As the credit crunch hits home, over-stretched families are facing mountains of bills that they can't afford to pay. In the first of a two-part special, Anna Murphy speaks to those people caught on the front line of the economic recession.
Aileen and John O'Toole are a typical Celtic Tiger couple. They enjoyed the good times of the last 10 years -- they went on holidays, bought their first house, and gave their children all the luxuries they could ask for.
But for them life has changed dramatically, and the word 'recession' became all too real after John lost his job six months ago. With three children and a mortgage, 2008 hasn't been easy for Aileen and John, who find themselves facing a mountain of debt.
"It's been a real shock to me," Aileen says. "Things used to be normal, the kids didn't want for anything and we had a good life. I'd never been in debt.
"Then all of a sudden everything changed. The ESB, gas and phone bills all started to pile up and we got into arrears very quickly. I'd have paid off a quarter off one bill when the next one came in."
Aileen's story is increasingly typical. The recession is officially here, and it is sitting on firm foundations of debt. Whereas the recession in the 1980s was characterised by crippling Government debt -- the hallmark of this one is personal debt.
Over the past 10 years, the level of household debt has increased more than sevenfold, and now 37pc of Irish people are finding it a struggle, at least some of the time, to keep up with their bills and credit repayments.
The problem is, all that debt is not being repaid -- over a third of us not repaying our non-mortgage debt in full on a monthly basis.
'In terms of the volume of debt and the amount of debt, we're seeing a substantial increase year on year," says Nick Biggam of the debt collection agency, Intrum Justitia.
"The average balances of phone-bill debt and credit-card debt are all building and people are accumulating outstanding bills at a higher rate.
"Already in the first quarter of this year there has been another dramatic increase in the number of defaults across the board.
"A number of factors are feeding into this, the cost of borrowing has gone up and unemployment is rising as well. The two of these combined create big problems."
Myvesta is an international not-for-profit organisation that provides advice to people experiencing debt. Due to the increasing demand for debt advice here, they opened an Irish operation last year.
"Even in the past six months we have seen changes in how things are in Ireland," says Sean Tyrer, head of Myvesta's Irish division.
"With the credit crunch there is an acceleration in the number of people coming to us. In particular, people are finding now that they are being refused debt consolidation loans and are trying to find out what other options they have.
"The people we're helping in Ireland come from all walks of life -- there are people from middle management, people from senior management, single mums. Debt does not discriminate. For many people, their lifestyle is being funded by credit. A lot of people in Ireland have gambled on property, and in the current climate their balance sheet is changing very quickly.
"With costs rising and assets falling, it's a double whammy, and a lot of people are getting squeezed."
The first sign of trouble is generally the household bills, then the credit card. But difficulties in those areas now can indicate more serious difficulties down the line.
"We deal with unsecured lending, that is utility bills, credit card bills -- most loans other than mortgages," says Nick Biggam of Intrum Justitia.
"These types of loans are an indicator of how things are going in other sectors -- the phone bill or the credit card is the first thing people default on, they are much slower to default on their mortgage.
"If we're seeing such an increase in defaulting in our sector of household bills and credit cards, then it's most likely that those debts will filter through to the mortgage sector later in the year. Based on the figure for the first quarter of this year, I think things are set to get worse."
That worsening trend has already started. Twice as many homes were repossessed in 2007 as in 1999.
Between 2006 and 2007, there was a 50pc increase in possession applications and mortgage lawsuits. For Aileen O'Toole, losing the family home is her biggest fear.
"Our mortgage is e1,300 per month. If we were renting we'd be entitled to e1,200 a month for rent, but because we're paying a mortgage, social welfare will only pay towards the interest on the mortgage which is e600 a month. All in all, we've just e400 a week to live on at the moment, so we can't afford to pay back any more and we're talking to the bank about restructuring the loan."
Homeowners are not the people traditionally associated with debt in Ireland, but in the last few years all that has changed. John-Mark McCafferty, head of social policy with St Vincent de Paul, says more and more middle-class people and homeowners are coming to them with money problems.
