Can I go bankrupt in the Isle of Man?

M

MaggieB2

Registered User
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Personal and income details
Net Approximately £3,000 sterling a month
Income history: I've always been employed

Home loan
Lender: EBS
Amount outstanding: 220,000euros approximately
Value of home: 150,000euros
Interest rate: standard variable rate
Monthly repayment 1140euros
Amount in arrears None, but will probably not be able to make next months payments

Summary of discussions and agreements with the bank

I've been contact with MABS. They advised me to go onto MARP


Other loans and creditors -
Credit Card MBNA about 3,000 euros
Credit Union Loan 11,000 euros, 3,500 savings
Family First loan 30,000 euros


How important is retaining the family home to you?

I don't care about keeping the family home.



Any other relevant information

I moved to the Channel Islands two years ago because I realised that I couldn't make my loan repayments otherwise. Unfortunately Guernsey is an expensive place to live. My outgoings are currently about 3,000 euros a month, that's loan repayments, rent and property management fees, that's all. I managed for two years but several things happened at once. Firstly, I was told that the building where my apartment is was not built to the fire standards so until that's sorted out it can't be sold. I've paid out over £3000 euros to the management company for it to be brought up to standard. Then the tenants (the rent didn't meet the mortgage) moved out and now I've major repairs to be made to the apartment itself before I can rent it out again.
I'm now in the position where I'm not going to be able to meet all my repayments.

What is your preferred realistic outcome?

I honestly don't know. I want to be able to meet my obligations but I feel completely trapped.

I've secured a new job in the Isle of Man. The salary is slightly less but I'll pay less tax and the rent will be a lot less. I've been trying to find out information on insolvency legislation in the Isle of Man but I haven't been able to. I'm seriously considering moving to the UK and pursing insolvency but I really don't want to. I've managed to meet my obligations for five years even though I've been stretched.

Any advice would be appreciated.
 
What rent are you getting on the apartment in Ireland?

With a mortgage of €220k, the interest should be around €10,000 a year or €800 a month. The gap between the rental income and the interest paid should be very small.

So you should ask EBS to switch you to interest-only. If they refuse, just go interest-only anyway. This will save you about €300 a month.

If you can't manage the interest-only, then pay what you can afford. It's unlikely that EBS will repossess while you are paying most of the interest. But they might.

I don't think you are insolvent. So I doubt if the Isle of Man insolvency legislation would help you.

If there is some help from the IoM legislation, then you can have a much tougher discussion with EBS. You should be able to deal outside the insolvency legislation. For example, agree to sell the house in an orderly manner. You accept responsiblity for the shortfall, but you agree in writing that when you pay off 10% of it, they write off the balance. They might go for it if they believe that you intend going bankrupt in the IoM.
 
I would agree with Brendan that matters are not that bad-solvency wise. Not sure there is anything in MARP for you as it's now a buy to let property.

If you are renting it out long term-please make sure you are no longer claiming TRS and that you are registered with the PTRB. You also should tell the EBS that you have it rented or intend to rent it out.

You should tell the EBS of the problems you have had re the fire cert remedial works and the repairs etc which has impacted on your cash reserves and ability to rent it out. This is making it hard to make my payments and request a period of reduced payments. Put that in writing to them and go Interest only anyway or slightly more if you can pay that.
 
Thanks for the advice. I was getting 825euros rent for the apartment. I realise that I'm panicking a bit and I'm a lot better off than most. I contacted the EBS and the tax man when I started renting it out, and I'm registered with the PTRB. The tax man has allowed me to keep part of the TRS for the first two years but I'm going to go and see them when I get home. I don't want a big tax bill on top of everything else.

What I should have mentioned as well is that the reason I have a good salary is because I'm a night worker but my current job wants me back on days. This means my pay will drop by several hundred, I'm not sure how much. The new job is only day work but at least I won't be paying as much rent. I would at some stage like to come back to Ireland but I don't see how that'll be possible for at least another few years.
 
As IOM is not part of the EU, are Irish banks able to chase a debt off someone who is ordinarily resident there?

Would it give another string to your bow to pay the debt back on your terms, safe in the knowledge that if EBS don't like it, they can't take legal action, similarly to if you are in the Middle East, Australia or Canada?
 
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