Ireland’s banking system has become a major talking point in recent years, and for all the wrong reasons. Tales of mortgage arrears, repossessions, tough-talking bank officials and personal debt are commonplace but, spotting an opportunity to help people, one former banker has now put himself on the citizen’s side.
“I have 42 years banking experience,” Rochestown man Peter O’Donoghue told Cork Biz, explaining that he set up his company, Financial Resolutions, in an effort to help both individuals and businesses engage with their bank and develop an agreed approach to any outstanding debt.
“If your marriage is in trouble, you go to a marriage counsellor and you try and patch things up from there. Almost as important is the relationship between a bank and its client, particularly in this environment, and I use my experience and knowledge of how banks work to let institutions know what their customers will be able to do and what they won’t.
“In a way I put my arm around the client, who is usually psychologically bamboozled by the stage they contact me - they dread the post, they dread going to work. I prepare a fresh business plan and talk to their bank in order to get the best possible deal. Banks have the option of appointing a receiver and incurring that expense or they can agree to see a certain amount of the debt frozen or written off, for example, or accept smaller repayments.”
The firm’s clients range from business people worth €10 million to individuals who are - in effect - worth very little. As someone who worked in the financial industry for decades, Peter acknowledges that it can be very difficult for customers to face up to the reality of their situation and find a way to move forward.
“Banks are actually sending me business because some of their clients are too traumatised to deal with their issues in a rational fashion. I put myself between the bank and the client and he or she can then get their business and life back together. I have 42 years experience of being on the other side of the counter and you have to be able to talk to these guys in their own language.
“No matter what the situation is, there’s always hope. How can a man that has been making concrete blocks for 25 years be expected to go in and deal with bankers, who aren’t the easiest people to deal with at the best of times – and I say that as a former banker. A lot of businesses are using their accountants to try and negotiate better terms but they have other issues like VAT returns, PRSI and PAYE to be concerned with and skills of persuasion are very important.
“There are very sad situations out there. Most people aren’t looking well and haven’t had a proper night’s sleep in a long time when they come into me. They are pretty raw human beings, and the first thing I have to do is to try and get them thinking in a better way and make them realise that it perhaps isn’t as bad as they think.
“Most banks have been recapitalised now and are more inclined to be reasonable as long as the customer is engaging with them and trying to be reasonable in return. I don’t exclude myself from these difficulties either. I’ve got loans. I took the view that property would be my pension so I started investing back in 1995 and I’m now a casualty of what’s happened myself. I know what people are going through. My primary concern is their debt and how it can be managed.”
Peter tackles everything from troubling credit card bills to business and personal loans than run into far more significant figures. He is based in Trinity House on George’s Quay and can be reached on (021) 4323056 or firstname.lastname@example.org.
For anyone concerned about the level of debt they are in, he has the following advice. “People have to realise that they cannot put their head in the sand. They should prioritise their creditors, by that I mean dealing with their secured creditors (who have security over an asset) first. Make sure secured creditors are as up-to-date as possible because they can sell your premises or family home, whereas an unsecured creditor isn’t in the same position.
“After that, be sure to engage with other creditors - or get somebody like me to do it on your behalf - and arrange the best possible terms and the best way to extricate yourself from the situation. I also think it’s important to say that anybody in trouble at the moment is in very good company. They might feel alone but they really aren’t and it is vital they talk their situation through with someone. The banks are in a more amenable position now, when it comes to negotiations, than they were even a few months ago.”