Advice needed on whether we are technically in arrears?

S

struggler

Registered User
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Are we technically in arrears?
We have had our current mortgage on several consecutive interest-only arrangements since I lost my job 5 years ago. Each time we went through the application process, and have never missed a full payment, always making the agreed payments. There were a couple periods when we were paying the full amount. Recently my self-employment has started to finally make some money, so we have voluntarily moved to an interest plus capital agreement, where we are paying a set amount per month that is all we can afford-- more than interest only, but less than the full amount. Until recently, was planning on ramping up my repayments as business grew until we were up to full payments.

Just curious at this point about defining "arrears"-- is it technically meaning that you are behind the ORIGINAL agreement, or that you have missed one or more of the REVISED payments? In the one case, we are definitely in arrears, in the other, we are not.


This is coming from a recent call from AIB saying that we are in arrears and our mortgage is "unsustainable" and that we should sell up. Going to get my numbers together and do a Case Study tomorrow.
 
I don't think you are in arrears if you met all the agreed payments.

For example, if you get a 12 month full payment moratorium and pay nothing, you are not in arrears at the end of it.

Your mortgage could well be unsustainable although you are not in arrears. If they put you on full repayments would you be able to meet them.

it's a very interesting question, so I look forward to the case study data.
 
Arrears is a mythical figure that hardly anyone understands.
Technically you could have arrears of €100,000 and have only €1000 left to pay on a loan.
When you pay the final €1000 your arrears would be zero.
 
Welcome to AAM Struggler !
Hang in there. This is a constant hot spud topic on this board.
The definition of arrears is like watching a sand dune in the wind.
Please do post you case study so the money can be looked at.
Plenty to read on the topic and tons of help in dozens of threads.
Most importantly of all - take none of the banks slippyness
 
I heard a funny story lately about a bank who rang a customer threatening hell, fire and brimstone over an arrears amount. Customers were on the older side and a bit confused as they thought they had been paying away even quicker than required and should be nearly at the end of the mortgage. Anyway they went to a friend who had previously worked in banking with the info and it turned out that they actually only owed less than €500 in total on the mortgage, not alone was there not arrears but the figure the bank employee was looking on his screen was actually a credit arrears figure, as others said the arrears figure is just a notional figure so if you paid over and above it becomes a credit.

Needless to say they paid off the 500 quid, made a complaint over the stress caused by the aggressive phone call and got a few bob compensation so clearly some bank employees don't even understand their own systems.
 
Thanks for all that. I hate all these "fudgy" words that don't mean anything!
In my head, we are not in arrears, as we have made all the agreed payments. I can see how the bank could think we are, though.

Sustainability is the next thing...
 
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