Debt Management

Banks seek to work fairly and sympathetically with customers who encounter problems in meeting their debt repayments to come up with a workable solution for all parties.

For details on managing other debt problems, please visit the Managing Your Mortgage page here.

Working Together to Manage Debt

IBF and our members work closely with the State-funded Money Advice and Budgeting Service (MABS) in the development of appropriate debt management solutions.

The country’s leading credit institutions have subscribed to a Protocol to help personal customers to manage their debt. Developed jointly by the Irish Banking Federation (IBF) and the Money Advice and Budgeting Service (MABS), the IBF/MABS Operational Protocol: Working Together to Manage Debt enables IBF creditors and MABS money advisers to work together effectively to help personal customers/clients to address and manage debt problems andto formulate a mutually-acceptable, affordable and sustainable repayment plan. It sets out the agreed steps by which creditors and money advisers can work together to put such a plan in place and to successfully manage that plan on an ongoing basis.

The Protocol is broken down into two main parts as follows:

  • General Principles – which set out the partnership approach to be pursued by creditors and money advisers and the framework for addressing debt problems;
  • Procedures – which define the general arrangements for good engagement, the five key steps to agreeing a repayment plan and the process for managing an agreed repayment plan.

There is also a consumer guide to the IBF/MABS Operational Protocol: Working Together to Manage Debt.

Overhauling the Debt Enforcement System

IBF has consistently supported the case for reform of bankruptcy law and the debt enforcement regime in Ireland. IBF supports key recommendations in the Law Reform Commission’s “Consultation Paper on Personal Debt Management and Debt Enforcement” including:

  • The development of an effective alternative to imprisonment for those who are unable to pay fines and civil debt
  • The development of a non-court-based system for dealing with personal debt
  • The regulation of debt collection agencies and of commercial debt advice agencies

In supporting the LRC recommendations, IBF also emphasises the need for any solutions to reflect the importance of the following factors:

  • Full transparency as to the debtor’s financial standing
  • Good faith on the part of the borrower
  • The risk of moral hazard
  • The need for sustainable banking – funding and capital impacts

In supporting the case for reform, IBF will however be concerned to ensure that a number of important principles are taken into consideration so that the appropriate balance is struck between the interests of debtors and creditors. These include the following:

  • Distinction should be drawn between the borrower with sustainable debt over the long term and the borrower with unsustainable debt;
  • A prerequisite for treatment of unsustainable debt under personal insolvency should be clear evidence of good faith by the borrower in prior engagement with the creditor;
  • Within the parameters of the new regime each borrower’s situation should be assessed on a case-by-case basis.