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THE LAST TIME I wrote for TheJournal.ie, I addressed my concerns that the crisis in banking was continuing to cause us all stress and concern.
My new appointment, as a principal of GDP Partnership, a debt solution agency with new offices in Dublin, puts me in the position of addressing those concerns. In many ways it was a natural progression from observing and writing about the problems to actually trying to do something about them.
Financial difficulties are most often the hardest to deal with, they embarrass, overwhelm and push people into corners quite unlike any other form of problem that we face in our lifetime. I’ve witnessed this on many occasions – as well as experiencing my own difficulties many many years ago. They will never go away. They have to be dealt with.
The normal course of events sees people struggling to cope and, more often than not, failing quite miserably. It’s a problem that has existed equally as long as the world of Finance: wherever there is lending, there is difficulty in repaying and ultimately an amount of default. So what we are currently experiencing is nothing new, what is new is the widespread nature of the debt problem and, like you and I, the banks themselves have never experienced such an enormity of a problem.
There are solutions
However, there are solutions. The problem is that not everyone understands the problems and rather more worryingly, some of the misinformation and the sensational way that the small amount of information is reported causes further distress, rather than reducing the enormous pressure that everyone is already under. That is where a mediation service like the one I am working with can help, by engaging and communicating with the lender on your behalf and presenting solutions that will allow both parties to move forward.
It never ceases to amaze me listening to a number of economists and financial journalists who fail to understand the depth and scale of this issue. I am in no doubt that the island of Ireland, north and south, will not move forward economically until we deal with the debt problems facing the country. We have way too much debt in our society right now, from sovereign debt, to SME debt, to personal debt.
The favoured sovereign solution seems to be to kick the debt down the road over a longer period of time. Some might agree this is the best solution however it wouldn’t be my preference. From an SME point of view, I would suggest if you offered any CEO in the country an extended 20 years or so on their debt they would bite your arm off – I doubt there is any bank in Ireland in this space so that’s not an option.
There is a lot of bad advice out there
From a personal debt perspective, there is new legislation out this year in the Republic, and it is hoped that the new rules will be the answer to the debt problems out there. I suspect it won’t be that straightforward in practice as there is a lot of bad advice out there. Many people are fast-forwarding in the direction of the insolvency and bankruptcy option, I still maintain that this should and can be avoided in most circumstances.
The Central Bank came out this week in Ireland to say that SMEs had some €50bn of debt and more than half of this was impaired. The huge concern from the Central Bank’s perspective is that the majority of this debt is property-related. This is a major cause for concern for everyone. The lack of progress Irish banks are making in terms of dealing with these problems is now under scrutiny from the IMF and the Central Bank. Our view at GDP is that both borrower and bank need to fully engage and mediate a solution to each of the loan books under pressure. I feel that we can no longer sit back and expect the whole thing to blow over – it’s just not an option. There will be pain on both sides, and facts remain that until we sort these issues the economy is in a spiral.
Banks have their own policies in dealing with these matters and interestingly these vary greatly depending on the institution. Our practice has been making huge in roads on behalf of borrowers with our very unique approach to dealing with the debt problem in recent times and we would hope that as time moves on, the banks become more co-operative and transparent so that we can all arrive at the solutions much quicker.
The short to medium term for Ireland looks extremely challenging. However, I would prefer to approach this as an opportunity to solve the many issues that are currently out there.
For more information or to receive a monthly e-zine, please contact info@gdpni.ie
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Next week on the journal. ” how to balance your books” by Sean Fitzpatrick
Is this an opinion piece or an advert
Quite a lot of what Nick lesson says makes good and practical sense.
As a life lesson, I might add a little homespun wisdom. Never go into a game which is fixed against you. Never fight an enemy where it has the tactical and ground advantage.
Also, please remember if you are in mortgage debt, you were scammed. It was con debt which hugely inflated property values resulting in people paying a multiple of 4 to 5 times the sensible value of a home. It is the Banks who are in the wrong. The Banks are the miscreants.
Mortgage debt should not be allowed to become morgue debt.
While I agree with your sentiment, the lenders didnt force people to take out the mortgage, and what about the old warning your home is at risk if you don’t (or cant) pay the loan back. I know all about mad house prices but people were queuing over might to sign up for rabbit hutches.
..and what about people who made money when their houses went up in value?
Peter. Everything u say is spot on. Good advice too. I worked as a PA in a construction company from 2000 til the crash. I saw it all first hand. I am still shocked at how we all got sucked in to getting the big mortgages. No one ever shouted STOP. Its so easy be wise in hindsight.
Taxi. People were queuing outside the office where i worked for a WEEK to put deposits on houses. I genuinely have huge sympathy for those in mortgage trouble. They were all working damn hard and they all had good intentions. But things just didnt work out…
…and the banks were not forced to lend either. Amazing the banks got their lending decisions so wrong with 100,000 mortgage out of 770,000 in arrears within 5 years, or 12.9%. Seems a lot like reckless lending to me.
No the lenders didn’t. But the only advice in town was to borrow, borrow, borrow as property (and jobs) faced upwards only. You couldn’t lose.
Spot Brillo Pad.
Nick,
our government,
our senior civil servants,
our judges,
our justice system
and our bought out media seem to have ignored the fact that their friends in the banks, broke the law on numerous occasions,
including serious liquidity laws ( that carry a prison sentence ).
As a consequence of the heinous criminal acts of these criminal bankers and their Cabal of accomplices listed above.
Hundreds of thousands (if not millions) of innocent Irish people have been psychologically tortured.
