Killarney Credit Union

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Killarney Credit Union

Financial Difficulties

Experiencing Financial Difficulty? We are here to help!

FINANCIAL PROBLEMS


Background:

At Killarney Credit Union Ltd., we take pride in the service we provide to our member’s. The Board of Directors have a mission that in everything we do at Killarney Credit Union, the “Member Matters Most”. The Credit Control Committee (CCC) who are made up of board members are responsible for monitoring the loan book throughout the year and consider the recoverability of loans that have fallen into arrears. The committee also reviews policies and procedures on an ongoing basis to ensure that they are compliant with changes to laws and regulations, and sufficient to assist members who fall into arrears on a temporary basis but robust enough to pursue members who fail to engage in any way with the Credit Union. The principle aim of the committee is to ensure that all loans are recovered, and where possible interest is paid.

The Credit Control Department reports directly to the “CCC”. The staff within Credit Control carry out their duties following the policies and procedures as provided by the Credit Control Committee and approved by the board.
Killarney Credit Union Ltd. understand that every member who borrows from the Credit Union intends to repay their loans in full as agreed. It is however expected that most member’s circumstances will change during the term of the loan, and while our loan officers try to predict some of these changes at loan assessment stage, it is inevitable that some loans will fall into arrears. When this happens the Credit Control Department is here to help.

Early intervention with members who fall into arrears is very important and we would appeal to any of our members having trouble to contact our Credit Control team, who will examine their situation and advise them of the ways in which your Credit Union can help. The earlier the engagement the more options that are available. Our staff receive regular training and are very experienced in helping members in financial difficulty. Killarney Credit Union was there to provide the loan when you had a financial need, now that you are experiencing financial difficulty , we will continue to be there to support you!

We will also continue to work closely with consumer bodies and voluntary organisations such as MABS (Money Advice & Budgeting Service).

If you feel that you might need support with your loan, please contact Margaret on 064-6623734

Mortgage Arrears: If you have a mortgage with Killarney Credit Union, and are experiencing financial difficulty or expect that you will not be able to meet your payments as they fall due please click here.

SME Arrears: If you have a business loan with Killarney Credit Union Ltd., and are experiencing financial difficulty or expect to experience financial difficulty (pre-arrears) please click here

Frequently Asked Questions 

Business Loans Arrears

business

 Guide for SME’s experiencing Financial Difficulties

At Killarney Credit Union, we understand the challenges that face our members and their businesses. When we lend to businesses our underwriting team try to envisage the challenges which that business may face. However, it is probable that some businesses, despite the best efforts of our members will experience cashflow difficulties from time to time, that could lead to their loan falling into arrears. The longer the term of the loan the greater the probability that something unexpected will happen in the business. This could be something positive such as a large order that required cashflow to be diverted for a short period of time, or something negative such as stock contamination. While we hope that our member’s businesses circumstances will always change for the better, we accept that there will be occasions during the term of the loan that some businesses will experience financial difficulties that affect their ability to meet their loan repayments as expected.

The Central Bank or Ireland, has published Regulations for Business Lending to Small and Medium Sized Enterprises (SME Regulations). This booklet outlines how Killarney Credit Union Ltd deals with SME’s who find themselves facing financial difficulties or experiencing financial difficulty. These regulations became applicable to Credit Unions from 1st January 2017.

The Objectives of SME Regulations;
• A clear definition of the circumstances which define when an SME is regarded as “in financial difficulties”.
• Facilitate access to credit for sustainable and productive business propositions.
• To promote fairness and transparency in the treatment of small to medium enterprises.
• To ensure that there is a structured approach that the member understands at the outset, the aim is that KCU will assist the member, and their business to meet their obligations where possible.
• To outline the communication and information requirements when the SME is in financial difficulty

Ultimately, we want to assist members to resolve their financial difficulties and find a way to get them back on a repayment plan that is sustainable and will allow the members business to prosper and grow.

For more information please call to the Credit Union for a copy of our SME booklet, or alternative click here to download a copy in PDF format.

SME members who are in arrears, or in fact in danger of falling into arrears should call 064 66 23720 or email This email address is being protected from spambots. You need JavaScript enabled to view it. to arrange an appointment as soon as possible.

Home Loan Arrears

mortagge arrears

A Guide to Mortgage Arrears Resolution Process

The Mortgage Arrears Resolution Process (MARP)

A member’s home is their most important asset. When members borrow money to buy a house, it is important to explain to members the importance of maintaining loan payments as per the agreed schedule. Equally important is for the Credit Union to have a process in place when it is no longer possible to make payments as planned. Killarney Credit Union is required under the Code of Conduct on Mortgage Arrears (CCMA) which is issued by the Central Bank of Ireland to have a MARP in place for its members who experience financial difficulty and are in arrears, or are at risk of going into arrears (Pre-Arrears) on their mortgage with the Credit Union.

