The number of struggling homeowners seeking debt solutions soared by 123 per cent to 1,082 in the second quarter, figures show.
The Insolvency Service of Ireland (ISI) reported the dramatic increase in the number of mortgage holders applying for personal insolvency arrangements (PIAs).
PIAs are specifically designed to help struggling mortgage holders. In total, the agency received 1,259 debt solution applications between April and June — the majority of which were from homeowners in arrears.
Nearly 33,000 households were at least two years behind on their mortgage repayments at the end of March.
The total number of people behind on their repayments was 76,420.
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Lorcan O’Connor, director of the ISI, said that legislative changes coupled with the launch of the government’s Abhaile scheme helped to boost the number of people applying to the service.
Under the Abhaile service, a borrower in serious mortgage arrears who is at risk of losing their home can access advice from legal professionals and a personal insolvency practitioner for free.
“The Abhaile scheme that the government has launched in the last few months allows for free consultations with an insolvency practitioner so that’s certainly important. There has also been changes in legislation,” Mr O’Connor told RTÉ’s News at One. “[The bank veto] changed and now a court can impose arrangements that banks have voted ‘no’ to against their will and there have been a number of cases before the High Court to date.”
A total of 9,361 debt-solution applications have been submitted to the ISI since its inception in 2013. During the first year 112 applications were made.
Just over 320 debt solutions were approved in the second quarter of the year — bringing the total number of solutions administered since the agency was set up to 3,500.
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A total of ten out of ten mortgage holders who have availed of the debt solution have kept their home, Mr O’Connor said.
He said that the challenge for the government was to advertise the range of supports available to homeowners rather than to introduce further legislative changes.
“I think in terms of the big policy calls everything has been done,” he said. “We have replicated all that works well in other common law jurisdictions and gone above and beyond in a number of respects.
“The challenge now isn’t to make big changes on the policy front but rather to encourage as many people in difficulty to avail of solutions now.
“Each quarter, ISI statistics show that our solutions are helping to get more and more people back on track financially.
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“While it is understandable that the effects of debt on mental health can prevent people seeking the help they need, my message to anyone still experiencing unmanageable debt is to consult with one of our regulated professional advisors.”