Families with mortgage arrears to get free legal advice

Families with mortgage arrears are to be offered free legal and financial advice after the Government announced the national roll-out of a new scheme to help them.

The Abhaile scheme was introduced in parts of the country during the summer and assistance has been offered to 983 families.

Tánaiste Frances Fitzgerald and Minister for Social Protection Leo Varadkar on Monday outlined details of how it will work nationally.

Mr Varadkar said mortgage arrears have fallen but there is still a significant number of people who are in long-term debt.

“We are particularly concerned about those in long-term arrears and there are 34,000 who are in arrears for more than two years. They are the ones we really want to focus on and try to help out.”

The number of mortgages in arrears fell to 11 per cent of all residential mortgages by the end of the second quarter of 2016. This was down 4.5 per cent on the previous three-month period.However, long-term arrears continue to be a difficulty.

Accounts in arrears of more than 720 days constituted 43 per cent of all mortgages in arrears, and accounted for 87 per cent of the arrears balances outstanding.

The new service will appoint the Money Advice and Budgeting Service (MABS) as a one-stop shop for people at risk of losing their homes.

Abhaile will allow people struggling with their mortgages to access the expertise of an accountant, personal insolvency practitioner or a solicitor free of charge. Eligible clients will be given vouchers to cover the cost of legal or financial advice.

Those who are eligible can also be offered assistance at court if facing repossession.

Ms Fitzgerald said the key challenge in resolving mortgage disputes is non-engagement with debtors and the courts. She said those in debt are overcome with fear and worry and refuse to seek help or assistance.

The Tánaiste said the message from the Government is for people to engage and ensure they are not faced with losing their homes.

However, she acknowledged that in some cases repossession is the only outcome but insisted all avenues would be explored before that point.

“This is all about people facing the reality . . . This service is about trying to reach out to those people to try to make sure and face the reality.

“If they do not have the money to stay in their homes and there is no arrangement possible through the combination of financial and legal advice [offered] then there will be a reality to be faced.Those people will be supported also in this scheme.”

The scheme has been allocated a budget of €15 million for the period 2017 to 2019.

Funding for the current year is being provided by the Department of Social Protection and the Department of Justice.

The scheme is expected to operate for a maximum period of three years, and will be reviewed after six months and yearly thereafter in the light of take-up and outcomes.

‘Fear, anxiety and isolation’

Meanwhile, the Insolvency Service of Ireland (ISI) has launched a new phase of its Back on Track information campaign. The theme was influenced by research the ISI carried out with people experiencing unmanageable debt who spoke of the "fear, anxiety and isolation".

However, people who availed of an ISI solution spoke of the immense sense of relief once they took the first step to address their debt problems and the breathing space that comes with the protective certificate, a court order that stops creditors from making contact with the debtor while their arrangement is being put in place.

Lorcan O’Connor, director of the ISI, said: “It is important for people to recognise that there are solutions and supports available. In launching our information campaign today we hope that message will resonate clearly with those that need our help. This campaign, combined with the supports available under Abhaile should ensure that many more people come forward for help over the coming months.”