Killarney Credit Union is committed to assisting members in financial difficulty, weather those difficulties are temporary or more permanent in nature. Our goal is to get members back on a fair and sustainable payment plan as soon as possible, and to this end co-operation is necessary. If members don’t work with us towards this solution, they are at risk of being deemed non-cooperating, which will ultimately result in those members losing the protections afforded under MARP.

It is important to note that the CCMA and MARP only apply to mortgage loans that are secured against a members Primary Residence. This means the house which you principally reside in as your “home” or the only residence you own within the state, weather occupied by you or not. Please see www.centralbank.ie for further clarification on the CCMA.

There are 4 Steps to MARP:

1. Communication

2. Financial Information

3. Assessment

4. Resolution

For more information please call to the Credit Union for a copy of our MARP booklet, or alternative click here to download a copy in PDF format.

Killarney Credit Union has a specific department, the Arrears Support Unit that deals with members who have mortgages with the Credit Union, who are experiencing financial difficulty. Please contact 064 66 23720 (Mon – Fri 9:30am to 5:30pm) or email This email address is being protected from spambots. You need JavaScript enabled to view it.

WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT

WARNING: IF YOU DO NOT MEET THE REPAYMENTS ON YOUR CREDIT AGREEMENT YOUR ACCOUNT WILL GO INTO ARREARS. THIS MAY AFFECT YOUR CREDIT RATING WHICH MAY LIMIT YOUR ABILITY TO ACCESS CREDIT IN THE FUTURE

The government has set up an independent Mortgage Arrears and Information advice service. For more information visit www.keepingyourhome.ie or phone 0761 07 4050.

Budgeting Tips

budgeting tips

1) Get ahead of your loan!

When borrowing from Killarney Credit Union, the loan officers will endeavour to structure the repayments over an appropriate term for the amount and purpose of the loan. To this end they may average a member’s income for the year to arrive at and affordable repayment amount. All loans from Killarney Credit Union are variable interest rate loans, with flexible repayment amounts and no early repayment penalties. Members who work seasonally should where possible try and “overpay” or “prepay” their loans, so that if their income reduces in the winter months, they can reduce their repayments to an affordable level for the period of unemployment without falling into arrears.
2) Identify one off annual expenses and annual occasions.
Divide Expenses into yearly, quarterly and monthly payments. For annual payments (such as car insurance, car tax etc.) try to agree monthly payment plans. The Credit Union “Bill Pay” loan may help with this. It will allow you to bundle several annual bills into a single loan repayable over 12 months in regular weekly/monthly payments.
3) Identify Necessary unavoidable expenditure Vs discretionary expenditure. It is important to prioritise the expenditure in your household budget. Social Welfare income is only designed to give a member a reasonable standard of living, it does not provide for discretionary expenditure such as expensive family holidays.
4) Set a Goal
When the household budget is complete review each element. Identify areas where your income may be improved. Identify areas where expenses could be reduced. Review possibility of changing utility providers.

5) Get the balance right between planning for retirements and living for today! It is right and prudent for members to plan for retirement. However, independent financial advice should be sought regarding the appropriateness to continue contributions such as pension policies, savings plans or life assurance when experiencing financial difficulty. It may be necessary to reduce such contributions in the short term to be able to afford repaying loans.

5) Reduce your shopping 

  • Shop with a list. If you decide in store you will spend more – use loyalty cards/coupons etc
  • Shop for bargains and cut back on non essential items. Be smart. Shop for store brands
  • Local butchers offer great deals
  • Eliminate waste – watch what you bin!

6) Look at your services. Are you getting value for money on the following?

7) Other tips

  • Are you claiming all your tax benefits or social welfare entitlements? Visit www.revenue.ie and www.citizensinformation.ie for more information.
  • Make your own lunch
  • Could you reduce your travel/parking costs (walk or cycle to work/ car pool?)
  • How much do you spend on socialising/entertainment?
  • If you have older children living with you that are receiving an income, could they contribute towards your household expenses?Remember the secret to getting rich – “Spend less than you earn”.

 8) Review your income and expenditure

The solution may be a revision of your Income and Expenditure, as well as assistance with your Budget Planner. 

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Helpful Links

If your circumstances have changed, a little help goes a long way.

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MABS

The Money Advice and Budgeting Service) is a free confidential independent service that provides help and expert advice to people who are experiencing difficulty in managing their money. 

Contact (Kerry Office):

Edward Court, Tralee Tel: 0761 07 2190 Email: This email address is being protected from spambots. You need JavaScript enabled to view it.  Web: www.mabs.ie 

 

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Competition and Consumer Protection Commission

CPCC is there to help with free and expert information on consumer rights and personal finance.

Their website is a single resource for information on your consumer rights, financial products and help with managing your money.

Contact:

www.cpcc.ie or phone Lo Call 1890 432 432 or 01-402 5500

 

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The Citizens Information Centre

Your one stop shop to your rights, entitlements and information.