"It's not just people on social welfare who are looking for help -- we are hearing from people with mortgages, people who, based on appearances, you would think are doing okay," he says.
"But those who work can actually be very vulnerable because they aren't eligible for rent allowance or medical cards.
"They have to pay for everything from a small salary and get nothing in return. For them debt in one form or another is common."
Nuala and Michael are one such couple who never thought they would need the help of St Vincent de Paul.
"Everything had been going fine for us for years," says Nuala. "We both had jobs, we'd enjoy the odd night out, the children didn't want for anything, and we'd usually have a holiday once a year. We'd both been working all our lives and assumed we always would."
But the downturn in construction had a big impact on their family business. In particular, they just couldn't get paid.
"Two big companies owed us a lot of money, but they wouldn't pay up," says Nuala.
"We had 10 employees to pay, and after that there was no money left for our wages.
"For a full seven months we had no salaries, not a cent coming into the house. In the end we had to close the business.
"It's hard to believe that things can change so much so quickly. The worst thing of all is that for a full year we didn't get any help from anyone, except for friends and family.
"The social welfare told us we weren't entitled to a thing because we were directors of the company.
"My husband was so embarrassed going down there, it's the first time in our lives that we've had to look for help for anything and they just made us feel awful.
"Our gas was cut off for months, and over Christmas things got really tough. At this stage the mortgage hasn't been paid in a year, and we have a folder full of court letters."
McCafferty believes that the recent economic changes are a big factor in the increase in people needing assistance. However, unpredictable life events mean few are insulated from financial pressure.
"The nature of indebtedness changes, different people experience it at different times. For example, recent changes in the construction sector are impacting on people connected to that.
"But there are a whole variety of ways people get into debt -- a one-off trauma or crisis where there are no savings to deal with it, or simply there isn't enough coming in to meet with daily household demands.
"Gas, electricity and food prices are all increasing and these can really impact on vulnerable people."
Aileen O'Toole is still adjusting to the fact that she is now one of these vulnerable people.
"I'd never realised before how expensive everything is, and the prices just keep going up. I don't know how I'm going to pay for their books and uniforms next year.
"My eldest is hoping to get the points for university, and I just don't know how on earth we could afford that the way things are now."
* some names have been changed.
Where we're cutting back on spending
Consumer research company Mintel that says the majority of Irish people are more conscious now of what they spend and are certainly starting to feel squeezed.
As a result most of us are making major lifestyle cutbacks.
"The kneejerk reaction is to save money by staying in", says Julie Sloan, Head of Research for Mintel Ireland.
"That means spending less money on eating out and entertainment, so pubs and clubs might be the first to suffer."
Mintel research earlier this summer indicated that 60pc of Irish consumers were planning to buy fewer new clothes, shoes or jewellery, 55pc were thinking of cancelling DIY and home improvements, while over 40pc were planning to cut back on grocery shopping and household spending.
"It is expected that consumers will have to ease back on non-essential purchases especially with regards to luxury items.
"These are the sort of sacrifices in consumer spending that will take place in the next 12 months."
And if you think you've got it bad
It's not just the average wage-slave who's feeling the pinch. Consider the plight of New York's super-wealthy elite. (And take that smile off your face right now.)
A record number of couples with $10m or more in assets are suing for divorce.
New York lawyer Raoul Felder, who works exclusively with the very rich -- he represented Larry Fortensky in his divorce from Elizabeth Taylor -- said that his company's caseload had soared from 250 to 300 in the past year.
This is the biggest jump since 1980, when New York state law was changed to add four new grounds for divorce to the sole existing one -- adultery.
The impact of the credit crunch has slashed what were once multimillion-dollar bonuses to virtually nothing for many Wall Street executives, hedge fund managers and property developers, while thousands of others have lost their jobs in the property crash.
One New York divorce lawyer said one client was worried that his wife would leave him if she found out that his net worth had fallen from $20m to $8m after he suffered huge losses on property and other investments.
To keep his wife, he was trying to mask his declining fortune by borrowing to pay for her clothes and holidays.