I'm insovlent; wife not; home in big negative equity

Discussion in 'Personal Insolvency, bankruptcy, etc' started by peter K, Nov 17, 2016.

  1. peter K

    peter K New Member

    Posts:
    2
    So, here goes.

    We had it all, two well paid jobs, worked hard, lived well. Then she got unfairly dismissed and labour court backed her, and my business died.

    I have a personal liability for a loan of 1 million +. It was a personal loan to buy a commercial building which I rented to a company I formed with my wife. A management buyout. Celtic tiger died and it failed. Bank sold it to vulture funds who appointed a receiver. I gave them the keys at the end of May. Company was wound down and is dormant, no assets except an old 2004 van I am driving.

    Family home is in joint names, but in 150k negative equity. We do not have any assets as such. Her car, paid for with her unfair dismissal payout is in her name. My bank account is in overdraft and I am on social welfare. My wife opened a personal account in her name just in case they closed mine and ours. There is no money available to pay anything else and all accounts are empty.

    I contacted MABS and they advised bankruptcy. I have put this on the long finger for a while but know I will need to do something.

    My understanding is if I file for Bankruptcy, I lose my half of the house and it gets offered to my wife for 5000 euro. I then have to engage with the bankruptcy service and hopefully, in 12 months, I will be discharged.

    Is there any extra liabilities if I come into money in 2, 4, 6, 10 years from now?

    I HAVE read the stickies, the case studies and the like, but it is a bit overwhelming. I am aware there are some big names here, and hope they could possibly guide me.

    Thank you.

    Pete
     
  2. Jim Stafford

    Jim Stafford Frequent Poster

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    298
    Pete

    Whilst everything appears overwhelming at the moment, thousands of similar people in your financial position have reached settlements.

    if your house is in negative equity and if you go bankrupt, you will not lose 50% of the house to the Official Assignee as there is no equity in it. Indeed, you would probably keep the house if you can keep up the mortgage payments.

    If your house was in mortgage arrears as at 1 January 2015 you would qualify for a "no veto" PIA, and possibly have the mortgage liability reduced to the market value of the house.

    In order to do a PIA, you need to have enough income to pay your reasonable living expenses and to cover a reasonable mortgage payment.

    You should ask MABS for a €500 voucher in order to see a PIP in order to receive comprehensive advice on your options.


    Jim Stafford
     
  3. TLO

    TLO Frequent Poster

    Posts:
    142
    Your only income is from social welfare. If you go bankrupt your income would be too low for an Income Payment Agreement to be applied. So once your 12 months of bankruptcy are over you can earn, win, inherit as much money as you like and keep it. Nobody else will have a claim on it.

    You are generally better off sorting things sooner rather than later. The sooner you sort it out, the sooner you can regroup, and start rebuilding your life. Alan Sugar is on record as saying that he went bankrupt twice, presumably early in his career.

    A possibility might be for you to go bankrupt (wiping out the €1m liability) and for your wife to do a "no veto" PIA, as per Jim Stafford above, reducing the mortgage liability to the market value of the house, and reducing mortgage payments in proportion.
     
  4. Bronte

    Bronte Frequent Poster

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    11,917
    Pete it's time you met with a professional. The sooner you do this the sooner you begin to end the nightmare, best of luck.

    ( I presume you know poster Jim Stafford is a well known professional in this area)
     
  5. peter K

    peter K New Member

    Posts:
    2
    Last edited: Nov 17, 2016
    Hi everybody.
    Reading my original post I discovered I had forgotten a detail.

    With all the turmoil, our family home went into arrears with PTSB. We met with them and given the details of our circumstances, the girl politely shook her head in awe and recommended us for an arrangement. We have about half our mortgage warehoused, interest free, and are paying the other half successfully. It is as per agreement without problem.

    This is coming years now and I have attended the debt seminars around and even met a person here. Guess it's time to make an official appointment.

    Any more observations would be greatly appreciated. I am awake here not able to sleep, shaking. My health has crashed and this has to stop, I have 2 kids.
     
    Last edited: Nov 17, 2016
  6. Brendan Burgess

    Brendan Burgess Founder

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    30,973
    You have to see a PIP.

    Contact Abhaile and they will give you a voucher to pay for the PIP's costs:

    Abhaile – the Mortgage Arrears Resolution Service - is available nationwide and can be accessed by calling the MABS Helpline 0761 07 2000, Monday to Friday 9am to 8pm.

    Given that ptsb is facilitating you, you,or your wife, will be able to keep your house whether you go for a PIA or bankruptcy.

    Brendan