Contact:

Tralee: 4 Bridge Lane, Tralee Tel: 066 712 3655

Castleisland: The Island Centre, Castleisland Tel: 066 714 3992

www.citizensinformation.ie

www.losingyourjob.ie 

 

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Social Welfare

Your local social welfare office will advise you of your social welfare entitlements.

Contact:

Godrey Place, Tralee Tel: 066 714 9500 www.welfare.ie

 

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HSE Community Welfare Service

Your Community Welfare Officer will advise you regarding the Supplementary Welfare Allowance Scheme and assist you with making claims appropriate to your situation.

Contact (Kerry Office):

14 Edward Street, Tralee Tel: 066 718 4801  Web:  www.hse.ie 

 

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Tax - Revenue

For information on your entitlement to tax credits, income tax refunds, etc.

Contact:

www.revenue.ie or ring Lo-Call: 1890 22 24 25

 

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St. Vincent de Paul Society

The aim of the St. Vincent de Paul Society is to tackle poverty in all its forms through the provision of practical assistance to those in need.

Contact (Tralee Office):

Ozanam House, Friary Lane, Tralee Tel: 066 712 8021

Contact (Castleisland):

Church Street, Castleisland Tel: 066 714 2234

Arrears FAQ

Frequently Asked Questions

FAQ

Q) What are Arrears? There are two types of arrears, interest arrears and principle arrears.
Interest arrears is the amount of interest that has built up on your account since your last payment. Interest is accrued daily based on the loan balance. When a payment is missed, interest continues to accrue on the loan balance until the next payment is made. Where interest has accrued longer than the agreed repayment term, this is referred to as interest arrears.
Principle arrears When a loan is drawn down, the amount borrowed, interest rate, term and agreed level of payments are used to generate an “amortisation table”. This is effectively a plan as to how the loan is intended to be paid. When payments are missed the actual balance falls behind the point where the balance had “planned” to be at this point in the loan. This is referred to as principle arrears.

Q) I am paying my loan but the balance isn’t reducing? If you miss payments as per your agreement, interest will continue to accrue. That may lead to the interest figure growing to an amount that is greater than your repayment amount. When this occurs, your next payment will be applied against interest first. Once all interest arrears have been cleared the principle loan balance will reduce.

Q) Why are my arrears not reducing even though I am paying my loan every week as per my agreement? Arrears are the difference between where the loan balance should be and where it is. They have occurred because a repayment (repayments) have been missed. These missed payments have caused the arrears gap to be created. On resuming payments, a member can stop the gap growing, but the loan will still be in arrears. The only way to reduce the arrears is to increase your repayment to more than the amount originally agreed (gradually reduce arrears over time) or pay an amount equivalent to the missed payment together with any additional interest arrears (clear loan arrears in full)

Q) How much do I owe? Each time you transact with the credit union you receive a statement. The statement will contain the Loan Balance (Principle amount owed), the Interest balance outstanding (if applicable), and will show arrears or prepayments if applicable (prepayments are shown as arrears but are negative to reflect ‘negative arrears’). If you add the Loan balance plus the amount of interest outstanding you will get the total amount owed by you to the Credit Union.

Q) How do missed payments affect my Credit Rating? As part of the Loan application process, Killarney Credit Union seek consent from members to access the Irish Credit Bureau for information relating to their credit history. As part of this consent members authorise us to share information about your loan with the bureau if it is granted. This information included the amount borrowed, and the up to date balance each month. When a loan falls into arrears this is reported to the ICB and a record of the arrears will appear on your Credit History for a period of 24 months after they are cleared.

Q) What should I do if my circumstances change and I can’t afford my loan? Communication is key! We can only help if members engage, so if you find your circumstance have changed, and you are struggling to make the payments, call the Credit Control Department and they will review your updated circumstances and explain the options available.

Q) I was unemployed and haven’t paid my loan for a few months. If I return to repaying my loan will I be able to borrow from the credit union again in the future? The credit union is a community based organisation, and decisions on underwriting are made locally. Our underwriting criteria places the most emphasis on ability and willingness to repay. If you return to repaying your loan when your circumstances change for the better, it is this fact that will be remembered from your period with the credit control department. You will not be assessed based on missed payments when your circumstances deteriorated, you will be assessed on how you engaged and cooperated with the credit control process.

Q) What happens next? Make an appointment to meet with somebody from our Credit Control Department on 064 663 1344. We will assist you in completing the household budget if you are having trouble doing so and we may identify areas in which savings could be made. We will consider whether the changed circumstances are temporary or permanent in nature and will provide the appropriate options that are applicable to you.

Download the household budget form. This form will help members summarise their income and expenditure, their assets and liabilities. The summary gives a list of most of the common expenditures that members will have and need to prioritise. All figures should be brought to monthly equivalents (i.e. if your wages are weekly: Multiply by 52 and divide by 12 to get monthly figure). Only once you understand what you spend your money on can you prioritise and ensure that the important bills are met.

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