A lot of the time I get involved in cases at a late stage where the relationship between the borrower (debtor) and their creditors has broken down and unfortunately the creditors are in the process or have issued legal proceedings against the debtor.

 Having unsustainable debt is a very difficult and stressful position to be in as it involves constant phone calls, letters and communication from the creditor as they try to get the case resolved. Thankfully with some hard work and straight talking we can get to a point that in most cases there is a solution that both parties can be agreeable to.

The single biggest flaw in the relationship between the debtor and their creditor is a lack of trust and poor communication on both sides.

In most cases the debtor knows that there is a problem but they don’t know what the solution is and are not confident to deal with the bank themselves so they stop talking and communicating their current financial position to their creditor. This only leads to the creditor becoming more aggressive in chasing the debtor which only makes the situation worse.

It is likely that the debtor has been dealing with the problem for the last 7/8 years since the economic collapse of the Irish economy and the free line of credit from the banks stopped.

My role in these cases whether as a PIP (Personal Insolvency Practitioner) or as part of a debt restructuring arrangement for my client is to act as a mediator or ‘referee’ between the parties. As I have said in most cases there is a middle ground that can be agreed on in the short term, which will then allow us over time to on a medium term plan to bring stability to the situation and take the heat out of what can have become a very fraught relationship.

The following would be a few of the tips I would recommend on how to deal with your creditors:

1. Communicate -  with your creditors at all times,
2. Mediate – if you are unsure what to do ask a friend, parent, family member or business associate to assist you in your discussions with the bank,
3. Co-operate – this is simply understanding and following the banks protocols and providing them with the information that they have requested,
4. Calculate – work out what you can afford to pay and spread this among your creditors,
5. Prioritise your secured creditors, especially your family home,
6. Be honest – if you are struggling (e.g. out of work, sick etc) tell the bank and keep them up to date on your situation,
7. Take notes – keep a copy of all correspondence and note what was discussed in your phone call as you may need this information at some stage in the future,
8. Understand the ground rules – the bank want to be paid what they are owed but will work with you if they can,
9. Educate yourself on the personal insolvency and bankruptcy legislation – this is very important if you find that you cannot meet all of your debts as they fall due or you have unsustainable debt,
10. Know your rights – you have rights and the bank know this so make sure you understand how you should be treated fairly by your creditor,
11. Don’t fear the problem face up to it – be proactive rather than reactive with your financial situation,
12. Look after your mental health – this is very important as if your health deteriorates your financial position could get worse,
13. Don’t give up – there are plenty of solutions and options open that could solve your financial problems,
14. Get good advice – It is critical to have the right person working on your behalf as signing up to the wrong deal will only make the situation worse,
15. Be patient - as it can take sometime to get an agreement in place,
16. You are not alone – unfortunately no one has been left untouched after the economic crash and there are many people in a similar position to you. One of the main reasons the new personal insolvency legislation was put in place was to ensure that anyone with unsustainable debt would have a chance at a fresh start in 5/6 years once their DSA/PIA had been completed.

Quintas are currently running open information evenings on debt resolution and if you would like to avail of a FREE 1:1 appointment with Mark Ryan the Quintas Personal Insolvency Practitioner (PIP) contact us on 021 4641400 or email info@quintas.ie