An article in the paper last week by several well-respected and well-informed economists said that the boom has left tens of thousands with debts they will never be in a position to repay. These debts, they say, are poisoning the balance sheets of Ireland’s banks, preventing the emergence of an economic recovery, as well as causing untold social misery. They suggested some degree of individual debt forgiveness and restructuring plan.
Recent figures show:
- 200,000 households are in negative equity
- 36,000 mortgages were in arrears of three months or more, with collective arrears of just over half a billion euro
- and more than 100,000 also find themselves in difficulty paying the interest costs on their personal home loans
In reply to the article many think that even a partial debt forgiveness plan would incentivise homeowners in negative equity / debt to stop making mortgage payments. Such a plan would amount to “free money”. Earlier in the year Financial regulator Matthew Elderfield also expressed concern over support or alternatively payment options… “In seeking to assist households in difficulty, we need to recognise that the cost of any support will be borne by those neighbours who avoided excessive borrowing themselves or are gritting their teeth and meeting their obligations” he said.
Have Your Say:
- Should support be provided for those with mortgage debt
