Walking away from debt

[orka]

Gekko, what sort of help do you think should be given and to what categories of people?

BTW, I don't agree that people who bought family homes at the height of the boom are the most in need of help. Unless their income has changed drastically, the value of their home (and negative equity) shouldn't matter to them if its going to be their family home for 30-40 years. It's those who bought shoebox apartments, possibly miles from work and family 'to get on the ladder', and who now want to have a family (or have already had a baby or two) that I feel sorriest for. (And indeed, the pyrite house purchasers you mention above).

 

[csirl]

Irish courts have no jurisdiction on a bankruptcy declared and discharged in another state - proving your COMI is integral to show that you are now a taxable person in that jurisdiction. Depending on the individual merits of the case, a person may be able to return to Ireland in one year or less with the bankruptcy discharged, and as hard as it may be to imagine, no court or creditor in Ireland can do anything about it.#

It's a fairly common practice now, not only from Irish people going to the UK, German citizens would also do this in numbers, as would any country's citizens within the EU, where bankruptcy legislation in the respective country could be considered 'draconian'

w w w . f r o s t . i e

I'd be inclined to think that the Irish lender would probably proceed with their claim in the Irish courts and would probably obtain a default judgement (due to absence of the borrower) which would be enforced in Ireland, and abroad where possible, regardless of what the borrower did in the UK. I'm not sure that the law in the UK is clear cut enough that their bankruptcy applies to Irish debts incurred by a borrower who was permanently resident in Ireland at the time the debts occured. I'm fairly sure that you'd have to stay out of Ireland for a very very long time - essentially have to emigrate permanently with little chance of ever returning - which is a very high price to pay. And always with the risk that the Irish bank may decide to start proceedings in the UK if it feels that it would be worthwhile and that the bankruptcy rules were being abused.

 

[Gekko]

Gekko, what sort of help do you think should be given and to what categories of people?

This is the $64,000 (or perhaps €64 billion) question.

In my view, the "moral hazard" argument should be disregarded. It's just pious pseudo intellectual justification for doing nothing.

If debt is sustainable, nothing needs to be done (e.g. a family in negative equity with a suitable home and income capable of servicing the mortgage).

If debt is unsustainable, something has to be done (e.g. a family in negative equity with a suitable home and income incapable of servicing the mortgage). Perhaps the State or the lender should take ownership of a portion of the property up to a level at which the family's repayments would become sustainable?

If debt is causing other social issues (e.g. preventing people from starting families) then something should be done. Perhaps negative equity portability, NAMA financed property swaps, debt forgiveness or partial State or lender ownership should be considered?

The fact that the problem is difficult to deal with in an appropriate manner doesn't excuse avoiding it.

In my view some form of commercially minded quango should be established to identify the legitimate cases and deal with them.

 

[frostie]

I'd be inclined to think that the Irish lender would probably proceed with their claim in the Irish courts and would probably obtain a default judgement (due to absence of the borrower) which would be enforced in Ireland, and abroad where possible, regardless of what the borrower did in the UK. I'm not sure that the law in the UK is clear cut enough that their bankruptcy applies to Irish debts incurred by a borrower who was permanently resident in Ireland at the time the debts occured. I'm fairly sure that you'd have to stay out of Ireland for a very very long time - essentially have to emigrate permanently with little chance of ever returning - which is a very high price to pay. And always with the risk that the Irish bank may decide to start proceedings in the UK if it feels that it would be worthwhile and that the bankruptcy rules were being abused.

It actually operates according to EU law, and it is happening on a regular basis. It is nothing new or theoretical, it's one thing getting a judgement, a bankruptcy is something completely different. Because of the legislative differences relating to the discharge of a bankrupt in both jurisdictions, it is easy to get the wires crossed about how the bankrupt is actually discharged. Every aspect of the law in the UK relating to bankruptcy is more relaxed than in Ireland, which is why bankruptcy tourism is so appealing. If it were the other way around, you would be right about the difficulties due to the term of bankruptcy, and conditions of discharge in Ireland.

 

[Raskolnikov]

Yes THEY borrowed the money to purchase the property and THE BANK lent the money to the borrower.

