Help Negative Equity and arrears

I came across this site while searching for Negative equity and debt.

I am in 15,000 of arrears on my mortgage and approx 120k in negative equity.
I have really had a bad 2 years. I have no money and sold my car ect. Because when I became unemployed I did not know I was entitled to the dole. The funds from the sales of personal items kept me going.

To cut a long story short I recently have got the dole its 188 euro a week and the social have agreed to pay the the interest part of the mortgage. But I have to agree a deal with the bank first in relation to payments. I have no other income than the 188 euro. I plan on taking up self employment via the Back to self employment programme in the future , if I cant get employment before hand.

I have a tracker mortgage at present. I doubt my Income will be anymore than 500 per week in the future. So the loans unsustainable.

If I ask the bank to write off the mortgage to the value of the property at present. In return for giving up the tracker and going on a variable rate. Do you think this would be accepted?
It would reduce the loan to 145k from 265k. My tracker is 1% over the ecb rate. However the reduction to a variable rate would reduce the payments to an amount I could afford, with the assistance from the welfare. It would also allow a sale without a loss .

But most important it would stop the stress pains i am getting in my chest and stop the sleep deprivation.

I appreciate any advice before I approach the bank.

What about going on interest only. That would give you some breathing space until you figure more out.

that would be great. but i would need at least a year or two. would kbc give this to me for 1/2 years?

stress pains said:

the social have agreed to pay the the interest part of the mortgage.

But I have to agree a deal with the bank first in relation to payments.

If I ask the bank to write off the mortgage to the value of the property at present. In return for giving up the tracker and going on a variable rate. Do you think this would be accepted?

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No I do not think a bank will write off your NE in return for you giving up your tracker. We have seen no evidence of that from banks.

You mentioned you need 2 to 3 years. What exactly did you mean by that.

Do you actually want to stay in the house or not, have you made a decision on that. I realise you're stressed, but you will be able to walk away from this if you want to, but you can also string it out for a couple of years if you need to while getting your head together. You have social welfare's agreement to pay the interest only, so if you want you can agree that with your bank. What is the current state of play between you and the bank.

You have not given us a lot of detail. Please try and do the money makeover thread if you want to get more meaningful advice. Have you a family member you can talk to, based on your dole amount it sounds like you are single. Do you have a partner, or a mother or sibling you could talk to. It's really really important that you give your stress an outlet.

I do not think I will get a full time job and be in a position to pay the mortgage in full each mount for at least a year or two. I am re-training at present for a different carer path.

I am single with 2 kids. We split 2 years ago because of all the financial stress. The mortgage is in my name only. I wanted to leave the country and go abroad to work. But if I rent the house. KBC said I will lose the interest relief and my tracker loan.

I bought the property for 350k and paid another approx 20k in stamp duty. I spent 30k on renovations. I had saved really hard before I bought the property and was I in a good job till they went bust.

The total amount I borrowed was 275k over 30 years in 2008. The property is worth 145k now. I think it would be better if I could just agree to sell and we both take the hit. I will lose 125k of savings I invested in the deposit , stamp duty and renovations. They take what ever it sells for.

I cant sleep or concentrate and I a fully stressed. Its effecting not just my health. But it is effecting myself from gaining employment . I am on the verge of a nervous breakdown.

I have called them today and asked to meet with them at their offices. They will have a rep call me. In the meantime another financial statement will be sent out. So I can tell them my situation has changed and I now have 188 euro a week income. They done nothing to help the last time I sent the financial statement in. They just called me every few weeks asking will a payment be made this mount.

Advice appreciated

stress pains said:

It would reduce the loan to 145k from 265k. My tracker is 1% over the ecb rate. However the reduction to a variable rate would reduce the payments to an amount I could afford, with the assistance from the welfare. It would also allow a sale without a loss .

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Are you sure the welfare will still cover your interest if you voluntarily allow the bank to increase the rate? I would be surprised if this was the case.

stress pains said:

I think it would be better if I could just agree to sell and we both take the hit. I will lose 125k of savings I invested in the deposit , stamp duty and renovations. They take what ever it sells for.

