The Government has launched a new nationwide service to assist individuals at risk of losing their homes. The service, known as Abhaile, is one of the initiatives proposed for tackling the mortgage arrears crisis that formed part of the Programme for Partnership Government published in May 2016.
Abhaile will offer free, independent financial and legal advice to those who are eligible for the scheme. To qualify individuals must be:
- insolvent (as defined in the Personal Insolvency Act 2012);
- in mortgage arrears in respect of their principal private residence; and
- at risk of losing their home (for example, if possession proceedings have issued against them or if they have received correspondence indicating that such proceedings will issue).
Individuals will not qualify for the scheme if their principal private residence is disproportionate to the reasonable living accommodation needs of that individual/their dependents, taking account of the criteria set out in Section 104 of the Personal Insolvency Act 2012.
A number of Government Departments and bodies are delivering the scheme under the coordination of both the Department of Justice and Equality and the Department of Social Protection. An information campaign promoting the scheme will be run by the Citizens Information Board over the coming weeks. The scheme has already been operational on a pilot basis since July by MABS. The role of MABS is to carry out out an initial triage before directing individuals to the most relevant advice given their particular circumstances. The expert help is provided free to individuals under a voucher for the provision of the relevant service. MABS may refer the individual to the ISI, the Legal Aid Board or to an accountant who is a member of the scheme panel.
Advice under the Abhaile scheme can cover all options including restructures, personal insolvency, bankruptcy and a sale/surrender of the secured property. The ultimate decision remains with the individual but the scheme aims to ensure that such decisions can be made with the benefit of independent expert advice.
The scheme is expected to operate for a maximum period of 3 years. It will be reviewed after 6 months and yearly thereafter in the light of take-up and outcomes. It will be interesting to see what rate of take-up for the new scheme, given the poor take-up of similar schemes in the past and the range of advisory services already available. Given the total spend on the scheme (estimated to be €15 million), it will also be interesting to see if it leads to more positive outcomes for individuals at risk of losing their home.