Ten declared bankrupt so far this year in counties Cavan and Monaghan

There have been ten bankruptcies in counties Cavan and Monaghan so far this year compared to 40 in all of Dublin with a population of 1.4m, according to the Personal Insolvency Practitioner (PIP) for Cavan, Mark Reilly, a partner in KBG Chartered Accountants. There have been none in Longford or Roscommon or Leitrim. Nationally, there were 164 bankruptcies so far this year with predictions that there should be around 400 in total by end of the year. 

Mr Reilly is the only authorised PIP for County Cavan. Under the Personal Insolvency Act 2012, a number of PIPs were approved by the Insolvency Service of Ireland (ISI). Any individual who intends to apply for a Debt Settlement Arrangement or a Personal Insolvency Arrangement must apply through one of these authorised PIPs.
The latest figures show, according to Mr Reilly, that, per head of population, Cavan and Monaghan is a lot higher than the norm for bankruptcies compared to Dublin and also the national average. This, he says, points to “a bigger problem” in this region with debt.
There were four bankruptcies in County Cavan to the end of June and six in County Monaghan.

Parents struggling to feed children
Mr Reilly describes it as “a mountain of debt” and believes that we are only seen the tip of the iceberg in relation to bankruptcies in this area.
Based on what he’s hearing, Mr Reilly says that some parents don’t have enough food to feed their families over the course of a week so they send the children to relatives where they can receive square meals.
People right across the county have also got into the clutches of money lenders, some regulated and some unregulated, and are too embarrassed to speak about their plight.
Mr Reilly finds that some people are still burying their heads in the sand and not facing up to the reality of their situation.
Bankruptcy is now an attractive option, he says, and it now only last for three years and, he believes, that there is no stigma attached anymore.
People coming in through his doors include accountants, the unemployed, architects, teachers, guards, self-employed and company directors, farmers and generally people linked to the trades and lots of civil servants.

Using credit cards to pay mortgages
Mr Reilly told The Anglo-Celt that he has people from County Cavan coming into him saying they can’t sleep at night because of their debt situation. “We are noticing that a lot of people’s health is deteriorating because of debt problems,” he said. He finds that some people have used four credit cards to maximum to pay off other debts including the mortgage.

Debt relief
Mr Reilly is one of 138 PIPs in the country. He pointed out that he is an independent person trying to help the people coming through his doors and he outlines for them the various options available, which includes a Debt Relief Notice for €20,000 or under, a Debt Settlement Arrangement which is for unsecured debt only and then a PIA (Personal Insolvency Arrangement), which is for secured and unsecured debt. Then there is the option of bankruptcy, which includes all debts and debt negotiation.
Mr Reilly says he finds the credit card companies much easier to deal with than the banks right now.
He points out that while certain debts will be secured against things like properties, there are unsecured debts like money owing on credit cards and to credit unions.
“Basically, a Personal Insolvency Arrangement (PIA) is about finding a way to use what is left after you purchase your groceries, light and heat, childcare and the car expenses to pay off your debt,” he explained.
As an example, if a family has an income of €3,000 per month and €2,000 goes towards paying day-to-day expenses. With the remaining €1,000 - €500 goes to the mortgage with €500 remaining.
Mr Reilly explains that if this €500 is not enough to cover the remainder of their debts, then that money is divided up among the remainder of their creditors in order to clear those debts. That continues for six years through the formal arrangement and then, at the end, if there is a balance, it is written off.

Solutions
Mr Reilly says that there is usually a solution and some part of the debt can be parked. For example, if you owe €200,000 on your mortgage, €100,000 may well be parked and left to one side with no interest attaching. That is a split mortgage solution and it could involve a write off as well.
Mr Reilly further explained that if you go bankrupt, any judgements against you will be wiped. Once you go bankrupt, you own and owe nothing and bankruptcy now lasts for three years. The bankruptcies appear on the ISI website (http://www.isi.gov.ie/).

People proud
Mr Reilly believes that some people in rural Ireland are still proud and they hate to think that their neighbour would know that they are in financial difficulty. “The neighbour could be in worse difficulty. I say to them, you are in a bit of a financial difficulty and I will endeavour to sort it out for you. Don’t in any way be upset – I would say that there are probably four or five people within half a mile radius of your home in financial difficulties as well and you will never know about them and they will never know about you,” he said.

Contact
Mark Reilly, KBG Chartered Accountants, Railway Road, Cavan, can be contacted at markreilly@kbg.ie or 049-4361444.
In Monaghan, Laurence Clerkin, Clerkin & Co, Dublin Road, Castleshane, Monaghan, is the approved PIP. He can be contacted on laurence.c@clerkinfinancial.com or 047-85700.