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You need to bear in mind that the worst outcome from all this is that they repossess the house and sell it for less than the mortgage, pursue you for the shortfall and you go bankrupt and start over. That sounds a lot like your best outcome, so stop worrying.

stress pains said:

I cant sleep or concentrate and I a fully stressed. Its effecting not just my health. But it is effecting myself from gaining employment . I am on the verge of a nervous breakdown.

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I'm sorry to see that it is affecting you that badly. I would strongly advise that you go and talk to your GP. There is help available.

Thanks mrs vimes,

how long would I be bankrupt for. If it goes down the repo route.

The welfare said they would pay up to 550 euro towards the interest and I would have to contribute 30 euro and the interest relief i receieve would also be deducted.The Interest relief is approx 70 euro. So I will receive approx 450 euro fro them. Meaning I would be able to pay IO.

The interest would be less than their set figure at present (on the tracker).So the welfare have agreed to pay this. However I need a one year agreement put in place with KBC first.

I do feel its just prolonging the inevitable going down this IO route. I think it be better for all parties to agree a sale or a write off to its current value. I could rent it or sell it, if they agreed to a write off in return for a variable rate loan at the current value.

I know I sound like someone who wants something for nothing. But I do not really see any other options. I was going to hand back the keys. But I have been told by a friend this is the worst thing to do.

I think it be better for all parties to agree a sale or a write off to its current value. I could rent it or sell it, if they agreed to a write off in return for a variable rate loan at the current value.

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There is no evidence they are doing that-or would do it. There is actually nothing in it for them-they would prefer you to keep paying them. If you go the bankruptcy route, the loan will be written off, you will loose the house and negative eguity, but in return have the chance to start over. Surely thats better than staying in the current situation?

Please also go to your GP-stress is not something to ignore.

thank you for the responses. I will try sort out the mortgage interest relief with the welfare and just allow the bankrupcy take its course.

Id rather start the bankrupcy procedures now rather than later. Can anybody advice how I start the bankrupcy procedures.

Hello Stress pains, you are in the right place here so that a good start. There are very good threads on the bankruptcy so read them all carefully. You will get through this in time and you will start again. The advice to seek help with stress in very important. You must keep your health up to be able to deal with all the paperwork, being depressed will only hinder you. You are not alone, remember that, you are not alone.

stress pains said:

I do feel its just prolonging the inevitable going down this IO route.

I think it be better for all parties to agree a sale or a write off to its current value. I could rent it or sell it, if they agreed to a write off in return for a variable rate loan at the current value.

I was going to hand back the keys. But I have been told by a friend this is the worst thing to do.

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I agree that you are prolonging the inevitable by going down the IO route. And you'd only be suiting the bank who haven't the time to deal with everybody. But there is one advantage to the IO route, it might be a better house than you would get if you were renting, and renting on the dole comes with restrictions. Would you be better off in this house, with the stress, or renting and owing the bank zero?

Handing back the keys in return for the bank, in writing, not pursuing you for the shortfall, would that relieve your stress?

If you are going to meet with the bank, you should have someone with you. Just to give you confidence. Why not prepare all the options on paper, and have questions you might like to ask them. Take your time and note their answers. It will give you a sense of control over your situation. In addition, it will help you in deciding what is the right course of action for you. This might not be the best for the bank, but that's not your problem, you must concentrate on what's best for you.

For bankruptcy, you have to apply for it. Not sure you're up to this at the moment and you'll need some money for it. It lasts about 3 years, but it's new so we don't have full details yet.

Thanks for all the replies. I have read a lot of threads on this site and it has been of great benefit to myself.

If it takes 3 years to come out the other side of bankrupcy. That will be my best option. That is approx 40k a year of debt wrote off while going through that process . I would not earn 40k a year at present or in the foreseeable future. Ill keep an eye on this site for more updates. In the meantime i will arrange the IO option.

Once again. thanks to all for the replies.

stress pains said:

. I have read a lot of threads on this site and it has been of great benefit to myself.

.

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That's excellent news and good to know you've made a decision. Hope you're feeling a lot better.