A professional needs to keep a house befitting his/her professional status?: liveline

Delboy said:

My take on this is that very few of the professional class will do the PIA route as it means having your name published. ...


The last thing they want is their names published. PIA is for the small man/woman....if they can afford the fees that is!

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Interesting point.

People who have only a mortgage on their home will be dealing directly with their mortgage lender and trying to sort out their unsecured debt through the Central Bank Framework.

People who have in excess of €3m in secured debt, can't use the PIA process anyway - unless the creditors agree.

But a solicitor or accountant who has a home and a few investment properties with loans from a few different lenders could derive real benefit from a PIA. As far as I know, they can still practise if they are in a PIA, but would have to cease practice if they are declared bankrupt.

But as you rightly point out, they would probably prefer to cut an informal deal with their lenders than have the publicity of a PIA.

dereko1969 said:

Yes but his apology and "explanation" do not address the point that people are raising here - which is that what he said is obviously what he thinks, that people in certain "professions" deserve better housing than those in the waged sector.

There was no "out of context" and his statement on radio wasn't a simple mis-speaking, it was a reflection of what he thinks and feels, that those of a certain status (in his eyes) should retain trophy houses due to the profession they're in whilst the rest of us can whistle dixie.

This isn't a case where the interviewer could be deemed to have goaded him into saying it, it was a case of one rule for the "professionals" and another for the rest of us.

Hate to break it to you Jim, but we're all professionals we're not working for free!

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There is no suggestion that Jim said "what he thinks". If you read the transcript again, he says that he " would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society"

As an advocate, his role is to represent, and argue on behalf of, his clients. The argument that some people need bigger houses than others may well be a tendentious one, but he is well entitled to make it, regardless of whether he actually believes it himself in the context of any particular situation.

And no more than a barrister who makes a questionable or downright outlandish claim on behalf of a defendant client, he is still entitled to make such arguments in specific situations without having his character impugned in any way.

dereko1969 said:

Hate to break it to you Jim, but we're all professionals we're not working for free!

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Just so the above quote is not taken out of context-I am not Jim.

In the truest sense of the word, not everyone can claim to be from the professional class.

T McGibney said:

There is no suggestion that Jim said "what he thinks".

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Jim Stafford: ... In practice, the PIP will also have to assess the type of house that might be needed for a professional person such as a solicitor, accountant or a hospital consultant as opposed to a house that's needed by someone who is in the PAYE sector for example ...

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In the above quote Jim seems to be saying what he thinks. It's unnecessary to tell us what the "owner" of the house thinks as in trophy houses cases of course they'll be thinking they need the house not assessing if they need it.

t mcgibney said:

there is no suggestion that jim said "what he thinks". If you read the transcript again, he says that he " would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society"

as an advocate, his role is to represent, and argue on behalf of, his clients. The argument that some people need bigger houses than others may well be a tendentious one, but he is well entitled to make it, regardless of whether he actually believes it himself in the context of any particular situation.

And no more than a barrister who makes a questionable or downright outlandish claim on behalf of a defendant client, he is still entitled to make such arguments in specific situations without having his character impugned in any way.

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+1

T McGibney said:

There is no suggestion that Jim said "what he thinks". If you read the transcript again, he says that he " would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society"

As an advocate, his role is to represent, and argue on behalf of, his clients. The argument that some people need bigger houses than others may well be a tendentious one, but he is well entitled to make it, regardless of whether he actually believes it himself in the context of any particular situation.

And no more than a barrister who makes a questionable or downright outlandish claim on behalf of a defendant client, he is still entitled to make such arguments in specific situations without having his character impugned in any way.

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Is there any ethical base or limitation on his role as advocate? He's actually making a case to allow his clients to explicitly mislead their own clients. He said that " that a solicitor should have a bigger house that accords with his professional status in society so that his neighbours and clients can see that, yes, this person is a good solicitor who's is living in a good house etc." - so the size of the house is a measure of how 'good' the solicitor is.

