Increased support for borrowers in Covid mortgage difficulty – Burke

Borrowers in Westmeath who have seen their incomes hit by the Covid-19 crisis will have greater access to insolvency supports and services under new government measures, a Fine Gael minister has said.

Peter Burke welcomed the development of a new bill from Minister for Justice Helen McEntee which will remove obstacles to accessing protections offered by the Personal Insolvency Acts for homeowners whose incomes have been hit by Covid-19.

“A key protection under existing legislation allows homeowners who are struggling to pay what they owe the right to seek a court review if their lender refuses a reasonable request for a personal insolvency arrangement,” Minister Burke.

“However, this currently applies only to home mortgage arrears dating before January 1, 2015.

“In the context of the Covid-19 pandemic, this risks denying access to this protection to those who have seen their income seriously reduced because of the current crisis.

“The new bill will correct this problem and will remove the condition that mortgage arrears must pre-date January 1, 2015.

“I know from talking to constituents that people continue to be worried about meeting their mortgage payments due to the uncertain labour market and the new Level 3 restrictions which unfortunately saw many dismissed from work for another period.

“I would urge anyone who is anxious to engage with their banks and request that a solution is found in the short term.

The Personal Insolvency (Amendment) (No.1) Bill is a priority for the government in the autumn Dáil session and Minister McEntee hopes to have the full bill passed as quickly as possible.

“The bill will also increase the personal asset ceiling for a debtor to be eligible for a Debt Relief Notice (DRN) from €400 to €1,500. A Debt Relief Notice is a mechanism which allows for the resolution of qualifying debt up to €35,000 and is designed for those who have very low disposable income or assets.

Minister Burke said the new upper limit to increase the personal asset ceiling will take account of state social protection grants, such as fuel allowance and carer’s support grant, that are paid as lump sums.

“It is important to remember too that certain assets – such as necessary household items, items used for work or study and a car to the value of €5,000 – are excluded from calculations of the personal assets ceilings.”

Minster McEntee said: “The government is determined to reform our personal insolvency system and this is a first step and will help those affected by Covid.”