CONSULTAS OFFER EXPERT ADVICE TO THOSE OF US WHO HAVE OVER BORROWED

first_img‘CONSULTAS’ are a Donegal based company who specialise in financial services. In this week’s feature Niall Kavanagh and Tom McDonagh have given another fascinating insight into the word of economics, this time focusing on the implications on over borrowing and investing in property during the boom years.Below, Niall and Tom disregard the confusing terminology used in the world of finance into lay-man’s terms in order for us to all understand the current economic and banking situation in Ireland. All the talk over the last 7 to 8 years has been focused on private dwelling mortgages with little or no mention of any investments in property or businesses, which has been funded by way of bank borrowings.In times of financial crisis it is important to concentrate on the most important assets and prioritise your family home, which is a necessity rather than a luxury.That said, very little has been achieved over the last 5 years to sort out family home debt with over a 100,000 mortgages still in arrears or availing of temporary measures, on the expectation that individual’s financial position would improve.Now we hear that the Irish mortgage holders pays an average of 2% over their European counterparts which equates to €4,000 a year on a mortgage of €200,000, because of this it is difficult to believe that realistic attempts have been done by Government and Banks to deal with this increasingly alarming situation. It is very disappointing to hear that the natives of a country that implemented a number of necessary austerity measures continue to pay more than our fellow citizens in Europe.Despite all this it remains vitally important that borrowers engage and cooperate to secure a sustainable and affordable solution to mortgage arrears.The next big issue on the horizon is buy to let and SME business debt, a number of comments have emanated from a number of acknowledged economists in relation the levels of arrears in both of these sectors.For some reason little or no comment has emerged from political or banking sources.Many individuals invested in buy to let properties across Ireland considering property as good as a pension and source of additional income in retirement. Unfortunately many of the purchases were overpriced and in some cases funded by 100% mortgages or equity releases on private dwelling loans. High numbers of these investments have failed as a result of decreasing rental yields, changes to government taxation and pressure from banks to repay the debt. As a result, significant numbers of buy to let mortgages are in arrears or have been extended on interest only arrangements, which serve no purpose in many instances other than to postpone the inevitable. Interest only repayment structures is a short-term measure to defer a sale or the appointment of a receiver to a property pending the uplift in the value of the asset, in most cases this arrangement serves the Bank more than the borrower. SME debt has snowballed over the last 10 years with many business people investing heavily in their enterprises to expand and modernize their operations.Sectors like the car trade and supermarkets have seen significant investment in property assets funded by Bank borrowings, in many cases the development costs were significant but were justified by a strong belief that the additional trade would cancel out the large outlay. Again this belief was misplaced and trade, which may have performed well due to the novelty aspect eventually, petered out to previous levels resulting in many businesses operating at historical levels with double the debt.Finally the biggest catastrophe for a number of unfortunate business people was the investment in property using the strength or equity of a successful profitable business to secure the funding. In some cases these failed investments or being supported by good business, which is now hemorrhaging due to this non-business related debt overhang. The correct course of action is to separate the investment from the core profitable business to allow the enterprise survive and support jobs and the economy, unfortunately some financial creditors look for a return of capital from all sources available regardless of the impact on the business.Consultas Financial Services is a Business Consultancy and Financial Services Company owned and managed by finance experts Niall Kavanagh and Tom McDonagh.  Consultas Financial Services Limited is currently the only company authorised to carry out Debt Management Services in County Donegal.Both directors are experienced financial services professionals having occupied Senior Management positions in AIB, Bank of Ireland & Ulster Bank.Niall & Tom are Qualified Financial Advisors and are authorised to provide the following financial services, SME Business Consultancy, Independent Business Review & Analysis, Business Restructuring & Turnaround Specialists, Owner Manager Support Start Up Enterprises Business, Expansion, Raising Finance, Bank Relationship, Management Review, Bank Fees & Transaction Costs.Debt Management & Mediation Review, Personal & Business Debt, Advice on Debt Restructures, Negotiate with Financial Institutions, Provide Solutions to Debt Issues, Personal Insolvency & Bankruptcy Options.Consultas Financial Services Limited Registered Office Minchluaine, Golf Course Road Letterkenny, Co Donegal Tel: 01-5543904 Fax :01-5543906 Web: www.consultas.ie info@consultas.ieConsultas Financial Services Limited is regulated by the Central Bank of Ireland.Niall Kavanagh of Consultas is authorised by the Insolvency Service of Ireland to carry on practice as a Personal Insolvency Practitioner.CONSULTAS OFFER EXPERT ADVICE TO THOSE OF US WHO HAVE OVER BORROWED was last modified: June 8th, 2015 by Mark ForkerShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window)Tags:BusinessFeaturesnewslast_img

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