Bankruptcy-an option for me?

L

Libra

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I currently own two properties in Dublin. Both are rented out. The monthly repayments are €3,700 in total and I receive €2,300 in rent. I'm living with my wife in her property (2 bed apt). I'm earning €4,500 a month after tax. I currently discharge the mortgage on my wifes apt (our family home) as her business hasn't been great for a few months and she hasn't earned anything. This is €1300 a month, along with all of our living expenses. As you can tell, things are very tight and we're sinking into debt. My wife is currently pregnant with our first child but we're at our wits end with our financial situation. My wife's income is likely to be sporadic over the next few years. The negative equity on my two properties amount to around €210,000. I think the best option for our futures is me declaring bankruptcy. However, we won't be able to live in the 2 bed apartment forever so we're concerned about our future housing. Please can somebody advise?...
 
I'm not sure that you're a prime candidate for bankruptcy.

If you go bankrupt you will have your debts wiped out however with your level of salary you can expect to be paying in the region of 1500 per month to the Official Assignee for the next five years. You will still be living very frugally.

I'm not sure that you would qualify for a formal insolvency arrangement either. To qualify you will need to be cash flow insolvent and based on the figures provided, I'm not sure that you are.

I would urge you to take advice and look into the possibility of an informal arrangement with your creditors.

No easy options, I'm afraid.The higher the salary, the fewer options that are available to you.....
 
Payment orders are for five years in Ireland, three years in UK

Automatic discharge from Bankruptcy is three years in Ireland, one year in UK
 
Thanks for that clarification. Perhaps if I voluntarily surrender the properties and offer to may something like 10% of the balance as full and final settlement? Do you think they might go for that if the other option is bankruptcy? While I do have a good job at present I'm in a very shaky industry and I could be made redundant in the morning.
 
Hi there Libra. Have you considered going to Scotland to bankrupt yourself? The process takes much less time and hassle than either the Irish or UK (England/ Wales) systems. I have taken the Scottish route and am delighted to say that all is going to plan. I am now well on the way through my 12 month bankruptcy period and am counting the days until I can get my life back.

I have written a blog on the process, hopefully you will find it of use regardless of which route you choose. From what you say, doing nothing is not an option so it's therefore a matter of choosing which route you go. Good luck with it.

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Income 4500 + 2300 = 6800
Rental mortgage = 3700
Apartment mortgage = 1300
Balance 1800

How much is it costing you both to live? If her business is making no money would she not be better off giving it up?

What is the value of her apartment. Would you both be better off walking away from her property, letting her go insolvent, and you both living in one of your properties?
 
The business makes money sporadically at the moment and has good long term prospects. Plus, bankruptcy for her would have implications professionally. Her apartment is on a very low tracker and her parents are guarantors.
 
Libra said:
. Her apartment is on a very low tracker and her parents are guarantors.
Click to expand...

You see this is very important imformation that you left out, people need to put all their cards on the table.

How about you give us the value of her mortgage, the NE your living costs etc. From what you've posted so far it looks to me like you can afford your debts, but you'd rather not.

Also can you give for each of your properties the details separately. Plus the actual costs of them. Size as well. Are you tax compliant would also be important to know.

I'm surprised at the low rent to mortgage in Dublin. Plus rents have apparently been really rising there, have you room for improvement on that?
 
I don't think you would be accepted for bankruptcy. You are not bankrupt, you have property in NE. You have the mortgage being paid on all your properties and still have a considerable amount to live on.
You need to contact a PIP and give them your financial details. If they think bankruptcy is the best option for you they will provide you with a letter stating the same. You will need this letter to proceed with the bankruptcy as the examiners office will not accept your petition without it.
 
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