JOHN FROM DUBLIN:John didn't want to be identified in case it caused problems with his lenders. He has debts of €358,000.
His biggest is a €279,000 mortgage on the family home, including arrears of €17,000. He owes €28,000 to a credit union, €11,000 on a car loan, €5,000 on a credit card and €18,000 on guarantees on loans made to his now defunct business.
He worked in the building industry, earning up to €80,000 a year during the boom. He remortgaged the family home in 2006 to clear debts and expand his business, but since the property crash, he has been unable to find work and has been drawing the dole for 18 months now. He estimates that the family home is worth between €200,000 and €220,000 now.
John, his wife and three children live on the €1,482 he receives every month on the dole, of which €200 goes towards reducing his unsecured debts through a payment plan agreed with the Money Advice and Budgeting Service. He receives a further €650 a month for his mortgage to stay in his family home. He and his wife shop at Lidl or Aldi and they don’t socialise.
“The standard of living is dire,” he said. “We can’t get out of the country because we have no capital to start somewhere else. If I was single, I would have emigrated and tried to service my debts. But I am a family guy. It is about surviving – if there is enough food in the fridge, that is a result.”
John doesn’t like that he is surviving financially at the discretion of his mortgage lender and plans to look at how the new personal insolvency legislation can offer a permanent solution for his debts.
“I need to think about a more long-term plan. We are not really living – we are just existing. With regard to paying back debts, it is just not sustainable. Unless the economy takes a serious turn for the better, it is just not feasible.”
Adrian Conlon, Athy, Co Kildare
Conlon owes AIB €2.1 million, including a mortgage of €380,000 on his home. The remainder of the debt relates to business loans advanced for a shop, property investments and an oil company.
He is paying capital and interest on his home loan but interest only on the remaining €1.7 million of debt. He is liable for €1.3 million of this debt based on personal guarantees he gave on the business loans.
Conlon said his business is “basically breaking even and just about carrying the interest-only payments”. Income from the business has fallen to about €6,000 a month, down from €20,000 a month at the peak of the boom. He moved to interest-only payments on these loans in July and believes that the bank will work with him as he tries to resolve his debt problems.
“From what I can gather I think they will give us time. They can’t get blood out of a stone,” he said.
He has no intention of walking away from his debt but plans to consider options available under the personal insolvency changes.
“We are looking at all our options. But we would honour all our commitments however long it will take – I won’t be looking for a soft option,” he said.
