Tuesday 21 November 2017

Bank of Ireland writes off couple's personal loan debts of €25,000

Bank of Ireland wrote off debts of €25,000 for one couple
Bank of Ireland wrote off debts of €25,000 for one couple

Charlie Weston Personal Finance Editor

DETAILS have emerged of debts being written off by Bank of Ireland.

A Limerick couple had €25,000 in personal loans wiped away by the bank. This represented 90pc of their unsecured debt, according to Kerry-based personal insolvency practitioner and debt manager Brian Leslie, of Prima Finance, who did the deal.

He said the couple were able to make repayments on their mortgage, which is owed to Bank of Ireland's subsidiary ICS, now that most of their personal borrowings with the bank had been written off.

A spokeswoman for Bank of Ireland admitted it sometimes writes off unsecured debt, but not mortgage debt.

"We offer a wide range of solutions based on the needs of the individual mortgage customer. Debt forgiveness is not a forbearance solution of Bank of Ireland."

The bank added: "Our experience is that the vast majority of our customers with debt repayment challenges can be supported in a way which works for the customer and is commercially sensible for the bank."

Bank of Ireland chief executive Richie Boucher said again last week that the bank's policy is not to forgive mortgage debt.

He said the bank will only write off mortgage debt in cases of bankruptcy or personal insolvency, where the bank is forced to make the move.

PRESSURE

His comments have raised questions about the viability of the Insolvency Service of Ireland, which reported recently that there have been only four mortgage-debt deals overseen by it since its inception a year ago.

This is likely to put pressure on Justice Minister Alan Shatter to honour his commitment to review the operation of the Insolvency Service, as banks are seen to be vetoing mortgage-debt deals.

To date, Bank of Ireland has been involved in four personal insolvency arrangements (PIAs), of which it supported two and opposed two – one of which was approved anyway.

Bank of Ireland also said it will seek to recoup the outstanding balance on a home loan even after the property has been sold to pay off the debt, he said.

The bank's tough stance is in contrast to AIB, Ulster Bank and Permanent TSB, who all said last week that people voluntarily selling their home to repay a loan could be allowed to walk away from any residual debts.

David Hall of the Irish Mortgage Holders Organisation said banks preferred to do informal deals rather than legally binding Insolvency Service agreements as they can retain control of the debtors' situation.

Mr Hall accused banks of moving their arrears support units to the law courts, as Bank of Ireland, Ulster Bank, AIB and Permanent TSB admitted issuing a total of 30,000 legal letters to mortgage holders in arrears.

Irish Independent

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