many of those who attended the meeting still have their jobs and never lost them during the last six years. Still, at the end of the month, their outgoings exceed their income. In financial terms, their household is bust.

That was the burden that they brought with them and so for the first hour the mood of the meeting was muted as barrister Vincent P Martin and accountant Ruth Fanning laid out in simple terms how to deal with the banks, the Mortgage Arrears Resolution Process (MARP), and how to protect the family home as well as looking at personal insolvency and bankruptcy.

But once the first brave soul from the audience put his hand up, gave his first name and then outlined the details of his own crushing financial worries, the mood changed.

There was an avalanche of specific questions.

And it was an evening full of acronyms – DSA (Debt Settlement Arrangement), PIA (Personal Insolvency Arrangement), PIP (Personal Insolvency Practitioner), ISI (Insolvency Service of Ireland).

New Beginning is not a charity. It charges €3,000 to financially distressed people to bring them through bankruptcy which includes about €1,000 in State fees.

For many of those present, a PIA for the inclusion of secured debt (mortgages) as well as unsecured debt may be the preferred option.

The aim of the PIA is to bring a person back to solvency within a maximum period of six years while at the same time making every effort to secure the family home and any tools of the debtor's trade.

If some of the people at last week's meeting were to act now and enter into a PIA, they will return to solvency in the spring of 2020.

That's 12 years after Ireland crashed in 2008 – longer than some convicted killers spend in prison.

Sunday Independent

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