But yet, the person is insolvent, and there does not in reality, own the house. Therefore the person is by definition NOT a good solicitor by Jim's own measure. But Jim wants to use the insolvency process to allow his clients to mislead their own clients about how good they are. Nice....

T McGibney said:

There is no suggestion that Jim said "what he thinks". If you read the transcript again, he says that he " would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society"

As an advocate, his role is to represent, and argue on behalf of, his clients. The argument that some people need bigger houses than others may well be a tendentious one, but he is well entitled to make it, regardless of whether he actually believes it himself in the context of any particular situation.

And no more than a barrister who makes a questionable or downright outlandish claim on behalf of a defendant client, he is still entitled to make such arguments in specific situations without having his character impugned in any way.

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I find that laughable. If there is nothing untoward about his suggestion "that a solicitor should have a bigger house that accords with his professional status in society", what exactly was his apology all about?

The OECD report today said that the country was uncompetitive when it came to professional fees, specifically mentioning solicitors. Hardly surprising when you have people like Jim Stafford prepared to argue that they need to be seen to have the trappings of "status" in order to ply their trade. Whatever happened to attributes like competence and integrity?

To be honest, I don't care whether JS thinks a solicitor deserves more than the rest of us -- it is that he is planning to argue such an odious case that gets me. I hope that this little debacle hardens the resolve of secured creditors to not put up with the bleatings of his ilk, since he has set it out plainly that he's going to be spinning fables about his clients' needs.

My point stands.

An advocate's role & ethical obligation is to represent their client & advance arguments on their behalf. The argument that their advocacy should somehow be weakened in order to reflect an actual or mythical public interest is a novel one.

As for the point that banks, Revenue or other secured creditors should "harden their resolve" not to accommodate insolvency applications from distressed borrowers who have the temerity to actually negotiate with them, I dont know where to start.

I think some people have missed the point about PIPs

A PIP is not an advocate for the Debtor. A PIP sits in the middle between Creditor and Debtor with an obligation to look out for the interests
of both sides in an effort to pen an arrangement that is acceptable to both sides

A PIP is not a "financial" Solicitor acting for the Debtor

Hi Dr Debt

There is a problem with the role of the PIP as an independent mediator.

There is a conflict between their initial debt advisor role as an advisor acting in the client's best interest and in their later PIP role as a mediator.

So when I go to Jim Stafford for an intial meeting to explore my options, he is a debt advisor acting on my behalf. As a good advisor, he will set out the options and the pros and cons.

For most professionals, he would advise against a PIA and try to negotiate a deal directly with the bank. He would be firmly on the clients' side. He would adopt the role as described by Tommy McGibney - his opening negotiating position would be "Well my client must maintain a house and car in line with his status in society. And he gets a lot of his clients through the Parents' Council in St Gerards and on his two annual holidays to very expensive places. So to maximise his income, he needs to spend a lot".

Tommy sums it up well:

As an advocate, his role is to represent, and argue on behalf of, his clients. The argument that some people need bigger houses than others may well be a tendentious one, but he is well entitled to make it, regardless of whether he actually believes it himself in the context of any particular situation.

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The problem for Jim and for other debt advisors/PIPs , is that if he accepts his clients' nomination as a PIP, he must then switch from debt advisor mode to independent mode. That will not be easy to do.

In fact, I think that this is where Jim slipped up badly on the radio. He was talking as if he was acting on behalf of his client and making these "tendentious" arguments.

I was taken to task by a would-be PIP at a public meeting for suggesting that a Split Mortgage might be a fair outcome. He said that he would be batting very hard for his client to get the negative equity written down. He had to be reminded that his role as a PIP, was as an independent mediator.

The legislation, and all the publicity around it, has been very clear - we want to keep people in the family home, except in really exceptional circumstances. I don't agree with that, but I am in a minority.

Brendan Burgess said:

The problem for Jim and for other debt advisors/PIPs , is that if he accepts his clients' nomination as a PIP, he must then switch from debt advisor mode to independent mode. That will not be easy to do.

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I'd argue that it's downright impossible to do: a bit like the concept of "self-regulation", only worse. I'm surprised that this issue hasn't been raised more.

