Do You Need Professional Help With Your Debts?

19th February 2014

There are a growing number of professional debt advisers and intermediaries in Ireland. This is of little surprise given the scale of debt problems that now exist and also the recent creation of the personal insolvency practitioner role to set-up new types of debt solutions. Even before these “PIPs” were introduced a number of debt management firms were helping people to deal with their debts using informal solutions. If your debts have become a problem do you need such professional advice to get your finances back in order?

There are in fact many scenarios in which professional debt help might not be needed. A good example might be if you have a single unsecured debt, or a couple of debts with the same bank. It might be relatively straightforward to contact the bank and agree a reduced affordable payment with them. There is little to be lost by trying. Another common example would be in connection to mortgages. If you’re behind on your payments your bank should offer a resolution process (MARP) to you. Part of this resolution process might however include the bank paying for you to get advice from a recognised professional on the solution they could offer to you.

Where there are a greater number of debts and a greater number of banks involved it becomes more difficult to negotiate a workable resolution yourself. Each bank is competing against the others to secure a return on the money owed to them. Even if you can reach a deal with each of them there is no guarantee that the overall settlement reached will be affordable for you. The work involved also grows with each additional account that has to be tackled.

If you’re experiencing significant financial difficulty as a result of debts, and you have multiple creditors, the case for obtaining professional debt help grows much stronger. As well as their knowledge and training, such professionals will help to create a barrier between you and your creditors. This is especially important if your financial situation is leading to stress or other types of health issues. Another benefit is that their training equips them to present offers and solutions to creditors in a professional format that improves your chances of securing an effective outcome. 

It’s also the case that certain debt solutions cannot be set up by an individual acting alone. For example, if a debt settlement arrangement is the best debt solution for you it can only be put into place by working with a personal insolvency practitioner (PIP). These qualified and regulated professionals are also the only route to setting up a personal insolvency arrangement. Likewise, you’ll need to get in touch with an authorised intermediary if a debt relief notice appears to be the best way to bring your debts under control. 

The seriousness of bankruptcy also means that it’s unwise to voluntarily become bankrupt without taking advice from a professional first. Indeed, as part of the bankruptcy process you may well have to confirm that you have received advice about your options and considered alternative options.
So do you need to recruit a professional to help you resolve a debt problem? It depends on the complexity of your circumstances, how confident you are about negotiating with your creditors on your own, and whether your creditors support your efforts to negotiate a solution with them directly. Typically the more serious your debt problems, and the more banks that you owe money to, the greater the potential benefits of securing professional debt advice and assistance before making any final decisions.

Would you like further information and advice about how to deal with your debts? Please contact our advice team if you’d like the chance to discuss your circumstances and options.