DURING HIS TIME AS national spokesperson for the Money Advice and Budgeting Service (MABS), Michael Culloty has repeatedly come face-to-face with the grave impact that mortgage arrears can have on people.
It’s an issue he estimates 34,000 people in Ireland have experienced for at least two years, but most of these people are unaware that there is free mortgage arrears support available. Culloty explains a new service called Abhaile:
“Most people who find themselves in long-term mortgage arrears are not aware of the support available to them. Abhaile provides vouchers for free financial and legal advice and help from experts, which are available through MABS. We’ve seen first-hand the effect mortgage arrears has on people.”
The hardship of finding yourself in mortgage arrears is something that can filter down into your daily life, both as a family and as an individual. Culloty says:
We’ve seen relationship breakdown, people suffering from depression, people who are living on cereal with their families not eating properly, giving as much as they can to their mortgage, trying to stay afloat and keep things in place like the lights and heat on.
Indeed, a recent Focus Ireland study revealed that a third of people in Ireland are struggling to afford their rent or mortgage each month, which can take a significant toll on their mental and physical health.
For those facing into financial strife, Culloty reiterates that there is help at hand, and has four invaluable pieces of advice to offer:
When letters from creditors or solicitors begin to arrive in the door, it’s a very natural response to bury your head in the sand in the hope that the problem will go away. In fact, Culloty estimates through their Court Mentor Service that hundreds of people don’t show up to their repossession hearing in court.
Very often there is a strong power imbalance between creditor and debtor, and the people you see in debt have lost confidence in themselves and their ability to manage money. Creditors have probably come down heavy on them and they haven’t been cooperating, therefore people may be suffering.
However, Culloty would like to remind people that help is immediately available once you step foot in court through mortgage arrears resolution service, Abhaile. MABS supply court mentors and a duty solicitor who can speak on your behalf or support you if you cannot pay for your own legal representation.
If they get a court date, we would encourage them to turn up and look for the MABS person or to look for the duty solicitor in court to help them to address the court in the first instance and then to advise them where to get advice from there on in.
For some of the people who have come through MABS’ doors, the organisation has insisted that they visit their GP first before they even consider their mortgage, which when in arrears, “can affect your whole life, the way you interact with others, the way you treat yourself and your family”.
It’s absolutely crucial that you talk to someone about the financial difficulties you are facing, says Culloty, who says that, “sometimes among men pride tends to be tied up in their ability to manage money and they may be very slow to tell their partners”:
We have come across instances where the partner hasn’t known for years that the mortgage wasn’t being paid. You hear stories of men trying to hide post. Particularly in that situation they really should talk to us, even anonymously, by calling our helpline (0761 07 2000) and just talking it through. They don’t have to make any commitments or give any personal details if they don’t want but it’s so important.
When threats of relationship breakdown and depression may loom, it’s absolutely vital that people get the support they need and are entitled to. Culloty has unfortunately, encountered people who have felt that they couldn’t go on with their lives because of the difficulties they were experiencing.
“Remember that this problem will pass, all problems do pass and this one will pass as well. One way of increasing the negative impact on your health is by doing nothing, of ruminating about it, or not speaking to anyone about it or just worrying about it on your own.”
In Culloty’s experience, availing of independent financial advice at a time when it’s needed can have an immediate positive effect on people:
The impact is palpable. You can almost see people walking out lighter than they went in, and they will tell you that in no uncertain terms after a few meetings, particularly when they begin to see and realise that repossession is not imminent, that there are options out there.
In particular, under the Abhaile scheme, which is operated through MABS, people in mortgage arrears may be entitled to free, independent expert financial and legal advice, which will help them to identify their best option to get back on track.
For those currently trying to manoeuvre mortgage arrears, it’s important that we consider financial commitments importantly and realistically: “Very often in the past, we ignored the small print and for many that really comes to haunt them.”
Getting advice from independent financial sources, and not the internet or people who may have their own agendas, is crucial:
In the past there was advice given that really served creditors more than customers. Even today looking at some of the banking ads, you’d think, has the culture changed? Are people just seen as fodder for making profit? Is there a need for an increased culture of social responsibility within the banking industry?
Culloty advises to be careful about what you sign, the amount of money you borrow and be aware of the terms and conditions you’re taking on.
“Be prudent and see what you can afford long-term, put aside money for a rainy day and most important focus on your life overall and not just the mortgage. Look after your most important asset – and that is your health and the health of your family.
The Government has put Abhaile in place to help people who are insolvent and in serious mortgage arrears on their home to access free, independent, expert advice. Abhaile provides financial and/or legal advice and assistance to people in this situation to help mortgage holders in arrears to find the best solutions and keep them wherever possible, in their own homes.
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