Farmers who attended an ICMSA meeting on so-called vulture funds were given hope that the funds could be dealt with.

Personal insolvency practitioner (PIP) Gary Digney of PKF-FPM Accountants told the crowd in Portlaoise on 12 December that bankruptcy was a last resort.

We’re seeing more and more farmers getting in touch

He highlighted that an increasing number of farmers were using the services of a PIP.

“Almost €40bn non-performing loan sales occurred in the last three years,” Digney said.

“Vulture funds want to buy for X and sell for X multiplied by 10.

"Vulture funds want to sell as fast as they can; they’re not planning on being here in 20 years.

Negative equity

“Two years ago we wouldn’t have had one farmer, it would mostly have been debtors in negative equity.”

“But since the banks have sold the agricultural loans, we’re seeing more and more farmers getting in touch to see what options are available.”

He said that under legislation brought in in 2015 under the Personal Insolvency Act that no debtor should have to leave their home or sell their farm.

Digney said the legislation was unique to Ireland and allowed a PIP to implement a protective certificate, which provided a moratorium of 70 days where the vulture fund could not appoint a receiver, allowing the farmer a chance to work on a sustainable solution.

“The farmers want to pay the debt; they just need a chance to pay it,” Digney said.

“The biggest threat to farmers I see at the minute is access to correct advice.

“When it comes to vulture funds, you need to have knowledge of the Personal Insolvency Act.”

Personal insolvency arrangement

He said that the act allowed for a sustainable solution to be presented to the vulture fund and, if necessary, the courts could determine that the fund must accept a personal insolvency arrangement.

Vulture funds should be in a better position to make a deal and possibly write down debt and fix interest rates, according to Digney.

Although rates of charge for PIP service vary depending on the case, the organisation Abhaile provides a €500 voucher towards a PIP visit and legal aid can be applied for by farmers who require representation in the courts.

Frustrated

Many farmers at the meeting vented their frustration at the banks.

“There’s a degree of anxiety and there’s a degree of disappointment for farmers who find themselves under severe financial pressure,” president of the ICMSA Pat McCormark said.

“It’s not just vulture funds, interest rates were a hot enough topic tonight as well and obviously the fact that our European counterparts as farmers can have a significantly lower interest rate.”

He concluded the meeting by wishing everyone a happy Christmas and said that he hoped the advice given at the meeting could mean that people in difficult financial situations could go away feeling a bit more hopeful going into the new year.

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