A professional needs to keep a house befitting his/her professional status?: liveline

T McGibney said:
I presume that isn't an attack on me? :eek:

In any case, perhaps you might please clarify it, as Jim Stafford is not a tax specialist and I've never heard of him making public comments in relation to tax rates.
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It's not an attack on anybody. Your explanation of the role of the advocate professional advisor was not just about Jim Stafford, but was relevant for the entire profession of advocate professional advisors.

Brendan Burgess said:
You can make the same argument that it is "unfair" for "ordinary" people to want to keep their family home if they can't afford the repayments. Especially as any concessions such as split mortgages, or extensions of cheap trackers will come at the expense of shareholders and taxpayers.

I don't think it's "unfair" to try to get the best possible deal for your client, whether that is MABS acting for someone with a €100k mortgage or Jim Stafford arguing for someone with a €1m mortgage.
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My point isn't about the fairness or otherwise of whether the debtor gets to keep his home. It is not about 'getting the best possible deal' for the debtor.

My point was about the ethical basis of 'getting the best possible deal' for the debtor. If the basis for the 'best possible deal' is misleading future clients of the debtor about his financial stability by helping him to retain a house that he can't afford, then there surely is an ethical issue here.

If a MABS advisor enabled his debtor to retain a house by misleading the lendor about the future income of the debtor, there would be a similar ethical issue here.
 
RainyDay said:
It's not an attack on anybody. Your explanation of the role of the advocate professional advisor was not just about Jim Stafford, but was relevant for the entire profession of advocate professional advisors.
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...and also to the industry of quango and union advocates and lobbyists that dominate Irish public discourse, which I presume you equally disregard on the basis of their naked vested interests.
 
Brendan Burgess said:
which is just another way of saying... "Whether a debtor gets to retain his family home is wholly dependent on the creditors. The same rules apply to trophy houses as they do to one bedroom apartments."
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In which case I suppose the only thing we can accuse Jim Stafford of is encouraging his clients' delusions of grandeur. I can't see too many banks agreeing that a debtor needs a trophy house befitting their professional status if it involves large debt write downs.
 
dub_nerd said:
I can't see too many banks agreeing that a debtor needs a trophy house befitting their professional status if it involves large debt write downs.
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In practice, banks rarely require people to leave their family home, whether it is a €100k home or a €1m home.

Most borrowers living in trophy homes will have other assets and liabilties which dwarf the value of the family home and the debt associated with it. The lenders will do an overall deal which leaves the borrower in the family home. In some cases, instead of writing off debt, they will transfer the shortfall on another mortgage to the family home.
 
Brendan Burgess said:
In practice, banks rarely require people to leave their family home, whether it is a €100k home or a €1m home.

Most borrowers living in trophy homes will have other assets and liabilties which dwarf the value of the family home and the debt associated with it. The lenders will do an overall deal which leaves the borrower in the family home. In some cases, instead of writing off debt, they will transfer the shortfall on another mortgage to the family home.
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There are quite a number of borrowers living in trophy homes which are already in serious negative equity so what would be achieved by piling on the shortfall of other properties to this family home. I cannot see how the bank would see this as a solution to their problem. I do think that people living in trophy homes should have to downsize in order to make their debt more sustainable. After all why should the plebs subsidise the trophy home. There is no sustainable argument for it. Yes the people involved may lose a bit of face. So what.
 
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I know a local GP doctor, good professional, living in a private 5 bed home. The cost of selling it and trading down to a four bed semi in a housing estate would realise such little profit that when that and the associated costs of sale, auctioneer, solicitor, engineer etc were all calculated it made more sense to stay put. Only later did she realise that a lot of her business was around the fact that people knew where she lived, would ring at the weekend or show up at her door. I would like to think that Jm Stafford expressed himself badly. The maintaining of the family home is probably the keenest issue in everyone's debt problem. Some will be happy to see the back of it and others will do anything to hang on. It really is a case by case basis. The resolution of the issue of keeping the family home in each case will be lead by the client, not the PIP, perhaps he was expressing, albeit badly, what he has experienced from the clients he has met to date. Incidentally my GP friend sold her privately owned "clinic" building and rents a new smaller two room clinic nearby.
 
Dermot said:
..... I do think that people living in trophy homes should have to downsize in order to make their debt more sustainable. After all why should the plebs subsidise the trophy home. There is no sustainable argument for it. Yes the people involved may lose a bit of face. So what.
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Simply not happening unfortunately, the big houses are being kept after deals are struck with banks. Some high profile examples of this.

Even some of the developers in NAMA (those draawing down 150k+ salaries) have kept their kids in private schools.

That's how we roll in this fair Republic of ours!
 
Hi Dermot

If a borrower has a very good income e.g. €300k and they are in €2m negative equity between a home worth €1m and investment properties. They sell the investment properties and end up with borrowings of €3m on a property worth €1m.

If they really want to retain their home, they will end up working for years and paying over most of their income for the privilege.

I think that they would be better giving up their home, but many people feel funny about their home and will suffer massive negative equity for years to stay in it.
 
