judgment and buying property

Hi there,

I am 6 years into an installment order for a debt that was for €14,000, I have since repaid €2,000 so my total debt now stands at €12,000.

My parents have recently sold their home and are downgrading, they want to give me €150,000 to be able to purchase a family home for my spouse and children. We currently rent from the local authority.

Because I have 6 years to go on my debt repayments before they become statuate barred I am worried that the creditor could force the sale of this new home before we even set foot in it!

The debt was at a previous address and I have since moved, I have never heard from the creditor since the installment order was granted but I have continued to pay the debt each month as ordered. I have never furnished my new address details to the creditor so I have no way of knowing if they were trying to contact me or not. However they once did contact me through my bank to inform me that the debt was being paid into the wrong account, (they gave me the wrong details!), so I have no worry that they could contact me if they so wished.

I could ask my parents to sign the property into their names however If they left it to me in a will it could be a case that along with their own property both properties and land they own would eat into my inheritance tax allowance and something would have to be sold in order to meet the tax demands. Should something also happen to me my wife could be left without a home and forced to sell the house we live in due to the class of inhetitance tax she would come under.

Thanks for any advice that is given.

Why dont you take 12 of 150 and repay it first?

peteb said:

Why dont you take 12 of 150 and repay it first?

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well for 3 reasons.

1, its my parents money and they dont want to spend it on banks after the crash they caused.

2, the house they want to purchase for me is 150,000.

3, I disagree with the debt and the way it was handled, however im stuck with it for another 6 years.

Say you've come into a small bit of money,and offer them a small full and final settlement of the debt.
Second thoughts,say you've had an offer of a small loan from a relative.

Couple of things here:
The CAT thresholds are cumulative so getting 150k now will eat into the current Group A threshold of 225k.

Based on what you have written and assuming you are the only children they have then a bit of estate planning might be in order if the numbers warrant it. Included in that process is maybe liquidating some of the assets now so as there is cash in the estate rather than assets that would have to be sold to pay inheritance tax.

Use the annual gift tax exemption of 3k from anyone so assuming you have 2 kids
That means each of your parents could gift 3k per head per annum to all 4 of you.
This would yield 24k, assuming they have the cash.

Your parents could lend the money to you to buy the house in your name and register a charge against the house for the loan to protect their interest and also to keep the asset from being attacked.

Just on the judgement debt: I am interested in learning here.

How do you arrive at the conclusion that you can walk away from the debt in 6 years.

Based on what you have written, you have paid 2k off in 6 years, so another 6 years will bring it to 10k so maybe Vandrivers idea is worth looking at because if what you have written is correct giving them 2k now should be enough to get rid of it.

However you need to be very careful about this because I would imagine that the court judgement was based on your means then, and if they get a sniff of further assets they may have the right in the paperwork to go back to the court to seek an adjustment.
Good luck

A creditor has 12 years in which to enforce a judgement.Your creditor has already enforced judgement.Are you confusing your facts.

vandriver said:

A creditor has 12 years in which to enforce a judgement.Your creditor has already enforced judgement.Are you confusing your facts.

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Surely a creditor can return to the court to have my repayments looked at, or seek other methods of payment?

Thanks

B2mac 3.

If after 6 years you have only repaid k2 , you will effectively never have it repaid.
It will hang over you and that is not good.
Vandrivers suggestion is good.

1. Contact the creditor and ask what they will accept in full settlement.
They will come back with (funny) figure eg 6000.
From their view and from my experience 25% ie max 3,000 should tidy this up.(particularly if it is a finance type judgment)
Be prepared for a paper chase on this.

Need more info on who judgment is with . I take on board your disagreement with handling of debt but remember they hold the judgment!

Thanks for the replies.


In response to your point about coming to an agreement with the bank in regards to the judgement, If I had the cash I would.

As it stands I dont have any savings or offers of loans to be in such position that I could reach agreement with the bank and settle.

My parents have very kindly offered to purchase myself and my family a home, they havent offered me and money to pay back a debt that has a judgment.

As I understand it the creditor can only enforce judgement for a period of 12 years, after the 12 years the enforcement becomes statuate barred. Could anyone confirm this?

b2mac3;

I hear you and I hear your wish not to use parents funds.

If your parents purchase a house for you , you will then have asset that creditor can come after (can you risk that?)
Even if judgment cannot be enforced for 12 years , (are you prepared to wait another 6 years?)
I would presume? your parents would not be adverse to using a small sum to have you 100% set-up?

No disrespect , but maybe your way of sorting things need adjusting?

Gerry Canning said:

b2mac3;

I hear you and I hear your wish not to use parents funds.

If your parents purchase a house for you , you will then have asset that creditor can come after (can you risk that?)
Even if judgment cannot be enforced for 12 years , (are you prepared to wait another 6 years?)
I would presume? your parents would not be adverse to using a small sum to have you 100% set-up?

No disrespect , but maybe your way of sorting things need adjusting?

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Thanks Gerry for your reply.

I dont have any issue in regards to waiting 6 years, In fact that is another issue I am looking for advice in regards too with a accountant due to tax reasons.

One of the options is for my parents leaving me the property in their will, providing I have lived at the address for a period of more than 3 years as my main residence I can avail of tax exemption from my inheritance tax allowance.

If I had the funds available to clear the debt, belive me I would clear it. There is nothing worse than having this hang over my head for the past 6 years with a further 6 years to go. Id love to be in a position to simply clear it and move on with my life, problem is that the bank (BOS) acted ubfairly in my view and even played a lot of games to get the judgement. Such as issuing the court summons at my old address and never informing me of judgment. ( only found out through the court service afterwards).

As it stands today it appears the bank dont know my new address, (Despite myself informing them), after the lies that was used in obtaining judgment against me Im worried that they will continue to lie and chase me for more things such as sending in baliffs etc.

Very very unlikely BOS will send bailiffs etc to address (ie wrong one).
BOS may well have lied/shuffled etc but they hold judgment.

They want out of Roi and will take a poor offer to get rid of this ( I know you have no direct funds)

If you live in property for long-nuff and parents have it willed to you ;
hopefully you will all live 6years +; you should have no issue with Bos and minimal ,if any inheritance tax.

I read your anxst on Bos and read it that you would like to string them up!
They ain,t worth it.
Suggest ,do today whatever it takes to get closure and move on.

Good Luck.

b2mac3 said:

One of the options is for my parents leaving me the property in their will, providing I have lived at the address for a period of more than 3 years as my main residence I can avail of tax exemption from my inheritance tax allowance.

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This exemption changed in 2007 - it now only applies if your parents were dependent on you. It may of course change again.

Don't mean to go off topic but I can't find where the change in the dwelling house exemption changed so as to only apply where parents are dependents

Revenue's leaflet is here - see point c-

Gifts taken on or after 20 February 2007: Any period during which a donee occupies a house that was during that period the disponer's only or main residence will be disregarded as a period of occupation in that house unless the disponer is compelled, by reason of old age or infirmity, to depend on the services of the donee for that period. Old age refers to a person aged 65 or over.

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As I look at it again, it doesn't explicitly say you have to be living with the parents, and as ever "old age or infirmity" means everyone over 65 so may work out for OP.

I would suggest if this exemption makes or breaks the numbers stacking up for him he should as always get professional advice. It may be that his likely inheritance will be below the limit in any case.