I will be raising it in my submission to the Central Bank's consultation paper on Debt Advice.

If you go to Dr. Debt for debt advice and he recommends a PIA, then he should refer you to someone else to act as the PIP, so that the independence can be maintained. And the debtor could continue to consult Dr Debt for advice on the PIA's proposal.

The independence "guarantee" is achieved through the veto.

If the PIP leans to the side of the Debtor and produces something completely one sided, then the creditor just says no.

There's not much room for conflict of interest, otherwise all the arrangements fail at voting stage.

You must keep reminding yourself that the creditors need to agree to the arrangements no matter what is being proposed.

The PIP is always considering 1) what is the optimum solution and 2) how to get the creditors to accept it. Its a constant juggle between these two.

T McGibney said:

My point stands.

An advocate's role & ethical obligation is to represent their client & advance arguments on their behalf. The argument that their advocacy should somehow be weakened in order to reflect an actual or mythical public interest is a novel one.

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Does the advocate have an ethical obligation to be honest and fair? If so, the advocate knows that allowing the debtor to keep the trophy house when he hasn't earned it is fundamentally unfair to the debtor's professional peers and competitors, and is misleading to the debtor's potential clients.

But regardless, it is useful to have confirmed my long-held suspicion that when I hear the 'usual suspects' moaning about any vague suggestion of tax increases, they are really just 'mouth for hire' advocates aiming to get the best outcome for their clients. That will help to keep things in perspective in future.

RainyDay said:

But regardless, it is useful to have confirmed my long-held suspicion that when I hear the 'usual suspects' moaning about any vague suggestion of tax increases, they are really just 'mouth for hire' advocates aiming to get the best outcome for their clients. That will help to keep things in perspective in future.

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I presume that isn't an attack on me?

In any case, perhaps you might please clarify it, as Jim Stafford is not a tax specialist and I've never heard of him making public comments in relation to tax rates.

RainyDay said:

Does the advocate have an ethical obligation to be honest and fair? If so, the advocate knows that allowing the debtor to keep the trophy house when he hasn't earned it is fundamentally unfair to the debtor's professional peers and competitors, and is misleading to the debtor's potential clients.

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You can make the same argument that it is "unfair" for "ordinary" people to want to keep their family home if they can't afford the repayments. Especially as any concessions such as split mortgages, or extensions of cheap trackers will come at the expense of shareholders and taxpayers.

I don't think it's "unfair" to try to get the best possible deal for your client, whether that is MABS acting for someone with a €100k mortgage or Jim Stafford arguing for someone with a €1m mortgage.

Brendan Burgess said:

...whether that is MABS acting for someone with a €100k mortgage or Jim Stafford arguing for someone with a €1m mortgage...

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AFAIK - MABS will only be doing DRN's -
Debt Relief Notices
A Debt Relief Notice (DRN) is a notice from the court that states that you are unable to pay your debts, and stops the lender from being able to take any action against you for three years. It is issued to debtors who have qualifying debt of €20,000 or less, have low assets, and a net disposable income of €60 or less per month.

Hi Crugers

MABS are the primary source of advice for people with unsustainable debt, whether it is a home loan or unsecured debt.

They will not be acting as PIPs. They will be acting as AIs (?) Approved Intermediaries for DRNs.

Dr.Debt said:

The independence "guarantee" is achieved through the veto.

If the PIP leans to the side of the Debtor and produces something completely one sided, then the creditor just says no.

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which is just another way of saying...

Jim Stafford said:

Whether a debtor gets to retain his family home is wholly dependent on the creditors. The same rules apply to trophy houses as they do to one bedroom apartments.

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Whether a debtor gets to retain his family home is wholly dependent on the creditors.

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While probably the wrong thread to ask - but I'll give it a go anyway.

What is a "family" home - in the legal terms of the Insolvency act.

Why couldn't they just say "home"? I'd assume that any discrimination based on what a family is considered to be would be illegal.

Perhaps they were trying to restrict the legislation to cover only one family home per family, no shoving someone into the holiday home and claiming it's also the family home.