Yep, people seem to forget this. The bank took a risk with their capital to lend money to people with the expectation of a profitable return. If the banks exercises poor judgment, they should shoulder the losses. This is how the banking system has always worked.

 

[Complainer]

As you can see from the above posts, I've always been referring to "home related debt". It was you that alluded to more traditional property speculators.

It was quite unclear to me that your claim related to home-related debt over a limited time period, as opposed to the broad general nature of your claim as you wrote it.

Like it or not, historically we've had a culture of home ownership in this country. Purely for chronological reasons, a large group of people have been devastated by the collapse in property prices. Had they been a little older or a little younger, they wouldn't have been. Luck has played a big part in this. I won't get any help but I acknowledge that we should do something to help such people. I agree that property speculators (e.g. people who invested in property other than their PPR) don't deserve similar levels of assistance.

You are overplaying the 'luck' factor. I know of two young couple who purchased property during the boom years and are now in negative equity - one an apartment and one a duplex. Both took a fairly cautious approach - one guy specifically said to me that they chose a property that they could still continue to pay the mortgage of one or other lost their job or had to give up work for family reasons. Both are continuing their lives without any 'utter devestation'. The apartment owner have rented their apartment out to Dublin City Council under the RAS scheme while renting another property for themselves and planning a self-build. The townhouse owners are continuing to pay their -ve equity mortgage without any major difficulty.

It's not just about luck - those who were cautious have minimised the impact of the property crash for themselves.

 

[JoeB]

It's our government to blame, in my opinion.

Of course the banks displayed incredibly poor judgement, in relation to mortgages. (But they did sell their own property, didn't they, and lease it back?). So of course the banks should have gone bust, and been allowed to do so. ragardless of the consequences.

But the banks were facialited by the Fin. Reg. who was asleep at his post. He is part of the government, so ultimatally the blame lies at Fianna Fail's door. (They even have 'fail' in their name!)



Of course private banks will break the law if allowed to do so. But they haven't broken laws,.. they broke guidelines. The governments fault again, that they issued guidelines, instead of laws. (Is a single person in prison for financial mismanagement?)


The government failed again by bailing out the banks.. they should have taken a stronger stance and allowed the banks to fail, even if that destroyed out economy (in the short term). (they could have created a credible government bank, as opposed to zombie banks dragging it out for years)


Now we have a situation where everybody wants to be bailed out, and those who were cautious don't want to pay any more taxes to see them wasted. The balck economy is rampant.. as our government appears incompetent, and so what's the point in paying taxes to semi-criminals, who will either waste it, or enrich themselves? (That's an opinion)


The country is destroyed, and I'd happily cede sovereignty to the Germans, .. at least we'd be rid of the Healey Rays and their ilk.

I'd also happily cede soveriegnity to a monkey throwing darts at policy documents hung on the wall by civil servents. Why don't we try the dart throwing monkey approach?, could it be worse?

 

[Steve Thatcher]

The bankruptcy option

Hello I am new to your forum. I am a UK based debt advisor, who now spends a fair bit of his time helping Irish citizens understand out English bankruptcy laws. If anyone has any questions I am happy to give you free advice. There is much confusion about how a UK bankrupcty affects you in Eire, I will try to post relevent replies on the threads that I can pick out.

 

[Steve Thatcher]

Im in the same boat , I would suggest getting professional advise here.But i cant find anybody working in this area day in day out ....who can give practical advise ..

Please pass on any details if you find such a person.

Hello on the edge. I am happy to give you and anybody else some free advice if it would help you.

Steve

 

[jackbetal]

I agree that property speculators (e.g. people who
invested in property other than their PPR) don't deserve similar levels of
assistance.

Whilst the majority of what you say I agree with I cannot agree with
this. You cannot have a blanket ruling where by it is PPR's only. I have no
doubt that the majority of those who did purchase a second property did so
for pension purposes only. Just because begrudgers like this lad
"Complainer" want to create this false impression of that groups as greedy
big car driving, 6 holiday a tear type of gluten then no need for you to
follow. Even if you do want to do it for PPrs only how do you sort out the
situation where the people with additional properties have them stacked up
against their PPRs?

