The Minister for Justice and Equality, Frances Fitzgerald T.D., has announced a new Government-funded Scheme to help people who are insolvent, and in mortgage arrears on their home, to access independent expert financial and legal advice.
A number of Government agencies will be involved, including the Money Advice and Budgeting Service (MABS), the Legal Aid Board, the Insolvency Service and the Citizens’ Information Board. The Scheme will be coordinated by the Department of Justice and Equality and the Department of Social Protection.
Minister Fitzgerald said: ‘Many organisations working to help people in debt have underlined the stress and isolation experienced by people who are struggling to get out of debt, and who are at risk of losing their homes due to mortgage arrears. Expert independent advice can break these problems down to manageable solutions, and help people return to solvency, often keeping them in their homes.
I am very pleased to announce this Scheme, which I believe will offer very important support and hope to people in genuine financial distress and anxiety, who can’t afford the help they need. I would strongly encourage anyone worried about mortgage arrears on their home to contact MABS, who are the gateway to this scheme, and who can arrange for advice and representation from a Personal Insolvency Practitioner, a specialised MABS adviser, or a solicitor, as needed.’
The Minister added: ‘The Scheme builds on, and complements, the important range of measures already put in place under the Government’s Framework to Strengthen Support for Mortgage Arrears. Another key element in this Scheme is its provision for legal aid to insolvent borrowers seeking the new Court review under the Personal Insolvency Act 2015, where creditors such as a mortgage lender refuse a Personal Insolvency proposal which includes the borrower’s home.’
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Note to Editors
1) Details of the Scheme
The Scheme has 3 components:
· Financial advice and assistance – home mortgage arrears
Advice and assistance from a Personal Insolvency Practitioner, or other financial adviser as appropriate, drawn from panels agreeing to provide specified levels and amounts of services under the Scheme at fixed cost. This will be provided without cost to an insolvent borrower, under a ‘voucher’ system, and will be accessed through MABS, working in conjunction with the Insolvency Service and the accountancy bodies.
· Legal advice and assistance – home mortgage arrears
Advice and assistance from a solicitor, drawn from panels to be set up by the Legal Aid Board, who agrees to provide specified levels and amounts of services under the Scheme at fixed cost.
Assistance and representation for insolvent borrowers in repossession proceedings involving their home, via a panel of ‘duty solicitors’ at repossession hearings, operated by the Legal Aid Board.
This will be provided without cost to an insolvent borrower, under a ‘voucher’ system, and will be accessed through MABS, working in conjunction with the Legal Aid Board.
· Legal aid – new Court review of ‘bank veto’
Provision for legal aid for insolvent borrowers seeking the new Court review under s. 115A Personal Insolvency Acts, where a borrower’s proposal for a Personal Insolvency Arrangement including mortgage arrears on their home is refused by their creditors. This component will be operated by the Legal Aid Board.
The overall objective of the Scheme is to help people who are insolvent (unable to pay their debts in full as they fall due), and are in serious mortgage arrears on their homes, to access independent expert financial and/or legal advice and assistance, which will help them to find the best possible solutions, with priority to remaining in their homes where possible.
The Scheme will operate for a maximum period of 3 years, and will be reviewed after 6 months and yearly thereafter.
2) Measures taken under Framework to Strengthen Support for Mortgage Arrears
Measures already put in place under the Framework include:
· Enactment on 28 July 2015 of the Personal Insolvency (Amendment) Act 2015, and commencement on 20 November 2015 of the new Court review under s. 115A, where banks refuse a personal insolvency proposal on the borrower’s home;
· Development of Money Advice and Budgeting Service (MABS) as Government’s ‘one-stop shop’ point of information and guidance for homeowners in mortgage arrears, working closely with the Insolvency Service;
· Establishment and staffing of Dedicated Mortgage Arrears MABS centres, in key locations with nationwide coverage, with specialised expertise on mortgage debt;
· Presence of MABS and Insolvency Service at courthouses to provide information and ‘signposting’ support for householders issued with repossession proceedings against their homes (operating nationwide since 1 October, after successful pilot in July). This initiative is facilitated by the Courts Service, and is currently provided for all Circuit Court repossession hearings.