Presentation to Joint Committee on Finance_ Public Expenditure and

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Presentation to Joint Committee on Finance_ Public Expenditure and Powered By Docstoc
					National Executive Committee of all MABS staff
                                          19th October 2011
MABS : Who or what is it ?
 52 Companies

 130 Money Advisers

 MABS NDL – development & support

 Voluntary Management Committees

 CIB – support and funding conduit from Dept of Social

 Minister of Social Protection
MABS : Who are the clients ?
 Just like you and me ….
 Who lost their job ….
 Whose business failed ….
 Who experienced illness ….
 Or relationship break up ….
 Who got caught in circumstances beyond their control ….
 Who were on low income ….
 Or a social welfare payment ….
 Who are working class, middle class, formerly well to do ….
MABS Activity 2010
 Active Ongoing Indebted Clients   24,755

 New clients to service            21,653

 Helpline Calls                    30,000

 Website hits                      250,000
MABS : How are the clients?
 Stressed
 Emotional
 Desperate
 Sometimes …. Hopeless & Suicidal

 How many of us are only a payday or two away from finding it
  difficult to meet our commitments ……

 The staff are informed by their interaction with our clients over a
  period of 19 years and bring a flavour of this experience by the
  following sample case studies
MABS : Client Cases
Client A – Male, Daughter at College living at home, Child from a second relationship, Public sector
employment, Sub-prime Mortgage
• Monthly Income                                                                  2542.41
• Mortgage / Insurance (arrears 12878.87)                                         903.77
• Utilities                                                                       247.25
• Food / Housekeeping                                                             524.41
• Child Maintenance                                                               173.00
• Phone/Transport/Education/Clothing/Househ Maint                                 375.65
• Medical Costs                                                                   120.00
• Hair/Pocket Money/Family Outings/Cigs & Alc                                     274.95
DEFICIT                                                                           -76.62
Secondary Debts                                                                   25839.52
Outstanding Mortgage Balance
(26 years left to pay taking client to his 80th Birthday)                         157,000

Repossession order being sought
MABS : Client Cases
Client B – Female, recently separated, 4 children, no mortgage owns the family home
   jointly with husband. Dissolved business. Client had signed some personal
   guarantees for the business as had her husband
 Social Welfare income       weekly                                 264.70
 Total income including maintenance/child bene etc.                 458.70
 Total household expenditure                                        521.35
   DEFICIT                                                           -62.65
 The guarantee holders are seeking judgement
 Guaranteed debt                                                    158,000
 Guarantee holder 1 is being paid E40 per month
 Guarantee holder 2 is not being paid

This family may lose their home but not because they are not paying their mortgage.
MABS : Client Cases
CLIENT C – Married couple, former construction worker, Employer
  forced purchase of a lorry
 Monthly welfare                                       1460.28
 Total expenditure                                     1439.00
 Outstanding Mortgage                                  100k
 Home value                                            350k ?
 Secondary debt including lorry (36,300)               83,200
 The payment time to deal with debts                   325.5 years
 To pay back at interest rate above .02%               Never
When this case went to Court the court struck a E15 repayment
MABS: Client Cases
Client D – Married couple, 4 children, rural Ireland, new
  build house
 House Value       1 m ….. 350k ?????
 Outstanding mortgage (arrears 12k)              625k
 Secondary Creditors – 14                        372.5k
 Monthly mortgage repayment                      3500 pm
 Income (mixture salary/ social welfare)2706.60
 Expenditure                                     2523.00
 Disposable income                               183.60
  This client expressed suicidal ideation.
MABS : What does it have to offer?
  Experienced, committed, trained staff, many with professional
     qualifications, all with well developed inter-personal skills
    National Presence in communities near users
    Infrastructure – offices, payment systems, protocols, standard
     procedures, controls
    Reputation & relationships of trust with client, creditor, statutory &
     voluntary organisations
    Tried & Tested Holistic approach leading to sustainable repayment –
     social dividend
    A database which if adapted and anonomised could provide debt data
     from a representative sample of debtors in relation to employment
     status, welfare payments etc. and inform policy.
    Experience of Settlement
    European recognition as an example of best practice
What is Needed to Deal the Debt
Problem ?
 All debts, mortgage & consumer credit, must be dealt with
    together to achieve a workable solution.
   Establish debt management agents to help people work
    towards sustainable repayments for the debtor and a realistic
    repayment stream into the financial system
   Acknowledge that some mortgages are unsustainable and
    some consumer credit debt will not be repaid
   Acknowledge that some people will need to be helped with re-
   Put in place insolvency and settlement systems which all
    people to move forward to become socially & economically
    productive “after debt”.
   Maintain appropriate access to credit for participants
Learn from International
 The UK system of debt management, extensively referenced
  when the Law Reform Commission reported, is now being
 The UK has installed a Government funded Money Advice
  Service as Debt Services reviewed by the OFT were found to have
  many compliance and quality issues despite licensing and
 The main failings of licensed private operators were in relation to
  transparency and competence levels of front line staff.
 Sustainable holistic approaches result from a Money Adviser
  being able to empathise with the client situation. The failure of
  many UK voluntary debt arrangements has been attributed to
  the lack of face to face interactions with debtors.
MABS : Full Circle
 MABS was set up as a response to Moneylending almost
  20 years ago, people are being driven back to
  Moneylenders right now
 We are in danger of sending those is debt round in ever
  decreasing circles through the lack of pragmatic response
  to the debt crisis
 Doing too little now may lead to huge social and financial
  costs later …….
Thank you for your attention

Questions ?

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