I know of two young couple who purchased property during the boom years and
are now in negative equity - one an apartment and one a duplex. Both took a
fairly cautious approach - one guy specifically said to me that they chose
a property that they could still continue to pay the mortgage of one or
other lost their job or had to give up work for family reasons. Both are
continuing their lives without any 'utter devestation'. The apartment owner
have rented their apartment out to Dublin City Council under the RAS scheme
while renting another property for themselves and planning a self-build.
The townhouse owners are continuing to pay their -ve equity mortgage
without any major difficulty.

It's not just about luck - those who were cautious have minimised the
impact of the property crash for themselves.

And you base your whole opinion on knowing "two young people". It is nice
that the frugality of these two young people have saved them somewhat from
the wrath of this corruptly caused Irish recession. But I am full sure that
they were not being careful in case the Irish economy totally collapsed due
to incompetence and corruption.

It's our government to blame, in my opinion.

Of course the banks displayed incredibly poor judgement, in relation to
mortgages. (But they did sell their own property, didn't they, and lease it
back?). So of course the banks should have gone bust, and been allowed to
do so. ragardless of the consequences.

But the banks were facialited by the Fin. Reg. who was asleep at his post.
He is part of the government, so ultimatally the blame lies at Fianna
Fail's door. (They even have 'fail' in their name!)



Of course private banks will break the law if allowed to do so. But they
haven't broken laws,.. they broke guidelines. The governments fault again,
that they issued guidelines, instead of laws. (Is a single person in prison
for financial mismanagement?)


The government failed again by bailing out the banks.. they should have
taken a stronger stance and allowed the banks to fail, even if that
destroyed out economy (in the short term). (they could have created a
credible government bank, as opposed to zombie banks dragging it out for
years)


Now we have a situation where everybody wants to be bailed out, and those
who were cautious don't want to pay any more taxes to see them wasted. The
balck economy is rampant.. as our government appears incompetent, and so
what's the point in paying taxes to semi-criminals, who will either waste
it, or enrich themselves? (That's an opinion)


The country is destroyed, and I'd happily cede sovereignty to the
Germans, .. at least we'd be rid of the Healey Rays and their ilk.

I'd also happily cede soveriegnity to a monkey throwing darts at policy
documents hung on the wall by civil servents. Why don't we try the dart
throwing monkey approach?, could it be worse?

A lot of reality spoken here. Pity you will be labelled a left wing nut by
the begrudgers in this country. As ceding sovereignty to the dart playing
monkey though I don't know. I thought that is what we had all along.

 

[RabHab]

Another way?

Hi all,

Sorry im reading this post late. I also find myself in a similar situation to many of you. I was young and naive but worst of all was allowed to buy a house which i simply should not have been given a mortgage for. Yes i now find myself in negative equity on an interest only tracker.

I did read a book recently called "Blank of Ireland this way out" and although it seems a little mad there may be something in it. It may offer another way for people who find themselves in a situation so bad that there doesnt seem to be any other oprion. If you type the book into google you can read it online for free. It seems that the same people who wrote the book are also doing a tour (freedom bus tour i think) which is currently travelling around Ireland offering people free advice and solutions. Might be woth giving it a go.

I think if enough of us stand up against this injustice the gov will have no choice but to listen. After all this is meant to be a democracy and if so we have the power!

 

[Bronte]

Hello on the edge. I am happy to give you and anybody else some free advice if it would help you.

Steve

Hi Steve, do you belong to one of those UK based debt consolidation or debt dealing agencies?

 

[Steve Thatcher]

Hi Steve, do you belong to one of those UK based debt consolidation or debt dealing agencies?

I am a qualified solicitor, but I no longer practice. I did twenty years in law firms before I set up my own debt advice agency. I spend my working time taking people through the bankrupcty process here in England.

[broken link removed]

 

[Bronte]

Thanks Steve.

Have you helped Irish people through bankruptcy? How much do you charge. There is nothing free. Is it a percentage? Or a set fee.

(you obviously don't have to answer my questions if you don't wish to)