Sunday Business Post | Irish Business News

Breaking News Business Ireland World Sport Weather

Navigation (Home)News News Features The Market Media & Marketing Comment & Analysis Computers In Business Profile Property Motoring Agenda Letters

People In Business Budget Forum Events / Conferences Company Reports Tools Crossword Search the archives Newsletter IMODE RSS

Text-Only

Money and budgeting service calls for new debt dispute process
Sunday, November 02, 2008 By Emma Kennedy
A new process for dealing with disputes over debts needs to be created outside the court system as the recession hits people’s pockets, according to the Money Advice and Budgeting Service (Mabs).

In a submission to the Law Reform Commission, Mabs said that an out-of-court alternative to the existing dispute resolution process was needed to address the ‘‘overindebted person’s situation in a holistic fashion’’. The independent organisation, which provides help for people with debt problems, made the submission as part of the Law Reform Commission’s review of alternative dispute resolution.

It said that the legal process should ‘‘support, facilitate and strengthen voluntary negotiated debt settlements’’. A pilot scheme for debt settlement - a joint initiative between Mabs, the Free Legal Advice Centre and the Irish Banking Federation - was launched in 2002. It was designed to help debtors, against whom legal action by creditors was likely or pending, to formulate an affordable repayment plan. According to Mabs, difficulty repaying personal loans was the main type of debt facing Irish people in the first nine months of this year.

Inability to pay utility bills and repay credit card debt was the next most prevalent problem, followed by issues with money lenders and mortgage repayments. Other debts causing problems for people included overdrafts, hire purchase agreements and unpaid rent.

Since the beginning of the year, Mabs has dealt with more than 14,000 new clients at its 60 centres nationwide. The number of clients has increased by over 30 per cent on last year, according to spokesman Michael Culloty.

As well as this, the organisation’s telephone helpline service, launched in September 2007, received 10,000 calls in its first year in operation. Culloty said the most important thing to do if financial difficulties were encountered was to react early.

‘‘When it comes to loans, react before you get into arrears. Talk to your credit suppliers and advise them of the situation that has occurred or is likely to occur,” Culloty said. ‘‘Borrowing your way out of difficulty is not a solution. You just dig a whole lot deeper.”

Click here for Sunday Business Post stories before this date