Sir, – A letter from the Community Action Network in relation to the Abhaile scheme (January 30th) implies that as the recently published report shows that 30 per cent of people who have received advice on foot of the scheme have a solution in place or will have within one year of taking up advice, therefore the service is failing 70 per cent. What the report says is that over and above the 30 per cent referred to, a further 53 per cent of borrowers who engaged with Abhaile are still in their homes and are receiving ongoing support from their Abhaile financial adviser who is working with the borrower to get a solution in place.
In relation to the duty solicitor aspect of the scheme, duty solicitors are able to speak on behalf of persons facing repossession proceedings in many courts though not in all of them – these matters are managed within the courts, which are independent in the performance of their functions. Court mentors are also in place to provide support.
In the vast majority of cases there is unlikely to be a legal defence to repossession proceedings. If a lending institution takes proceedings to repossess a property on account of mortgage arrears, assuming that the arrears are due and that procedural requirements are met, it is highly unlikely that a court will be able to do anything other than grant the lending institution the order it seeks, though in practice courts tend to give borrowers as much time as possible to engage with the lending institution to explore solutions.
Mortgage arrears are a financial rather than a legal problem, albeit one with legal components. Providing legal representation for repossession is not going to resolve mortgage debt difficulties or come up with solutions.
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The benefit of a borrower having a dedicated mortgage adviser or a personal insolvency practitioner, available on the Abhaile scheme, is that he or she can work on behalf of the borrower with the lending institution to try and come up with those solutions, which can include alternative payment arrangements, moving from mortgage to rent and, for some, personal insolvency arrangements, which can have a very significant legal component. They involve a personal insolvency practitioner trying to agree with a borrower’s creditors a proposed solution and a path to return to solvency and this may involve creditors taking a cut in the debt due. The legal component is that the personal insolvency practitioner can apply to the court to try and force the creditors, including any lending institution, to accept the personal insolvency arrangement proposal if the creditors are unwilling to agree to do so. These applications are fully supported by the Abhaile scheme and as the recent report notes, in the second year of the scheme approximately 64 per cent of the concluded cases reported successful outcomes.
In terms of people at risk of losing their home on account of mortgage arrears, I believe they have nothing to lose, and possibly retention of their home to gain, by making contact with the Abhaile scheme (through the Money Advice and Budgeting Service). Getting advice from a financial adviser or a solicitor through the Abhaile scheme is not a commitment to taking any particular course of action or staying within the scheme. The majority of those who engage with the scheme stay with it as it is offering pathways to solutions for many. – Yours, etc,
JOHN McDAID,
Chief Executive,
Legal Aid Board,
Smithfield,
Dublin 7.