Item Number One for the political agenda when the Dail resumes on 18th September, 2012 should be the Personal Insolvency Bill which, as presently drafted, does NOT provide for a modern bankruptcy regime because it allows banks to stop your bid for bankruptcy. Whilst the pace of increase has relented slightly in the past two quarters, the number of mortgage accounts that are in arrears over 90 days is now at a record level of 83,251. And when you add in all accounts in arrears and those accounts that have been restructured which might not be paying a cent presently, there are over 168,000 accounts out of 760,000 which show some form of distress. The main way forward has to be reform of our bankruptcy laws.
So when Minister for Social Protection Joan Burton (pictured above) this morning announced a scheme to give homeowners being offered a restructuring deal by their bank, access to a free consultation with an accountant up to a value of €250, the response on here was that the initiative is little more than a sticking plaster on a gushing wound. But in the absence of proper bankruptcy, it seems like an honest attempt to provide homeowners with independent professional advice in relation to any restructuring scheme put forward by the banks. The announcement says the cost of the service which is borne wholly by the banks “could be in the region of €10m” which would equate to 40,000 * €250. It has been a long held concern on here that banks would take advantage of financially distressed homeowners to kick them off tracker mortgages in return for any restructuring, a move which could cost homeowners hundreds of thousands of euro over the life of the mortgage. So independent professional advice is to be welcomed, if only to stop banks taking advantage of a bad situation.
It is the banks that are paying for the consultation. In the case of PTSB, AIB/EBS, IBRC and to an extent Bank of Ireland, that means the State paying for the advice because we own these banks. However it seems that all banks, including Ulster, KBC, National Irish and Bank of Scotland/Halifax are included in the scheme.
How do you access the new service? Take a look at the government-run KeepingYourHome.ie website and contact the Mortgage Arrears Information helpline on 0761 07 4050. Your bank should make you aware of the new service launched today.