The recession of 2011 affected many people in Ireland, and that’s when we started working with people in mortgage distress here at New Beginning. Mortgage distress is where people have fallen behind on their mortgage repayments and their house is under threat. This was the case for many of our clients and the banks had started repossessing their homes.
Imagine what it must feel like to be out of a job or have a business that has collapsed. Your only solace is your home and family – and then a bank writes to say it wants to take your home from you.

It Can Happen to Anyone

Even though the worst of the recession has passed, so many people still find themselves in debt, which is the biggest cause of financial stress. Debt can happen to anyone. Most of our clients are in full time jobs and live in nice houses, but behind closed doors, there are sleepless nights and the continual nagging feeling that things are spiralling out of control.

Who’s Calling the Shots?

When talking with our clients, the emotion we come across a lot is a sense of loss of control. We don’t mean that our clients are control freaks; like all of us, they just want their lives to have some order so that they can plan for and have a secure future.
Debt attacks this order. How can we plan for a future when that future now looks like it’s being controlled by a bank or creditor? We’ve met hundreds of people who expected to retire by a certain age with financial stability, only now to face the threat of losing it all.
This can be hugely distressing for people and can affect lots of different parts of our lives, from mental health to relationships. If you or somebody you know is currently in this situation, please try not to worry; there is always an answer.

The answer is always to take back control.

Taking back control is made up of 2 distinct steps;

  • Educate yourself
  • Take action

Education

It’s so important to educate yourself when trying to take control of your debts. This might sound obvious, but many people struggle with this because there are many different elements to debt management.

The Four Elements of Debt Education:

  1. Financial understanding
  2. Legal understanding
  3. An understanding of the different creditors (organisations/businesses you owe money to) and how they’ll behave
  4. Understanding the various statutory and regulatory solutions available to you

Most people wouldn’t have a clear understanding of all of these areas and not even one professional group has access to all these skills.

That’s why at New Beginning we have access to three distinct professional types:

  • Debt Management Experts
  • Personal Insolvency Practitioners (to guide you through personal insolvency/bankruptcy)
  • Lawyers

We look at each of our clients’ cases as individual and bring in the relevant expertise to make sure that our clients can take back control of their financial life and get the best possible outcome. Whatever situation our clients’ are in, they’ll always have four options to help them deal with their debt.

The Options:

Do nothing

This might sound a bit strange but this is often the best option. ‘Doing nothing’ in this instance, however, doesn’t mean burying your head in the sand and hoping the problem will go away. It’s often only for a short time and is for a number of different reasons, the top one being protection. For instance, many people jumped into surrendering properties to banks between 2012 and 2014, thinking that they had no other choice. The banks sold these properties off at excruciatingly cheap prices, meaning that the property owner still had debt leftover to pay even after losing their home, and nothing to pay it with. If they had only kept their houses, that leftover debt would now be gone.
Fear and panic can cause us to make hasty decisions when trying to deal with debt, but if you understand the reasons you’re doing (or not doing) something, you should come out on top.

Negotiate

While most people can feel bombarded or overwhelmed by creditors when in debt, the truth is that most creditors do not want to enforce against borrowers. They know and understand that in many cases a person simply cannot afford to pay what is owed and want to make a deal.
There is a way to deal with them, however, and to take control of creditors rather than feeling like they’re controlling you. Negotiation is made more difficult when there are a lot of different agencies that you owe money to; the key is to deal with them in order of priority.

Personal Insolvency

Personal Insolvency means being unable to pay your debts or bills/mortgage. Before the Personal Insolvency Act 2012, if this had been the situation for you, chances are you probably would’ve had to declare bankruptcy in order to satisfy your creditors. Times have thankfully changed, however, and Ireland now has one of the most powerful insolvency systems in the world. There are also special safeguards in place which means that if you own a home, it’s protected.

How Your Home is Protected:

  • Under insolvency, you offer a deal to the organisations you owe money to
  • If a home is involved, the process will be overseen by a court
  • The court has the power to force your creditors to accept your deal so that your home isn’t lost

Bankruptcy

This is the nuclear option for debt. It destroys all debt no matter who it’s owed to or how big it is. Bankruptcy is always the final option and applies only to a small number of cases. Ireland’s bankruptcy system isn’t as harsh as many other countries’; a person who has been declared bankrupt can now be debt free and able to start again in one year.

Conclusion

If debt is or could be an issue for you it is time to give yourself a break. At New Beginning we can help in every case. You do not need to suffer alone.

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