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

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gaius

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From Liveline.
It's at 1hr 21min 50secs

As said above, a professional (and he specifically mentions a solicitor) should be allowed keep a palatial house as this befits his/her standing in society and sends out the signal to neighbours and clients about who they are, thus allowing them to continue to earn a living.
They need a bigger house than a PAYE worker.
"Really?" said Mary Wilson, "even if they are insolvent?".
Yes said the speaker...the bigger house is in line with their standing in society and he will argue this point with the insolvency board as being a totally legitimate viewpoint.

Is this the level of public discourse we can expect on the matter?
 
Gaius;
I hope not. That said , to EVEN suggest that someones standing in society should impact on a {palatial} house proves how in this Financial Tsunami the old pals social network still believe they are {entitled} .
And worse he may get away with it !
 
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Mary Wilson (reading a listener email): What happens to my home if I enter into a PIA?

Jim Stafford: Well, under the legislation the PIP is to try and keep the family in their family home if at all possible. The PIP will have to assess the existing mortgage on the family home, if it's a modest house, if it's a trophy house.

In practice, the PIP will also have to assess the type of house that might be needed for a professional person such as a solicitor, accountant or a hospital consultant as opposed to a house that's needed by someone who is in the PAYE sector for example, so that, as a PIP, I would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society so that his neighbours and clients can see that, yes, this person is a good solicitor who's is living in a good house etc. etc.

MW: Really?

JS: Absolutely. The same as for hospital consultants, people like that

MW: Despite the fact that he's insolvent?

JS: Despite the fact that he's insolvent, because remember, if we want the solicitor to continue to earn money or the accountant or the hospital consultant it's important that he has his tools of trade for example

MW: Well, he may need an office, but he hardly needs a palatial house in South County Dublin

JS: Believe me, the clients who we have on our books are insisting they continue to stay in their palatial houses, now, it's possible that some of them might have to down trade, but that all goes into the pot and at the end of the day the banks, the creditors have to agree to that process.
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So those of us that borrowed sensibly and are now living in modest houses with expanding families and negative equity should keep working hard to keep certain people in the style to which they have become accustomed.
 
As it is impossible to talk about all of the complexities of personal bankruptcy in a 10 minute radio interview it is inevitable that misunderstandings can arise, and that statements can be taken out of context.

I believe it is clear to many people that the vast majority of people are passionate about retaining their family home: whether it is a trophy house or a one bedroom apartment. For some people, the word "passion" would not be an adequate description of their feelings! The first comment that many insolvent debtors make to us when they meet with us initially is that "we must keep the family home." The depth of the feeling behind that comment is generally the same whether it is expressed by a person who lives in a "trophy" house or a person who lives in a one bedroom apartment.

The commercial reality is that mortgage affordability is dependent on income, and so it follows that the more income you earn, the bigger mortgage you can afford, and therefore a bigger house.

Personal Insolvency Practitioners are obliged to comply with the Personal Insolvency Act 2012. Section 104 of the Act states that a PIP shall "insofar as reasonably practicable" formulate a proposal that does not require the debtor to vacate his family home. In formulating such a proposal, the PIP shall consider factors such as the cost of the house, the debtors income etc.

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.

The commercial reality is that some debtors will generate enough income to retain their home, whether it is a trophy home or a one bedroom apartment. The law is the same for all types of houses.

In some cases, the banks will obtain a better recovery of their monies if they allow a debtor to retain their home, whether it is trophy home or a one bedroom apartment. However, in other cases it will simply not be possible for some people to retain their homes, trophy or not.

In conclusion, the law treats all insolvent debtors equally.
 
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Sorry Jim - here is what you said
the PIP will also have to assess the type of house that might be needed for a professional person such as a solicitor, accountant or a hospital consultant as opposed to a house that's needed by someone who is in the PAYE sector for example, so that, as a PIP, I would be making a very strong case, for example, that a solicitor should have a bigger house that accords with his professional status in society so that his neighbours and clients can see that, yes, this person is a good solicitor who's is living in a good house etc. etc
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.

So all other things being equal, you are saying that a mere PAYE worker may lose his home, while his "superior" accountant (or similar) neighbour should be allowed to keep his, by virtue of his social clas
 
I'm sick and I need to see a Consultant.
Is there a list of Consultant Urologists that sorts them by the size of their house?
Obviously by your reasoning here, the bigger house they have, the better they are at their job.
I really wouldn't want one that lives in an apartment he/she would be terrible :rolleyes:
 
while his "superior" accountant (or similar) neighbour should be allowed to keep his
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I got the impression from the now famous interview that a PAYE person shouldn't be a neighbour to the accountant in the first place.

It's be fine if the people listening to these plans were likely to laugh at this snobbery, but unfortunately they're likely to be sympathetic 'faintly dim former rugby playing' bankers.
 
That would be indeed a very extreme interpretation of the legislation and I would love to hear about real life examples where creditors have bowed to that interpretation. I dont think its going to happen folks.
I'm really surprised that Jim Stafford came out with that.

The legislation also clearly specifies that other things need to be taken into account when determining if the debtor can retain their home and I quote the legislation as follows :
"the reasonable living accomodation needs of the debtor and his or her dependants and having regards to those needs the costs of alternative accomodation (including the costs which would necessarily be incurred in obtaining such accomodation)"

My interpretation of the legislation is that the debtor should be facilitated in remaining in their PPR as long as the cost of remaining living in the PPR is reasonable in light of the debtors living accomodation needs and as long as the cost of remaining living there is reasonable when compared with alternative living accomodation which might also be considered reasonable to meet the needs

If the debtor is living in a trophy house whose living accomodation needs could reasonably be met by moving to an alternative accomodation that is worth 20% of the former, then my expectation is that the debtor will come under pressure to move.

