You can contact our dedicated Mortgage Arrears Information Helpline on 0761 07 4050 (Monday to Friday, 9:30am to 5pm)
Overview: Problem debt
Any form of credit is a debt, so unless you pay cash for everything then you have debts. It is only when you are unable to keep up with the payments that it becomes a problem.
If you are in this situation, for whatever reason, you may find yourself having some of the following difficulties:
- Missed payments and letters from creditors
- Borrowing money to pay bills and catch up with arrears
- Paying whichever creditor is putting on most pressure
- Making promises to pay unreasonable amounts
- Broken promises and more pressure from creditors
- Legal action
If you are not coping, it is very important to get help. If you don't deal with your debts, you may end up having your home repossessed and/or going bankrupt. The free, independent and confidential Money Advice and Budgeting Service (MABS) can help you to deal with your situation - see ‘Help from MABS’ below.
What you can do yourself
If you are in mortgage arrears, or feel you are likely to be in mortgage arrears soon, the most important step you can take is to contact your lender immediately. The Mortgage Arrears Information Helpline provides information to borrowers in mortgage arrears or at pre-arrears stage - see ‘Where to apply’ below. You can find out more in our document on mortgage arrears.
For other debts, it is also very important to let your creditors know that you are having difficulties. Then you will be able to work with them to deal with the situation. Otherwise the problems and the pressure from creditors will just get worse.
You can use the MABS self-help guide to help you through the following steps:
1. Assess your situation. Make a list of all your debts. Check that each debt is in your name. Identify the debts needing immediate attention (for example, your mortgage arrears). Get in touch with the lenders immediately - preferably in writing. There is a sample letter (doc) on the MABS website.
2. Make out a budget. List how much money is coming into your household each week (or month) and how much is going out. You can get useful documents like a blank budget sheet and spending diary (pdf) from from the MABS website or request them through the MABS helpline - see ‘Where to apply’ below.
3. Deal with the debt. Write to the lender, making an offer of the amount you can afford to pay and explaining your financial situation. The MABS website has a sample letter of offer and blank financial statements.
4. Organise a method of paying the agreed amount. You can do this in various ways, such as direct debit, internet banking or a MABS Budget Account.
Help from MABS
The Money Advice and Budgeting Service (MABS), a free and confidential service for people with debt problems and money management problems, can help you to address your debt problems. A MABS money adviser will:
- Help you deal with your debts and make out a budget
- Examine your income to make sure you are not missing out on any of your entitlements
- Contact your creditors on your behalf with offers of payment if you are not able to do it yourself
- Help you decide on the best way to make the payments.
MABS operates a telephone helpline and a network of offices - see ‘Where to apply’ below.
Two voluntary protocols have been developed to help people to deal with their lenders.
MABS and the Irish Banking Federation (IBF) developed the IBF/MABS Operational Protocol: Working Together to Manage Debt to help people in debt to agree a sustainable repayment plan with their lender and avoid the need for any legal action. If a repayment plan is agreed, any existing legal action will be suspended as long as you follow the agreed repayment plan.
The credit institutions that have signed up to the protocol have committed to work with MABS money advisers to help customers to address and manage debt problems.(MABS can also help you to agree a sustainable repayment plan with other creditors.)
In 2013, the Irish Banking Federation (IBF) developed a new protocol, aimed at helping people in mortgage difficulties who also have unsecured debts, such as credit card debt.
Under this protocol, participating banks will prioritise your mortgage, but they may allow reduced repayments for a 5-year period so that you can pay a proportion of your unsecured debt by agreement with your creditors. It is intended that the remaining unsecured debt will be written off after 5 years if you keep to the agreed arrangements.
There are different forms of debt, including mortgages, loans, overdrafts, credit cards and hire purchase agreements. Some debts, for example, mortgages, are 'secured' - this means that goods or property, usually your house, is used as security in case the debt is not paid. Find out more about types of debt and debt terminology in our glossary of debt terms.
Some debts have specific rules and practices in place in relation to how they are managed and collected. These are mainly debts which are owed to the State or a State body. In particular, taxes, social welfare overpayments, local authority rents and housing loans, waste charges, utilities bills and TV licences all have specific rules and procedures. Find out more about the rules for specific debts.
There are general rules under consumer credit legislation in relation to collecting debts, including rules in relation to privacy, contact points and harassment and intimidation. There are particular rules for how lenders must engage with people in mortgage arrears or pre-arrears.
If you do not engage with your lender, your lender will most likely initiate legal proceedings to recover the debt. The case can be taken in the District Court, Circuit Court or High Court, depending on the amount of money involved. Once your lender has a Court judgement setting out the debt, this judgement can be enforced in various ways, including, in extreme cases, through bankruptcy proceedings. Being in arrears on debt repayments can also have other consequences, for example, it can affect your credit rating and make it difficult to get credit in the future.
When someone has died, there are detailed rules about how their debts must be dealt with.
You can contact your local MABS office for advice and assistance.
You can also ring the MABS Helpline: 0761 07 2000 (9am - 8pm, Monday - Friday) or email: firstname.lastname@example.org
The Mortgage Arrears Information Helpline 0761 07 4050 is available Monday to Friday 9.30am – 5pm.
You can read more about current and proposed developments on personal debt and mortgage arrears in our document on responses to mortgage arrears and personal debt.