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Bankruptcy – Not The Only Option

This article appeared in the Fermanagh Herald on 22nd July 2015.

Debt continues to affect home and business owners across Northern Ireland, particularly in Fermanagh. The Erne County has always sat on the periphery and it is clear that debt is impacting the people of this region more than most.

“The simple fact is borrowers do not appear to have the same access to information as those closer to Belfast. There are 60,000 people who live in Fermanagh and it is very important they have access to all of the information.”

These are the stark words of warning from Fermanagh businessman Darwin Allen who is a Debt Specialist at GDP Partnership Negative Equity team. Darwin states “after eight years of this debt crisis, there is still a real lack of understanding around money, finance and debt and how you go about dealing with it.”

“People need to understand there are more options to deal with your debt challenge. Unfortunately it appears that government funded debt advice agencies and insolvency practitioners only promote two options. An Individual Voluntary Arrangement, commonly known as an IVA, or Bankruptcy.”

“Time and time again, borrowers are not being presented with all of the options available, only those that are the business models of a particular agency or firm, which I find particularly frustrating.”

Darwin explained to the Herald that a lot of what he does in this area is educating people around all of the options available to them on an impartial and independent basis. “One solution, which some people do not know exists, is Mediation.  Mediation has been well known for centuries as a mechanism to resolve disputes and from my point of view in many cases it can be the preferred option and outcome.”

“This involves making a private agreement and settling your debts with a creditor outside of the formal insolvency processes. It is based on your debt affordability and subject to personal circumstances.”

The main thing people need to understand is that they are not alone and there is help available. Darwin suggests from his experience that under anxiety and stress, borrowers resort to tradition, such as Bankruptcy. “But I have always liked to challenge convention and work in the business of doing things that people say cannot be done – it is also important to remember that our banks did not go bankrupt.”

"Over the last four years GDP have spoken to thousands of people in debt, assisting over 300 borrowers. We have mediated c.£120m of debt to be written off and in the last 7 months we have had over £12m written off for our clients. We are currently assisting 130 clients with about £220m of distressed debt, £5m of which resides in Fermanagh." Whilst impressive, Darwin confirms “it’s not about counting the write offs, it’s about making the write offs count and changing people’s lives.”

“It is clear what makes our team different is we are passionate about helping people by providing a vital front line service. The practice works for the borrower and not the bank so there is no conflict of interest when it comes to getting the best result.”

The Fermanagh man believes more education is needed for those struggling with finances and emphasises that where there is a problem there is always a solution. He says “many borrowers are forced down the bankruptcy route because they think, or are being told, it is the only option. This is simply not the case.”

“I feel it is incumbent upon any organisation acting in this space that they present to people all of the potential solutions and not just those solutions that suit their organisation.”