Hundreds of thousands of innocent Irish people have been (basically) exported.
Millions of innocent Irish people’s lives have been negatively effected.
Thousands of Innocent Irish people have been tormented to the point of suicide.
And all that some heatless Spruikers keep saying is that the banks didn’t hold a gun to anyones head.
All that the majority of these innocent Irish people wanted was a basic financial product to put a basic roof over their family’s head.
They were sold products laced with poison.
Products poisoned by the criminals that sold them.
Let us not forget that our bought out media helped these criminals to pedal their wears.
(and got handsomely rewarded for it)
Without getting political, but here is a figure of 180,000 in mortgage distress from Pierce Doherty.
http://www.irishtimes.com/news/politics/government-exaggerating-number-of-strategic-mortgage-defaulters-sinn-f%C3%A9in-1.1355929
Maybe it’s time you started outing some of the criminals in the banks Nick.
Instead of preying on their victims.
The only people getting justice against the banks in Ireland these days
are going into the high court “flying solo”
serving their banks with plenary summonses and defending themselves.
Most “fine” “upstanding” “oath taking” solicitors in Ireland play both sides Nick.
So will the PIPs.
Just wait and see.
If we forced multinationals to actually pay 12% tax it would solve the national deficit n we could start repaying the debt that isn’t ours, that FF took on illegally n FG/LAB legalised.
Mortgage write downs to 110% of current value would be a start. NAMA giving millions in write downs to companies without a bother. I’d rather see homeowners bailed out.
Taxi bill you are spot on. It may not be pc to say but alot of people did not do basic maths when they were taking loans.
Forget whether the banks made you take the loan – they didn’t.
Stupidity took hold – a 35 year mortgage for somebody in their 30s. How insane.
It frankly pisses me off that people expect they can walk away from debts. What about those of us who were prudent, didn’t go mad and pay our debts.
Bruce, it is amazing that banks with decades, if not centuries of lending experience, were lending to 30 year olds for 35 years. Can you not see that it was reckless lending to people with little or no experience. Why did banks loan this money if it was ridiculous to do so?
Correct Again Brillo.
Bankers were jailed for less in Iceland.
The whole Irish banking system is rotten to the core with criminality.
It is only the Spruikers who want to blame suffering Joe Public and his credit card for breaking the entire country.
I don’t buy it that people were so dumb to not realise the craziness of it all.
” Many people are fast-forwarding in the direction of the insolvency and bankruptcy option, I still maintain that this should and can be avoided in most circumstances.”
You didn’t manage to avoid it with Galway United, instead you bailed out before the inevitable collapse. You clearly know how to avoid bills, but I’m not sure I’d trust your advice!
More product placement than a will.i.am music video!
Nice little Infomercial Nick.
The next time, try the shopping channel.
How much do you charge Nick?
Do you publish your success figures?
Are you a silent partner in this company?
I know that in the past you’ve single handedly bust a bank, a currency and nearly an entire country Nick, but what experience do you have in the debt resolution field?
Sorry for all the questions Nick
But as you said yourself, there’s a lot of bad advice out there?
What happened Galway united, Nick?
Nick
I think you have just met your Waterloo!
Best piece of advice came from master yesterday on the marian finucane programme
Go into the bank with bankruptcy papers that will get them moving
Forget about the PIPS, it cost €60
Or go to the UK or northern Ireland for a year
Bank of Ireland are still sponsoring Rugby, Sailing, Golf, Show Jumping, Tennis etc while the people of Ireland bail them out!, it’s immoral,
Auditor one fundamental concept of business is advertising and self promotion that’s why you’ll see their sponsorships
No doubt you will of course be working Pro Bono Publico to help these financially challenged clients
Eh quick question Nick… As a former trader that brought down a bank all by yourself I think its a bit much for you to tell people that debt problems don’t just go away!!! We are not oblivious to this fact and each family/person affected is trying to deal with it in their own way. Tell me … How much of your wages from your new position are you paying back for the hundreds of millions you were responsible for losing?? Strikes me that your just like the morons in govt that are well able to preach to others about debts and repayments all from the position of sitting on a cushy number job!!
Only advice this man can realistically give is how to bring down a bank and a football club.
Wouldn’t listen to advice on how to avoid debt when he clearly hasn’t a track record of proving it.
If u give a rich person a euro they say he won’t spend it but if u give a poor person a euro they say he’ll spend it
Stop taking
Some people keep the economy moving by earning and spending, others horde their wealth and that makes them feel good about life or whatever.
Anyway a small amount of people have the majority of the wealth and that never changes.
Yep, thats true…. In my experience rich people keep all their euros and get rich as a result of letting the poor people fork out and pay for stuff!!! Maybe if there was greater distribution of wealth in this country and the govt, banks etc got off the backs of the ‘poor’, everyone would have a few euros in their pockets!!!
Why is any attention paid to this con man.
Nick, if you can overcome your financial crisis (the crash bang wallop thingy), then there be hope for those in crisis of a lesser mint, in bricks and mortar.
Never trade your mint for bonds.
It’s frightening when you see how much SMEs are indebted to the banks. You don’t see it mentioned much in the media, even though it’s an insidious problem that’s going to have dire consequences for the economy. After all, SMEs are the main employers in the country, but you wouldn’t think so when you read the media. You’d think it was all the multi-nationals who are providing employment.
Your debt follows you any where in the EU. So no point heading to the UK thinking your home free :( . I love it if that was the case but I still get calls and letters from Irish banks.
have your say