Any PIA relief for those with positive equity in their home?

[patch35]

Personal and income details :
€402. p.w., social welfare. Worked as Fitter (Eng.) for 31 years up to 2006. Rheumatoid arthritis set in. Now unemployable and exist on disability allowance.

Net income spouse :
€102. p.w. half carer allowance.
homemaker.
3 children, € 260. Child benefit.
M.I.S. €53.

Home loan:
Bank of Ire. outstanding mortgage : €120,000.
Home value : €200,000.
5.2% svr.
Monthly €440, interest only, since Nov. 2010. Have never missed a payment. Unsure if this means that I am in arrears or not ?.

Other loans and creditors :
Credit union €700 loan. Shares €900.
Credit Card €3,800.
Family €3,500.

Other saving and investments :
Unfortunately, none.

How important is retaining the family home to you.
Essential, We do not want to live any where else.

Any other relevant info :
I am 53 and my wife is 50. We have 12 years to go on mortgage.

What is your preferred realistic outcome ?
I am not in a position to repay the full loan but if I could get some debt forgiveness that would allow me to pay off the mortgage as best that my income will allow, bearing in mind that short of a miracle I will not work again and our social welfare income of €500 is about average now.

 

[Brendan Burgess]

Hi patch

While you are in an unfortunate position, why would or should the bank give you debt forgiveness? You have a valubable asset - net value €80,000. Why should the bank reduce the loan - so your valuable asset can become more valuable?

The only cases in which people get debt forgiveness is where they have huge negative equity and they agree to sell their home. The lenders may agree to write off the shortfall in these cases. Even still, they are very reluctant to do so.

Personal Insolvency Arrangements are for those who are insolvent. You are not insolvent. You can sell the property , pay off the mortgage and be left with €80k in the bank.

Home loan:
Bank of Ire. outstanding mortgage : €120,000.
Home value : €200,000.
5.2% svr.
Monthly €440, interest only, since Nov. 2010.

The APR on Bank of Ireland home loans is 4.35%, which would be around €435 per month. So your repayment figure is correct, but you have quoted the wrong SVR.

Unfortunately, Bank of Ireland may be forced by the Central Bank to force you to sell your house
The Central Bank has set the banks targets for "sustainable solutions". The CB considers that your mortgage is unsustainable because you can't repay the capital within 12 years. So the bank may be forced to repossess.

However, in my opinion, your mortgage is perfectly sustainable

The best solution for you is for the bank to put you on interest only, indefinitely.

You will continue to pay €440 per month for the cost of your accommodation. presumably it would cost you a lot more to rent somewhere similar.

You can continue doing this forever. When you pass on, your children can sell the house and pay off the mortgage.

If your house is repossessed, you will have to rent somewhere. It is much better for you to continue "renting"€120,000 from the bank than renting a property.

Credit Union loan
Why do you have shares of €900 while you have €700 of a loan?
You could be paying around 12% on the loan while getting nothing on the shares.

You should pay off the loan in full immediately to save this waste of money.

Credit Card
You probably should tear up your credit card, if you have not already done so. It is going to be tough for you to keep your house. You probably pay 18% interest on your credit card and it will tempt you to overspend.