If you don't ask for any debt forgiveness, you won't receive
DEBT forgiveness is available, but here's the catch – if you don't ask, you don't receive.
Successfully negotiating the new insolvency laws will get you debt forgiveness, and I estimate your unsecured debt will be written off to the extent of 60pc or more.
If your mortgage cannot be paid off between now and your retirement age, you should receive a writedown of an appropriate amount.
Why? Because the purpose of the insolvency legislation is to bring you back to solvency within six to seven years.
So if the only way this can be achieved is by debt forgiveness, your personal insolvency practitioner will have to negotiate this for you.
If you cannot pay your mortgage, you cannot be returned to solvency.
I appreciate there are dire cases where a property sale will have to occur, but for most people this isn't the case.
It is the intention of the Central Bank and the Government that those who deserve help should receive it.
However, there is no plan for general debt forgiveness.
Nobody is going to call to your door with a cheque to solve your problem.
Time invested in solving your problem may prove quite rewarding so maybe it's time to focus on your solution.
Here is my suggested borrower's game plan:
* Remember, the targets set for the banks by the Central Bank are not your targets. Your target is to do a reasonable and acceptable deal for your family. Take your time.
* Engage fully in the mortgage arrears process. It's your first line of defence.
* Get yourself an experienced adviser who is registered and qualified to bring you through all processes, including insolvency and even bankruptcy.
* With your adviser, assess all options – direct bank negotiation, insolvency and bankruptcy. This will inform your negotiation position.
* Involve all affected parties in the discussion, particularly guarantors as they may not be in a position to use processes to protect themselves.
* Don't rush into a deal. Even if the mortgage arrears resolution process does not resolve your issue you have three to eight months before repossession can take place.
* If you achieve a protection certificate under the insolvency laws, this stops all your creditors, including your banks, from taking action while the insolvency process is going on (at least 70 days).
* Remember, the bankers you are dealing within are not bad people. Their job is to protect the bank. Your job is to protect your family. That's negotiation.
Fran Dalton is the author of 'Making a Deal with Your Bank – An Insider's Guide to Managing Your Mortgage Debt'