Debt - Case Study 2015

By nclcadmin, Monday, 9th November 2015 | 0 comments
Filed under: Case Studies 2015, Debt.

Background

This case related to an application for repossession of a client’s home.

The client, who was a single parent, had obtained a substantial mortgage a number of years ago. Her circumstances changed, she was unable to continue working full time and she had fallen into arrears with her mortgage. The house was worth considerably less than the amount of the mortgage and so options such as a voluntary sale or surrender of the property were not viable for the client. The lender commenced the Mortgage Arrears Resolution Process and on foot of this process, the client entered into a repayment agreement with the lender. She was making the agreed repayments with financial support from her parents, and she understood that the lender would not pursue a legal action for repossession of her home as long as she continued to do so. However, some short time later, the lender then commenced proceedings for the repossession of her home.

CLM Limerick’s input

The client was referred to CLM Limerick and we reviewed her case. Having reviewed the documents, including all correspondence between the client and the lender, we formed the view that the lender had commenced the repossession proceedings in breach of the Code of Conduct “To meet someone like you in these times is a tonic” The following case studies are outcomes of representation or advocacy from 2015, which either clarified points of law or provided positive results for the clients. Case Studies Celebrating 40 Years Serving The Community 2 2 on Mortgage Arrears (2011) (“CCMA”). The CCMA included a 12 month moratorium on legal proceedings from the time the borrower entered into the MARP process, so long as the borrower remained compliant with the MARP repayment agreement. The CCMA also provided that a borrower would be notified in writing immediately before the lender applied to Court for the repossession of a borrower’s primary residence – the lender had not complied with this provision in this case.

CLM Limerick came on record for the client and briefed Counsel, who agreed to take the case on a pro bono basis. We filed an affidavit, which set out the client’s defence to the repossession proceedings, on the basis of the lender’s non-compliance with the CCMA. The case came before the Court on a number of occasions and submissions were heard in relation to the provisions of the CCMA.

Following consideration of the legal submissions, the Court indicated that they would reach a decision but recommended that the parties enter into negotiations. The culmination of these negotiations resulted in an agreement whereby the client would surrender the house back to the lender, and the lender would write off all debt and would not pursue the client for legal costs. CLM Limerick also assisted the client in her application to the local authority for social housing support; she was deemed eligible for housing assistance payment and soon after she secured private rented accommodation.

Impact

While in this case, the matter was settled before a decision was issued by the Court, the case raised consideration of the extent of a lender’s obligations to engage in the CCMA process before issuing proceedings for repossession of a family home. For the client, the outcome was very favourable, as she was able to secure an agreement where the lender wrote off the entire debt, and she was deemed eligible for social housing support in the form of the housing assistance payment.

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