Brendan. I know that the figures you quoted are only an example for the point you are making but at the same time there would be quite a number of people with similar ratios of income to borrowings in the trophy home class.
The reality of the situation in the example you give is that this would represent a debt of 10 times gross income and possibly 19 to 20 times net income which is not sustainable and is going to lead to the house having to be sold after further losses to the bank/taxpayer.
I am not a begrudger but all classes in society have to take some pain for their mistakes.
The person with a €300,000.00 income has a much better chance of getting back up the property ladder even from the bottom than the person on €30,000.00
 
Chances are the lad on 30 k with very little to offer the creditors will not even be allowed a PIA and will have to fend for himself.
 
well, it's good to see that Jim has some support from within the 'establishment'.
David Hall, who must now be renting a room in Montrose, was on with the 4hr a week 492k a year star Marian Finucane earlier....and both agreed that Jim was telling "the truth" about the great and the good being allowed to keep the big houses
 
Cantalia said:
I know a local GP doctor, good professional, living in a private 5 bed home. The cost of selling it and trading down to a four bed semi in a housing estate would realise such little profit that when that and the associated costs of sale, auctioneer, solicitor, engineer etc were all calculated it made more sense to stay put. Only later did she realise that a lot of her business was around the fact that people knew where she lived, would ring at the weekend or show up at her door.
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Maybe this is a Dublin/rural thing, but in Dublin, any GP I know makes huge efforts to AVOID business coming to their house. When they're in the house, they are off duty, and aren't looking for work. If you want a doctor, go to the surgery during business hours. If you have an emergency, go to A&E or call out the locum.

No-one chooses their doctor based on the size or location of their house.
 
Certainly untrue for my neck of the woods.
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Remember Jim clarified that by professional he meant "high income".

If you're far enough away from the major population centers then you'll find that the trophy house will have cost a couple hundred thousand more than it should have. A genuinely high income person will be able to absorb that level of disappointment.

To get into trouble a high income person would have needed to buy in one the most expensive locations. The most expensive locations are city areas, in city areas in general clients won't know or care where the professional/high income person lives.
 
I live in a smallish country town .

I have absolutely no idea where my current doctor or current solicitor live. I don't know where my hairdresser or dentist or tai chi teacher or yoga teacher live.

My Yoga teacher is a GP.

Evidently, they don't live over their respective office premises.

None of them are Ordinary PAYE workers (like myself)

Should I be worried that I don't know this vital (?) information on where they live?


Curious Marion
 
Marion said:
Should I be worried that I don't know this vital (?) information on where they live?
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I have two ongoing professionals, one lives in a modest enough house, from which business is transacted, I've no idea of his income/wealth/status or car size nor do I care. the other professional, I know the street where he lives, and it's upmarket, that's all I know about that, no idea of house size etc. And he's up to his neck in debt.

I do business with both of them because they are extremely professional, better than anything you'd find in D4 or the big firms, in my opinion. I have a one on one relationship with someone who is competent and who gives me great advice.

Some people in Dublin live in some kind of bubble, including Jim Stafford. His apology was nonsense, he could not back track on what he originally said, but sadly he meant it. But at least it's given us a window on this rarified world. They can keep it. I guess the type of clients he's seeking to attract are delusional people like the notorious Killeny couple (of the tent varity) last year. But the banks saw to them. So for once praise from me to the bankers and I hope they and the advertisment Jim has given to the sitation will make the insolvency service buck up a bit. It reminded me so much of the Killeny couple because they too insisted on staying in their trophy home, and Jim has mentioned his clients expect him to manage this for them. Time will tell on this.
 
I don't think that the Killiney couple is a fair comparison. They were straigtforward strategic defaulter who had not paid anything on their home loan while owning lots of properties. I suppose if a solicitor had represented them in Court, he would have put forward arguments on their behalves, but any solicitor or insolvency advisor would have simply told them to pay their mortgage.

Jim was not suggesting that a solicitor needed to live in a trophy home and not pay for it.
 
Brendan Burgess said:
Jim was not suggesting that a solicitor needed to live in a trophy home and not pay for it.
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No he's not suggesting that, he's suggesting that other taxpayers subsidise them and their bad financial decisions. That's it plain and simple.

I have no problem with debt write down, where the person cannot afford their loans, no problem with keeping people in modest homes where the alternative doesn't make social or financial sense. But allowing someone live in a mansion just because of their 'professional' 'status' which means less of their income will go to pay off their debts sounds cuckoo. The only time it would do so is if the person threatened UK bankruptcy. Not too many Irish solicitors, barristers, consultants and accountants have that nuclear option.

Nobody has said anything about the converse situation. What about the couple with 3 kids in a 2 bed apartment that is not suitable for their needs. And we all know Irish 2 beds is actually a 1.5 bed with zero storage space. There are many people stuck in these, who cannot afford their mortgage and cannot afford to move and now cannot afford the new insolvency regime.

The whole thing stinks from top to bottom. How on earth did we end up with once again the most ill thought out insolvency regime, that gives no proper end date, no hope, possibility of 20 years on the hook, and is too costly for ordinary people.
 
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