For the past number of months we have been bombarded with commentary each day on the new provisions under the Personal Insolvency Act 2012 – When will it come into force?, How will it operate?, What will it cost?, Will it apply to everyone?, Is it a real solution or a temporary remedy?
While this commentary is both welcome and necessary what I am most shocked about in dealing with clients on a daily basis is the absence of a voice to speak out on the other aspects of insolvency which, in some cases, are more of a concern than the debts themselves.
These are the impacts that debt can have on people’s everyday lives, their relationships with others and, in particular, their mental health.
On a daily basis I have people sitting down with me to explain how trying to cope with being insolvent is destroying every aspect of their existence. It is all too common to hear of how one spouse may be trying to keep the secret of having taken out loans without their husband or wife knowing, how people cannot sleep at night worrying about whether the home in which their children were reared will be taken, how the ring of their telephone or the sound of the postman arriving causes a lump in their throat as they do not know what demand for payments or threat of court proceedings will await them.
There is no escape from these pressures. They are real, they are constant and they are happening in almost every one of the 100,000 homes which are currently in what the banks term “serious arrears” (arrears of three months or more).
I have had many clients whose once happy marriages have broken down under the strain of trying to cope with debt. They are then facing the additional concerns that come with separating from their partners. I have encountered people who have worked hard all of their lives and who would never have missed a payment and are finding themselves having to face losing everything that they worked for due to redundancies and failing businesses. People, in some cases, are embarrassed to tell others about the extent of financial trouble they are in and at their wits end in trying to keep the wall of arrears from coming crashing down.
I fear for many of my clients who find themselves in a position where their debt has isolated them from all of those who are close to them. It is also concerning that some children barely see their parents because they are working every hour they can, whether at home or abroad, to try and generate an income to support them.
The situation is not acceptable and needs to be addressed in a real and meaningful way. Supports need to be put in place and attitudes and the stigma around financial difficulty need to change. I am a firm believer that, as a PIP, my job is, not to judge but, to assist those who are in difficulty with coming to a workable solution.
In doing so, however, I am conscious of the fact that in advising those in difficulty it is often the case that the level of stress and distress is so acute the debtor themselves may not be able to deal with making crucial decisions. This is why early intervention supports are preferable in my view.
The last thing that this country will benefit from are rising divorce and illness rates, both physical and mental, which will do little but put a further strain on the economy and contribute to broader societal difficulties. Putting the structures in place to assist those in rising out of their financial misfortune, practically and emotionally, will lead to savings and development on all fronts in the long term.
People’s relationships, health and lives are paying the price where their income cannot. Something must be done.