Credit and Debt Campaign
Dublin, 06/07/09: At launch of FLAC's report on debt enforcement, 'To No One's Credit' (L-R): FLAC Senior Policy Researcher Paul Joyce, Singer/Songwriter Mary Coughlan, and FLAC Director General Noeline Blackwell. Photo by Derek Speirs.Consumers in Ireland have become more and more dependent on credit to organise their finances in the past decade. Credit allows people to buy now and pay later and its availability increases spending power and therefore general economic activity and growth in jobs.
However, there is a down-side. Events outside people's control change their lives. Relationships break up, people fall ill, workplaces close down and not everyone plans their finances perfectly. With the huge increases in credit has come a corresponding rise in debt. What were manageable payments - at a stretch - become impossible and arrears build up quickly. This leaves people in debt open to being sued, even though there is clearly an inability to pay rather than a lack of willingness to do so in the majority of cases. Once in the court system, the procedures are old fashioned and adversarial, failing to focus on the plight of the debtor as s/he struggles to maintain control of the situation.
The development of the Money Advice and Budgeting Service (MABS) as a nationwide facility to help people in debt has helped greatly and FLAC has worked very closely with MABS from the start, providing legal back up, training and information. However, the legal system itself remains unchanged and the same basic procedures are being used that were in operation before the beginning of World War II.
So we have a 21st century consumer credit market with a 19th century debt enforcement system.
FLAC is engaged in an ongoing campaign to ensure that these laws are reformed, in order to provide consumers and their dependants with a dignified and effective way of dealing with debt that will be fair to the consumer, the creditor and the taxpayer alike. We are also campaigning to protect consumers from the worst excesses of the market by ensuring that the provision of credit is responsible, transparent and affordable. Comprehensive state-funded systems of money advice and civil legal aid are also needed to back up these protections.
Campaign Resources
You will find policy papers on debt in the publications section.There are also many related press releases around our credit and debt campaign.Finally, FLAC's in-house magazine, FLAC News, always features opinion pieces and articles on our debt campaign.
FLAC has issued two handy factsheets around debt/job loss issues, a Checklist for Actions on Losing Your Job and Guidelines on Mortgage Arrears, both updated as of March 2010. On 31 March FLAC wrote to the Ministers for Justice and Finance suggesting short-term measures to tackle personal debt.
In response to the growing number of queries and mounting concern from our clients around mortgage arrears, in October 2009 FLAC issued an open letter to legislators calling for urgent action on the issue. In September 2009 FLAC's Senior Policy Researcher Paul Joyce spoke at the Law Reform Commission's launch of its consultation paper on Personal Debt Management and Debt Enforcement. The paper contained and endorsed many FLAC recommendations from its reports on debt issues.
FLAC published its report on debt enforcement in the Irish legal system, To No One's Credit, on 6 July 2009, as well as an Executive Summary. It also issued a briefing document on legislation to change the Enforcement of Courts Orders Acts 1926-1940.
On 24 April 2009, FLAC appeared at a session of the Joint Oireachtas Committee on Social and Family Affairs, to speak about levels & trends in personal debt in Irish society.
In early 2009, FLAC obtained details of the government's draft Code of Conduct on Mortgage Arrears which would regulate how banks deal with people who are behind on their mortgage repayments. FLAC made some recommendations in January 2009 based on this draft document; however, when the final version of the code was published the following month, FLAC found it to be even weaker than the draft, and issued a policy briefing outlining the issues involved.
In May 2003, FLAC published a report on treatment of credit and debt in Irish law entitled An End Based on Means?. This report was well received by politicians, financial experts and money advisors. You can download a copy of the report or of the Executive Summary.
A follow-up conference in March 2004 brought together those who had responded to the report and presented them with various perspectives on the consumer debt situation in Ireland, as well as some international experiences. A summary of conference proceedings is available in print format only.
Take Action
Please contact us at campaigns@flac.ie if you feel you have been affected by the issues mentioned above.