Personal Insolvency & Debt Solutions in Ireland 2014

Transcription

1 Personal Insolvency & Debt Solutions in Ireland 2014

2 Consumer Debt Crisis? Irish the most Indebted consumers in Europe: Mortgage Debt Personal Debt 140bn approx 30bn Mortgages in arrears 136,000 Approx 1/5 Mortgages in arrears (PPR 17.9%)(BTL 21.1%)over 90 days. 6.9billion almost 2 years in arrears. Credit Card Debt, Credit Union Debt, trade creditors???etc etc Managing and restructuring personal debt is a new Industry in Ireland!!!

3 UK Comparison Debt Stats Very clear and defined structure in the UK. Every 5 minutes someone is declared Bankrupt or Insolvent million debt written off by banks every day. 1.25% arrears rate Over 90 days for Family homes.

4 Social/Psycological factors of consumer Indebtedness We can no longer borrow our way out of Debt, we must budget our way out of debt.

5 Factors in Financial Stress Fear of not paying bills Demand to Pay Frustration at situation Can t handle uncertainty Loss of confidence Lack of concentration Feelings of unworthiness Collapse in self belief Poor decision making Loneliness Grief for old lifestyle

6 Political/Bank Response CCMA 2011 M.A.R.P 2013 M.A.R.P 2 Keane Report Mortgage Debt(PPR/BTL) vs Unsecured Debt Personal Insolvency Legislation 2012 Why not copy UK Insolvency structure 6 years ago??

7 Informal Arrangements Debt Restructuring( 84,053) Temporary options typically suit banks Split mortgage 3.9%, Deferred interest 0.2% Term extension 18.9% Other options for BTL Job Issue Cost Issue(Bank vs customer), who pays? Same result???» Source Central Bank Dec2013

8 Personal Insolvency Insolvency is not an easy get out of debt. Puts you back in Control and gets rid of the stress!!!! The Insolvency options are an alternative to Bankruptcy AND will write off debt.

9 Proven Example Couple with 3 kids, 2 secondary, 1 primary. Cashflow insolvent on a monthly basis. Mortgage circa 600k Unsecured circa 120k Deal agreed by creditors( Bank and Credit Union carried the vote). Approx 70k written off by creditors

10 Assets Value Loan Monthly Income PPR Mortgaged with XXXX 500, , Ist Person Employment Income 3, Other property/debt 1 2nd Person Employment Income 3, Other property/debt 2 Other Income 1 Other property/debt 3 Other Income 2 Other property/debt 4 Other Income 3 Other property/debt 5 Other Income 4 Other property/debt 6 Other Income 5 Other property/debt 7 Total Income 6, Household Goods 5, Jewellery Note Car 1 2, Car 2 8, Other Assets 1 Other Assets 2 Total 516, , Debts Monthly Expenses Secured Debts Secured Loans Total Debts Total Set Costs 2, PPR Mortgaged with XXXX 570, Rent/PPR Mortgage 2, Other property/debt 1 Other Property Mortgage Other property/debt 2 Child Care Costs Other property/debt 3 Other Other property/debt 4 Special Circumstance Costs Other property/debt 5 Reasonable Living Expenses 5, Other property/debt 6 Other property/debt 7 Availabe for Unsecured debt service 1, Total Secured Loans 570, Unsecured Debt payments 2, Unsecured Debts Joint Credit Union 109, Deficit in meeting unsecured debt Credit Card Damian 3, obligations (717.07) Overdraft Damian 3, Joint overdraft 2, Unsecured Debt 5 Note Unsecured Debt 6 Unsecured Debt 7 Unsecured Debt 8 Unsecured Debt 9 Unsecured Debt 10 Total Unsecured Loans 119, Total Debts 690,123.17

11 Return for Repayment Table Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Creditors Total Income Per Month 6, , , , , , Total Set Costs Per Month 2, , , , , , Rent/PPR Mortgage Per Month 2, , , , , , Other Property Mortgage Per Month Child Care Costs Per Month Other Per Month Special Circumstance Costs Per Month Reasonable Living Expenses Per Month 5, , , , , , Monthly amount available for contribution to the arrangement Per Month Annual amount available for contribution to the arrangement Per Annum 10, , , , , , , Proceeds of asset sale One off Less PIP's fees Per Annum 4, , , , , , , Total repayments to unsecured creditors net of PIP's fees Per Annum 5, , , , , , , Repayment breakdown between unsecured creditors PPR Mortgaged with XXXX 0.00% #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Other property/debt % #DIV/0! Joint Credit Union 92.19% 5, , , , , , , % Credit Card Damian 2.67% , % Overdraft Damian 3.19% , % Joint overdraft 1.95% , % Unsecured Debt % #DIV/0! Unsecured Debt % #DIV/0! Unsecured Debt % #DIV/0! Unsecured Debt % #DIV/0! Unsecured Debt % #DIV/0! Unsecured Debt % #DIV/0! Total repayments to unsecured creditors net of PIP's fees 100% 5, , , , , , ,642.00

12 Debt Settlement arrangement Unsecured debts > 20,000 Apply for protective Cert Prevents creditors taking action. Creditors will be offered a % of debt over 5 year period. 65% of creditors must agree Debts discharged after 5 years Only 1 DSA allowed in your lifetime.

13 Personal Insolvency Arrangement Secured and unsecured debts 20k 3million. debts paid back over 6 years. Deal agreed on PPR BTL sold or deal agreed. Voting: 50% secured and unsecured value, one creditors with 65% value could veto. One PIA in your lifetime.

14 Checklist Personal Insolvency VS Bankruptcy Advantages: The amount is based on what you can afford. You can keep your home Creditors bound by agreement Debts written off at the end of term Employment won t be affected. Fewer credit restrictions than Bankruptcy.

15 Questions Call Eugene on Or mail