Greg (56) and Sandra (57) got a Personal Insolvency Arrangement with Mortgage to Rent
They faced losing everything as a result of mounting debt.
Greg (56) and Sandra (57) are married with grown-up children. Greg was a self-employed small builder in the lead-up to the financial crash. He had borrowed heavily to purchase land to build a number of houses. While he managed to build the houses, he was unable to sell them at a price that would clear the associated debts. Greg had tried to secure work in the construction sector in the meantime, but he has been unable to find work.
Sandra works with the HSE as a Home Help assistant and has worked with the HSE for 21 years. Her income is modest and does not provide a capacity to fund a restructured mortgage loan. They faced losing everything as a result of mounting debts. They heard of the Abhaile scheme and subsequently contacted a Personal Insolvency Practitioner (PIP.)
Greg and Sandra met with a personal insolvency practitioner from the Abhaile panel of PIPs, who assessed their situation and advised them that a Personal Insolvency Arrangement (PIA) was the best solution for them. The couple were able to access the PIP by availing of vouchers under the Abhaile Scheme.
The best option available to them was to avail of the Mortgage to Rent (MTR) scheme. As part of the MTR process, on the coming into effect of this PIA, the couple will voluntarily surrender their interest in the family home to the secured creditor, with the PIP facilitating this process.
The creditor will sell the property the subject of their security to an Approved Housing Body (AHB) for an amount to be agreed between the creditor and the AHB. Following the purchase of the couple’s family home by the AHB, the couple will be offered a social tenancy agreement providing for the continued occupation of their family home with a social housing rent, subject to the AHB’s standard tenancy agreement terms and conditions.
The PIP has allowed ample timing for the MTR process to conclude (PIA duration is 72 months). By delivering the MTR solution through a PIA, the PIP has ensured that all other debt belonging to the couple (including all remaining mortgage debt which may be outstanding after the MTR transaction completes) is dealt with and written off.
During the PIA, the couple will be required to make a modest contribution of €291 per month – the equivalent of the social housing contribution they will be required to make once the MTR is complete. This will be used to contribute towards the PIP’s fees at no extra cost to the couple, as the mortgage lender has agreed to a capital and interest moratorium on the mortgage to facilitate this.
If you are in mortgage arrears and fear you are at risk of losing your home, you may be eligible for assistance under the Abhaile service. For information, click here or call the MABS dedicated helpline on 0761 07 2000.
Click here to learn more about the mortgage to rent scheme. If you are in mortgage arrears and fear you are at risk of losing your home, you may be eligible for assistance under the Abhaile service. For information, click here or call the MABS dedicated helpline on 0761 07 2000.
The Insolvency Service of Ireland regulates Personal Insolvency Practitioners.
*Names and identifying details have been changed to protect the privacy of individuals.
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