Hey Sandman
You probably know that Ireland's Personal Insolvency Bill is currently passing its way through the houses of the Oireachtas. It is due to be signed into law in the coming months. I believe that this new law will provide a solution for someone like you.
If I was acting as your Personal Insolvency Practitioner under the new law,
Most likely I would be encouraging you to follow the Personal Insolvency Arrangements (PIA) route. Basically you would be making a proposal or arrangement with your creditors to sort out your debt over a five or six year period. At the end of the period, Its very likely that some of your legacy debt would be written off
More specifically in your case, It would appear that the mortgage on your
personal home is actually quite sustainable. The 1st priority would be to protect that. I would be proposing as part of the overall PIA arrangement that the mortgage on your PPR would be put on an interest only basis for the next five years. So based on an outstanding mortgage of 130,000, you would be paying back around 430 euro per month for this
Clearly the big structural deficit is with your investment properties
and I would urge you to start discussing with your bank immediately about either surrendering these properties to the bank or getting them to agree to sell them.
Even after you sell the investment properties, there will be a negative equity figure of approximately 450,000 to deal with. On top of this you need to add the overdraft, the car loan and any arrears which will bring the total to lets say, 475000 in total
I would be inclined to propose to the bank that you would repay say 2000 euro per month against the 475000 for five years. After five years has elapsed you will have paid back 120000. which will still leave a deficit of 355000 still owing to the bank. Out of this 355000, I would then agree to have 100,000 additional mortgage placed on my PPR, which will leave 255000 that the bank will have to write off !! Your new mortgage at that stage will be 230,000 which you will start paying back interest and capital and you wont have any other debts.
When the bank are looking at your situation they will be trying to compare their loss 1) if you enter bankruptcy and 2) if you enter a PIA
If you enter bankruptcy the situation will be as follows :
Your house will be sold and the bank will realise 150000 on that
Your investment properties will be sold and they will lose 450000 on those
Writing off your overdraft, car loan and arrears they ill lose another 25000
The total loss to the bank on bankruptcy will be 325000
If you go the PIA route as set out above
The bank will only have to write off 255000 and you will get to keep your house.
Its hard to see in this example why the bank would not be willing to accept such a proposal under the PIA arrangements. It means that
they will manage to retrieve more of the debt than they would under bankruptcy and that certainly will be their main objective
Im sorry that this is so long winded and intricate but it might give you some sense of where you could get to with this. Don't take the figures too seriously. I obviously don't know enough about your situation to be sure that this is the exact solution for your particular case. It really just something for you to think about