I dont believe there is anything in this legislation that indicates or hints that certain types of people need to be "preserved" in the status quo to protect their place in society. Anyone making this type of reference is doing so subjectively as there is nothing in the law to back it up. I dont believe that the banks will be pandering to this type of rhetoric either
 
Yes he made a reference that his clients are insisting on staying in their trophy homes and this may be where this comment stems from.

A PIP is a facilitator / negotiator between an individual and lender. The PIP needs to be fair impartial and balanced to both parties in the negotiation.

Where the argument really collapsed for me was when he tried to make a point that the trophy house was necessary to give the impression of a successful "good" professional which in turn would generate more business which would mean that the Debtor would have more money to repay his creditors..............I mean, talk about smoke and mirrors. He also indicated that the trophy house might be considered as part of the "tools of trade" at which point I almost fell off the chair.
 
If he'd said, they needed a larger house because they were running a business from there or had an expensive and specific office set up that would be difficult to transfer, I'd understand, but simply a big house to impress clients... sounds ... quaint. Besides, having their name listed publicly as insolvent surely undermines any impression given by the big house!
 
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As a Personal Insolvency Practitioner, I would just like to say that Jim Stafford's views on trophy houses for professionals is not the same as mine or of other PIPs that I am in contact with.

I would very much welcome Jim Stafford's clarification on this issue. I can only assume that it was a slip up from someone not so familiar with live radio.
 
Dr.Debt said:
As a Personal Insolvency Practitioner, I would just like to say that Jim Stafford's views on trophy houses for professionals is not the same as mine or of other PIPs that I am in contact with.

I would very much welcome Jim Stafford's clarification on this issue. I can only assume that it was a slip up from someone not so familiar with live radio.
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LOL that's no slip up.


I'm a private self employed individual - but not a "professional". I aspire to owning a nice house, but I still think there's not much value out there. Thanks to the likes of Jim Stafford looking after "people like us" there never will be. And to think
Jim has been a member of the Chartered Accountants Ireland Ethics Committee for the past ten years, being the sole representative of Insolvency Practitioners.
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Jim you really need to examine the true meaning of "ethics" - because if you cannot understand the simple concept of fairness then I have doubts I am unable to express on this forum
 
He's tried to explain himself on live line and apparently regrets his clumsy use of words.Im afraid that doesnt cover it. He wouldnt have said it if he didnt believe it.

On the program yesterday evening, the presenter gave him an opportunity to retract the statement but he ploughed on.
 
Jim Stafford said:
Personal Insolvency Practitioners are obliged to comply with the Personal Insolvency Act 2012. Section 104 of the Act states that a PIP shall "insofar as reasonably practicable" formulate a proposal that does not require the debtor to vacate his family home. In formulating such a proposal, the PIP shall consider factors such as the cost of the house, the debtors income etc.
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Just out of interst, does the Act or PIP guidelines (I assume these exist?) make it explicit factors other than cost of house and debtors income? What's covered by that "etc." in the quote above? In particular, the debtor's "professional status"? It seems inconceivable to me that anything like that would be included, which begs the question: is this a common interpretation and will it be applied in practice?
 
When I visit my doctor or solicitor I don't see their houses only the office where they work--they shouldn't keep trophy houses if they can't afford them.
 
(as seen on another forum)

I reckon it's quite disingenuous of Jim to gloss over subsection (2) of part 104 of the law he cites , specifically "the reasonable living accommodation needs of the debtor and his or her dependants and having regard to those needs the cost of alternative accommodation (including the costs which would necessarily be incurred in obtaining such accommodation"

http://www.irishstatutebook.ie/2012/en/act/pub/0044/sec0104.html#sec104
104.— (1) In formulating a proposal for a Personal Insolvency Arrangement a personal insolvency practitioner shall, insofar as reasonably practicable, and having regard to the matters referred to in subsection (2), formulate the proposal on terms that will not require the debtor to—

(a) dispose of an interest in, or

(b) cease to occupy,

all or a part of his or her principal private residence and the personal insolvency practitioner shall consider any appropriate alternatives.

(2) The matters referred to in subsection (1) are—

(a) the costs likely to be incurred by the debtor by remaining in occupation of his or her principal private residence (including rent, mortgage loan repayments, insurance payments, owners’ management company service charges and contributions, taxes or other charges relating to ownership or occupation of the property imposed by or under statute, and necessary maintenance in respect of the principal private residence),

(b) the debtor’s income and other financial circumstances as disclosed in the Prescribed Financial Statement,

(c) the ability of other persons residing with the debtor in the principal private residence to contribute to the costs referred to in subsection (2), and

(d) the reasonable living accommodation needs of the debtor and his or her dependants and having regard to those needs the cost of alternative accommodation (including the costs which would necessarily be incurred in obtaining such accommodation).

(3) Where—

(a) the debtor confirms in writing to the personal insolvency practitioner that the debtor does not wish to remain in occupation of his or her principal private residence, or

(b) the personal insolvency practitioner, has, having discussed the issue with the debtor, formed the opinion that, taking account of the matters referred to in subsection (2), the costs of continuing to reside in the debtor’s principal private residence are disproportionately large,

the personal insolvency practitioner shall not be required to formulate the proposal for a Personal Insolvency Arrangement on terms that will not require the debtor to cease to occupy his or her principal private residence.

(4) A Personal Insolvency Arrangement shall not contain terms providing for a disposal of the debtor’s interest in the principal private residence unless—

(a) the debtor has obtained independent legal advice in relation to such disposal or, having been advised by the personal insolvency practitioner to obtain such legal advice, has declined to do so, and

(b) to the extent that the provisions of the Family Home Protection Act 1976 or the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 apply to the property, all relevant provisions of those Acts are complied with.
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Jim Stafford, would you care to respond?
 
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