Saturday 18 January 2020

Dublin nurse secures €152k mortgage debt write-down

Independent.ie reporters

A DUBLIN nurse has secured a €152,000 write-down on her mortgage debt in one of the first recorded examples of debt forgiveness by a major bank, it was reported today.

Laura White (35) agreed the deal with the Bank of Ireland on Monday, settling a case over the shortfall on the sale of a house she voluntarily surrendered three years ago, according to the Irish Times.

The deal means that instead of repaying the outstanding €170,000 owed, she will pay just €18,000 at a rate of €250 a month for six years.

Bank of Ireland subsidiary ICS took legal action against Ms White in 2010 relating to the €245,000 it lent her to buy the house in Coolock, Dublin.

She handed the house back to the bank as she was struggling to make the repayments and wanted to move to the west of Ireland.

The house was sold but left a shortfall of €170,000 on the mortgage owed.

Ms While thought the sale of the property would cover the debt. Her legal team argued that the house should have been sold more quickly before the property market plunged.

Ms White told the Irish Times: "I am just grateful I can pay something back and they have shown leniency. You can’t get blood out of a stone, but it’s important to pay something reasonable and what you can."

Tanaiste Eamon Gilmore today said he welcomed the move by the bank.

Legislation to reform Ireland’s personal insolvency system was due to be published by the end of the month, but is likely to be delayed until the end of June.

This is a very lengthy and complex bill from a legal standpoint, with proposed provisions which do not currently exist in Irish law," a spokeswoman said in an email, published in the Irish Independent yesterday.

"While it was hoped that the bill would be published by April 30, work on its development is still proceeding in the context of the many submissions received on the bill.

"What is important is that we get the bill right," the spokeswoman said, adding that Irish officials had discussed the planned laws with the country's bailout partners this week.

A conference in Dublin last week heard that allowing people to write-down some of their mortgage debts is the way to deal with the housing and personal debt crisis.

A conference organised by the Free Legal Aid Centres (FLAC) heard that allowing people write-downs on their debt in Norway in the 1990s proved effective.

Egil Rokhaug of Norway's ministry of children told the conference his country suffered a similar housing and personal debt crisis in the early 1990s and brought in legislation to include mortgage arrears in court debt settlements.

He said that fears that huge numbers of people would rush to seek mortgage debt forgiveness proved unfounded as just 3,000 had mortgages written down in the end.

Senior policy adviser with FLAC, Paul Joyce, said Ireland's legal system lacks a comprehensive structure for dealing with personal debt.

There are fears among some homeowners that many people who over-extended themselves during boom with large home-loan debt would end up getting debt deals at the expense of those who were more cautious.

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