The Government recently approved the extension of the Abhaile scheme over the period 2020-2022 with a view to reaching the remaining households at risk of losing their homes due to mortgage arrears. 2022 is expected to be on a ‘wind-down’ basis, focused on completing any outstanding solutions for borrowers who have been advised under Abhaile; this is subject to Government review in 2021.

Home mortgage arrears have fallen sharply and continue to fall, but the cohort in long term arrears remains significant - at just under 28,000 mortgage accounts. It is hoped that extending Abhaile will enable it to reach the rest of the owners of those homes over the remaining 3 years of the scheme.

The Abhaile scheme was set up by the Government in 2016, to help those in home mortgage arrears. It has so far provided financial advice and negotiation support to over 12,000 households at risk of losing their homes.

Charlie Flanagan TD's comments

Charlie Flanagan TD said: “This is a scheme which has helped many already and which we intend will continue and help many more over the next three years. It is a scheme which is working. To date, 82% of those advised are either on the road to getting a solution or already have one in place. Accordingly, we were delighted to get the backing of our Cabinet colleagues today for this extension”.

Regina Doherty TD's comments

Regina Doherty TD added: “Abhaile is often the first point of contact for distressed mortgage holders and it provides successful solutions - helping to put in place personal insolvency arrangements, alternative repayment plans or other arrangements, such as Mortgage to Rent, that are tailored to the borrower’s individual situation, and are realistic, sustainable and fair, both to borrowers and to creditors. Of those who have engaged with us, the vast majority have managed to stay in their homes”,

What is Abhaile?

Abhaile is the national State funded Mortgage Arrears Resolution Service. It is provided free of charge to insolvent borrowers who are at risk of losing their homes due to mortgage arrears. The Scheme is focused on providing expert financial and legal advice and assistance to identify and put into place solutions to those in arrears that will, wherever possible, enable the borrower to remain in their home.

Abhaile is jointly funded and coordinated by the Department of Justice and Equality and the Department of Employment Affairs and Social Protection. All Abhaile services are confidential and are provided without charge to the borrower. The total funding committed by the Government for this extension is €24.77m. The key plan for the scheme is to target those in financial trouble who have yet to engage with the scheme and to assist them to seek the relevant advice. The two Departments expect that the cost of the demand led scheme over the next three years will amount to €17.27m, while a further €7.5 million will fund the extension of the connected Dedicated Mortgage Arrears service within MABS.

Abhaile was set up in 2016 on foot of a Programme for Government commitment to assist those in financial difficulty due to the economic crash. Over the last three years,

• Abhaile has provided financial advice and negotiation support to over 12,000 households at risk of losing their homes,
• its court mentors provided information and advice to nearly 11,000 unrepresented borrowers at repossession court sittings, and
• its duty solicitors provided legal advice and help at repossession court sittings to over 6,000 unrepresented borrowers.

The latest statistics confirm that while these borrowers are often in very difficult personal and financial trouble that since the scheme was launched:

• over 30% of all borrowers who have been advised by Abhaile already have a solution in place or in train,
• a further 52% of the borrowers advised are continuing to work with their Abhaile financial adviser to get a solution into place, for example by re-establishing regular mortgage repayment records,
• accordingly, 82% in total of those advised have a solution in place, or are on the road to get a solution in place, with the help of their Abhaile advisers,
• the vast majority of those solutions are keeping the borrowers in their homes,
• relatively few have disengaged from Abhaile help (some 13% according to the latest figures – MABS tries to re-contact these borrowers periodically, to encourage them to re-engage),
• very few (about 3%) have lost their homes.

The range of solutions available to help borrowers advised under Abhaile is also growing. This follows recent personal insolvency court review judgments, and the expansion of the Government’s Mortgage to Rent scheme.

What can Abhaile do to help those in financial difficulty?

Abhaile is implemented by the Money Advice and Budgeting Service (MABS), which acts as a single Government portal for advice and support to borrowers, working with the Insolvency Service of Ireland (ISI), the Legal Aid Board (LAB), and the Citizens’ Information Board (CIB). Abhaile provides a range of different services.  These services are:

·         The Personal Insolvency Practitioner Service
·         The Accountant Service
·         The Court Mentor Service
·         The Consultation Solicitor Service
·         The Duty Solicitor Service
·         The Personal Insolvency Court Review Service

How can we help?

Quintas are on the panel of advisors for the Abhaile scheme and as part of this process we have assisted borrowers in trouble to resolve their debts and re-engage with their creditors. This has involved both informal arrangements with creditors and formal personal insolvency arrangements which allows those with unsustainable debts avail of the Personal Insolvency legislation to restructure and write down their debts over the course of the 5/6 year insolvency term.

We have also assisted borrowers’ avail of accelerated insolvency arrangements wherethey were ineligible for a PIA/DSA but through our advice and with financial assistance from the debtors family they were able to offer a lump sum settlement to their creditors and exit their arrangement within 6 to 12 months. Once a borrower has completed their court approved arrangement all of their unsustainable debts are written off and they are in a position to move on with their lives with a long-term restructure in place.

We continue to offer a free consultation to borrowers who are concerned about their debts or who are in fear of losing their family home.

For more information on our personal insolvency and bankruptcy services please click on the link below

Quintas Personal Insolvency and Bankruptcy Services.

Please contact me by phone on 021 464 1400 or by email on mryan@quintas.ie to arrange an appointment.

Regards

Mark Ryan