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People may leave homes 'despite new debt rules'


PEOPLE who cannot afford their mortgage may not want to stay in the house, flying in the face of new debt rules, an insolvency expert has said.

This is known as 'buyer's regret', where people whose home purchase dream has gone sour may decide they want nothing more to do with the property.

Sean Kelly at Farrell Grant Sparks was analysing new personal insolvency rules, which are expected to become law before the end of the year.

They have been designed to ensure people with a mortgage they cannot manage are not forced to leave their home.

But thousands of borrowers may prefer to leave a home and rent somewhere else, Mr Kelly said.

This could mean there would be a smaller take-up for personal insolvency arrangements than the Government is expecting.

Such an arrangement is for people unable to pay mortgage and other debts of between €20,000 and €3m.

An insolvency trustee, working for the family, would put proposals to the bank to have some of the debt written off at the end of six years. This allows them to stay in the home. Banks will have an effective veto on any mortgage debt deals.

Irish Independent