Are you in long term mortgage arrears on your family home? Did you know you are not alone, and that over 20,000 households in Ireland are in mortgage arrears of more than 2 years, and of those, over 5,000 households are in mortgage arrears of more than 10 years? Getting into mortgage arrears can happen for many reasons outside our control. It can happen due to ill-health, the loss of income, or simply because something unplanned happens that throws us off course.
Although it might feel like it sometimes, it’s never too late to tackle your mortgage arrears.
Help is at hand – free of charge – under the Abhaile Scheme. The services of Abhaile can be accessed at your local MABS office. And, as with all services provided by MABS, you can be assured that you will be supported in an independent, confidential, and non-judgmental way.
Advice and assistance in relation to your mortgage arrears is available from MABS for anyone who has fallen into arrears on their family home. Also, for those who are in long term mortgage arrears, Abhaile delivers a number of separate advice and support services. These support services are provided free of charge.
Continue reading to learn more.
Am I eligible for mortgage arrears support?
You will be eligible if you are;
- In mortgage arrears on your home;
- Insolvent – In other words, you are unable to pay your debts when they are due;
- At risk of losing your home because of arrears;
- ‘Reasonably accommodated’ – This means that the costs of continuing to live in your home must not be more expensive than is reasonable. For example, you’re not living in a 5-bedroom home on your own.
**MABS or your personal insolvency practitioner can tell you if you meet these conditions
In our experience most everyone in mortgage arrears on their home is eligible to access the supports available. If you’re still not sure or think there is no hope for you then get in touch. Eligibility is reviewed on a case-by-case basis so please contact MABS if you are unsure whether you are eligible for Abhaile.
Do you have mortgage arrears on a buy-to-let property? If your mortgage arrears relate only to a buy-to-let property, you won’t qualify for the Abhaile scheme. However, if you are in mortgage arrears on your home, and you also own a buy-to-let, you will still be eligible if you satisfy the criteria set out above.
What supports are available?
The supports provided under the Abhaile scheme can be categorised into 3 groups;
Court based services
If you are called to court for repossession proceedings on your home, a duty solicitor or a court mentor will be there to help you. The duty solicitor may be able to speak for you in court and explain the court proceedings to you. The court mentor can’t speak for you in court however they will be present on the day of you sitting to answer any questions you have about what is happening and give you more information about Abhaile’s supports.
Financial and Insolvency services
There is a network of Dedicated Mortgage Arrears (DMA) advisers based in MABS offices nationwide. These advisers will be your first port of call. They will explain your options and where possible, help you to achieve a solution which keeps you in your home. They will often speak directly with your lender on your behalf throughout the process.
If the DMA feels that an alternative course of action is more suitable, then they may issue you with a voucher for professional advice from either an accountant or a Personal Insolvency Practitioner (PIP). The accountant will provide financial advice in relation to cases where there are complicated financial issues involved. The PIP will assist you with exploring your options under personal insolvency, if you so wish.
Legal Services and Supports.
If you need legal advice related to your mortgage arrears, you can get a free in-person or online meeting with a consultation solicitor. They will explain your legal situation and advise you about your options to solve your problem.
If you have worked with a PIP and have proposed a personal insolvency arrangement (PIA) to your creditors which has been rejected, your PIP can ask the courts to review it. Under this part of Abhaile, the Personal insolvency court review service, a solicitor and barrister will be provided to represent you in seeking a court review of your PIA proposal. If the court agrees that the proposal is fair and reasonable, your creditors will be instructed to approve and fulfil the proposal.
Continue reading to learn how one couple achieved a solution with the help and support provided by Abhaile;
Term extension in a Personal Insolvency Arrangement
Paul is married and in his 50’s with 2 dependants. He and his wife, Sarah, were just about managing financially but a few years after the recession Sarah got sick and had to leave her job. She has been unable to work since. It became apparent that they could no longer meet their financial obligations on just one wage. They had an outstanding mortgage debt of €230,000 and a credit union debt of €5,000.
PPR (Principal Private Residence) Yes
Any other properties No
The total outstanding debt €230,000
Arrears Balance €11,829.99
Term Remaining 17 years
Interest Rate 4.25%
Monthly contractual amount €1,079.21
Current Monthly Payment When the clients approached the Abhaile service, they were paying €280 p/m
Current Market Value €320,000 (Approx. €90,000 positive equity)
3-bedroom semi-detached property
Paul was referred to a PIP by his accountant. He was given information regarding Abhaile by his PIP who arranged for MABS to issue a voucher, which entitled Paul to a free advice consultation. During the consultation, a full financial assessment was completed. The PIP outlined the options available to him and recommended a Personal Insolvency Arrangement (PIA) as the most suitable for his situation.
After taking some time to consider their options Paul and Sarah decided to enter a PIA. The arrangement was approved and came into effect from April 2021 (8 months after the initial consultation). The proposed PIA was accepted by their creditor. The mortgage was restructured on the following basis:
- Arrears to be capitalised on the successful completion of the PIA.
- The term of the mortgage loan is extended to 252 months (21 years) from the coming into effect of the PIA.
- The interest rate was reduced to a fixed 3% during the arrangement before reverting to a variable 3% on the successful completion of the arrangement.
- The borrowers had to pay €280 per month for 12 months interest only payments, before reverting to full repayments for the remaining terms of the restructured loan.
- A dividend was paid to the credit union which paid the debt in full.
The PIA had a duration of 12 months and has been successfully completed. Paul and Sarah’s situation was a considerable challenge for them not only personally but also as parents. Having a solution for their financial difficulties at last was a relief.
More case studies and examples of Abhaile clients’ outcomes can be read here.