NOTHING AFFECTS PEOPLE quite like debt.
Historically it has such a dark and sinister undertone that the majority of people keep as far away from as possible. Or at least, nobody takes out a loan not expecting to pay it back. Everybody does their absolute best to pay it back but as so often happens there is a life-changing event that plunges people into difficulty.
This time around, it’s not a personal event that has caused the onset of the problems, it’s been a global disaster. The financial tsunami that we have experienced in Ireland means that it is affecting far more people than it ever has done in the past.
Most people find it easier to talk about a lump on their body than a struggle to pay the bills
Many people will find it easier to talk about a lump that they have found somewhere on their body than be willing to talk about their struggles to pay or not pay the bills. It shouldn’t be that way but unfortunately that is the way that it has always been.
I have just published a book, Don’t Panic, which attempts to tackle the issue of debt and advise how you can start to arrange a solution to the problems that you are facing.
The book was prompted by the new legislation that has been introduced to deal with personal insolvency.
Everyone was waiting with bated breath to see if it would provide the solution that everyone craved. Debt writedown was whispered in corners, out of the earshot of the banks. No end of people were waiting for an end to their stress and worries with the hope of being able to start their lives again.
Unfortunately that didn’t happen and the new legislation has been met with consternation, confusion and a certain amount of resentment because of the limitations that it imposes. Equally so, there is no questioning that it has spectacularly underdelivered in relation to the most important aspect – bankruptcy.
But it still represents real opportunity to those who use it correctly, whether that is by implementing one of the measures or by using the options that are available as a bargaining tool.
It is all about education though. Unless you learn about the options available, educate and empower yourself to use them successfully, it is impossible to make informed decisions about your path forward.
Debt brings with it huge social and personal cost. Look around you; you will see it everywhere. I see soup kitchens where there were none before, the number of people sleeping in streets is massively on the increase and there is increasing social unrest amongst the youth of Ireland, who have little to do and little to look forward to.
We cannot control what the government does with budgets and austerity measures to put the country back on track but you can regain control over your personal situation.
Time to bed in
Granted, it will take a little time and any new insolvency legislation does take time to bed in. Look at the United Kingdom, there was the same consternation, confusion and resentment when the legislation was changed over two decades ago but it now is an efficient system that allows people to start again. It has its critics but it works! Right now, Ireland is at the start of that cycle and it may well take five years to bed in, as it did in the United Kingdom but everyone has the right to avail of the legislation and in my opinion, they should.
So while most commentators will tell you that the new legislation is an unmitigated disaster, with the exception of the bankruptcy component, I’d say that it can work. But if you don’t understand it, and don’t educate yourselves about the options available, the Insolvency Service of Ireland will sit idle.
Please don’t allow that to happen.
Everybody deserves a second chance. I know. I have more than one of those after the collapse of the bank and an injunction for £100m, followed by a serious battle with cancer. Don’t be overwhelmed or embarrassed by the situation that you find yourself in, there is always a solution at hand but you will need to look for help and advice. I hope that this book will be the first step in that direction.
Debt is quite simply an affordability issue:
- If you can afford to pay, you should
- If you can’t afford to pay, you simply can’t and a solution has to be found.
With the education that is required in this area, there also needs to be a fundamental shift in the way that people approach mortgage debt and the family home. In part, this is included in the new legislation. An example: A couple living in a three-bedroom house on their own with no children who cannot afford to pay the mortgage should simply downsize to a property that they can afford to pay for. If you are living beyond your means, for your own financial and healthy well being, you have to make a change.
Protecting the family home?
Much is being made of protecting the family home at all costs. In many cases this is ridiculous, split mortgages, warehoused sums and 20-year clawbacks are a waste of time. Everybody owes it to themselves to achieve a realistic, sustainable solution. All mortgage debt is secured, banks will expect to receive back all of the money that they have secured on your property. Who can blame them?
But they, as well as you, have never experienced the degree of difficulty that individuals are now facing and are more than aware that they will not see all of their money returned.
Rest assured, there is always a solution. Don’t Panic.
- Nick Leeson’s Don’t Panic is in bookstores now, RRP €9.99, and available at 10% discount online from thehistorypress.ie.