James Fitzsimons: We can finally turn the tables and say 'no' to lenders
New personal insolvency arrangements mean the financial institutions will actually pay for their sins
IF you live in a dream home but cannot make your mortgage payments as they fall due, maybe it's time you considered personal insolvency. If your problems are short-term, but the banks won't listen to reason, it could be the solution.
You don't have to be bankrupt to get help, at least not after today. From tomorrow you can apply for a Personal Insolvency Arrangement. You can only do it by engaging the services of a PIP (Personal Insolvency Practitioner) who will try to broker a deal with your creditors. You'll find a list of their names on the ISI website (www.isi.gov.ie).
If you owe no more than €20,000, you can apply for a Debt Relief Notice. The application must be filed on your behalf by an authorised intermediary such as Mabs, which doesn't get a fee. The ISI charges €100. It only covers unsecured debts such as credit cards, but not your mortgage. If there's nothing left after basic living expenses and you've no assets it could work. After three years your debts are written off. If your income goes up, half of it could be given to your creditors. But once half of what you owe is repaid, the rest is written off.