Loans that we cannot repay

Hi Coleman,

First of all, I am surprised no one has mentioned the option of offering the properties back to the bank. I would recommend the following steps.

Advise all lenders that you are not in a position to repay their debts, which I guess they already know.

Tell them, that you will either offer them possession of the properties for sale or agree with them that you place them on the market with their agreement. The advantage of this for the bank is that they avoid court and associated time and costs.

Negotiate with them, what their final position is, i.e. we will sell the house and pay you, over 20 years, €10k each (€20k in total).

In relation to the credit card and personal loans, I would again offer them an unopposed judgement or a settlement figure of 50% of the outstanding debt converted to a 15 year loan. Take this sume to be €20k.

You now have a 20yr loan of €40k ( or 2 20 year loans). At 5% interest rate, the repayments on the 2 combined loans would be €160 per month.

This is in effect, bankruptcy, without the legal costs to you. While it is unpallatable to everyone who helped bail out the banks, they are doing deals.

Regards and best wishes!
 
Just another point, if your husband has a tax bill, you might look into "top slicing relief" it is a payment which averages out your previous and current payment tax rates. It may lead to some rebate.
 
top slicing relief only applies to individuals who have lost an employment.

what I don't understand about this case, is why you are still renting at €800 per month when you have a rental property that is only taking in €565 a month. If you moved in you'd be €235 better off (and more so if trs was applied to the mortgage interest).
 
Thank you ExBanker - one of the issues with your idea is that we can't afford the 160 per month. To be honest, I don't know if the banks will accept a writedown - because in reality it would really have to be some serious writedown in order to service the debts.

Nige- the reason we do not live in my husbands property is because it is on the other side of the country. My job is based in Dublin - cannot commute that distance, and I cannot just hand in my notice in the hope of getting another job.
 
coleman said:
Thank you ExBanker - one of the issues with your idea is that we can't afford the 160 per month. To be honest, I don't know if the banks will accept a writedown - because in reality it would really have to be some serious writedown in order to service the debts.

Nige- the reason we do not live in my husbands property is because it is on the other side of the country. My job is based in Dublin - cannot commute that distance, and I cannot just hand in my notice in the hope of getting another job.
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Well, I think, IF you were to get rid of the 2 houses and the personal loans, the single payment of €160 should be managable. Its certainly a lot better than what you face today. I think, there is a chance that a proposal, structured as outlined would be acceptable to all parties given your position. It represents a better outcome for both the banks and you.

It may be worth retaining some of the rental income for the 2 properties for a few months to build a fund to cover contingencies such as insurance PTRB etc. At your weakest, before your husband gets employment again is exactly the time to do a deal. This is the lowest level of expectation the Bank can have.

I take the point on top-slicing relief, but it depends if husband worked for his company or not.

ExBanker.
 
Hi ExBanker,

If we were to be able to get rid of the 2 properties, we'd be talking about owing the banks somewhere in the region of 130k in negative equity alone, not including the costs to sell the properties, or the personal debts. Would you honestly think that the banks would agree to €160 per month for that? Even if we 'handed' back the keys to them so that they don't have to go the court route, we would still be in the negative equity that is owed....

ETA - Apologies, I just read again what you said about holding some of the rental income...

Re the 'top slicing' relief - my husband did work for his company. Would this mean that we could possibly be entitled to a rebate?

Thanks for your post...
 
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Top slicing relief is applicable where a person pays a higher rate of tax on a redundancy payment than they paid on average over the previous 3 (I think) years. It would apply where for example a person was earning 30,000 per year and paying tax at about 10% for years and then got a redundancy settlement of 50,000 which was taxed at 42%. Revenue recalculate the tax paid on the redundancy so that it is not taxed at a higher rate than the average.
I have made up these figures.
Sybil
 
@Coleman, I do think that making a full declaration to the banks about your position, the likely future outcomes (higer interest rates, end of interest only etc.) They might look at a substantial write off on your debts.

I know this is not popular with many people as taxpayers bailing out the banks, but it is quite possible that the bank would take a write off on part of the €130k residual debt if you are clearing making the maximum payment possible.

Good luck!
 
ExBanker said:
@Coleman, I do think that making a full declaration to the banks about your position, the likely future outcomes (higer interest rates, end of interest only etc.) They might look at a substantial write off on your debts.

I know this is not popular with many people as taxpayers bailing out the banks, but it is quite possible that the bank would take a write off on part of the €130k residual debt if you are clearing making the maximum payment possible.

Good luck!
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Hi Exbanker, have you any actual experience or knowledge of banks doing this though? It's been suggested before on AAM threads but there is little concrete evidence / anecdotes of people getting it for these large amounts of debt.....So before giving false hope to Coleman and others I am just wondering what your base your opinion on? Do you have a situation where banks did this for an amount that high?
 
The answer is yes. Even if the bank were to get a judgement of €130k, it would be of little no value to them, there is a commercial reality here, that the cost of collecting the money would exceed the money collected. Also, given the fact that interest rates will be rising in the coming 2 years, the amount of the short-fall is likely to increase.
 
ExBanker - thank you for your posts and your knowledge. However, with my work situation, I don't think that it would be possible for me to do this. With my job, credit checks are done when going into employment. If a tick came up against my name it would not look good and I don't know whether to take the chance or not, but with the situation we are in, I fear, it's best if I leave all well alone when it comes to me. Considering it's my job putting food on the table, I would be reluctant to take a chance. But I am still considering what you are saying.

We had a lady from BOI come to the house a few weeks ago. I basically told her that my husband has no money (my husband was present for the meeting as were the kids). I told her that if they kept his mortgage repayments the same, release his name from the 20k loan (which was initially a business overdraft which they pulled and more or less forced him into a corner, of which I stated that he was under pressure to sign and surely that was against procedures?) that we would make a stab at paying off the 9k overdraft in bits and bobs. I told her that we/I could not come up with a repayment plan for the 9k and also made a point that I was not liable for my husbands debts, and furthermore would not be held liable for them. The other option, I told her, was for us to move to the UK and declare bankruptcy. I mentioned that it would be quite easy for us to do so, as I could apply for a work transfer.
She was a nice lady. I think she came to see if we were telling the truth and didn't have a Picasso on the wall or something. And of course, she saw the kids, which all helps our case.

I explained that my husbands mobile no longer works so I gave her my mobile. The reason besides others that I say she was/is a nice lady is because after I gave her my number, she told me that she would not give that to anyone else. I appreciated that.

She phoned about a week later, to basically say, that the mortgages dept could not understand why my husband would contemplate handing back the keys. As far as they are concerned everything is hunky dorey! I don't know what they are talking about there - his account is in arrears and building up further. Then she said, the same speel again - if we could come up with something etc.

This week my husband spoke to the gent he has been dealing with in the Collections Dept. He stated that he tried to keep the account with him, but it's now out of his hands and is gone to the next level - being the legal team. My husband said to him that we should expect court and the guy in BOI more or less agreed.

I did put it to the lady who visited us, that what can they do but bring him to court. And that that would cost them money. She said that then if it was court, my husband's debt would rise further, to which I said, that makes no difference at all. If he has nothing, he has nothing. They can't jail him. So it makes not one iota how much he owes. He just cannot pay it. I asked her about 'handing back the keys' as we have come to a stage where we can't take much more. She said that she didn't know the procedure for that, but during the phonecall later, she said that the bank would look more 'favourably' if he sold the house first and then handed back the keys.

I just thought to fill people in on everything. I am waiting for the first initial 'legal' letter to come and then I will send a letter in to all of the depts outlining our same proposal again.

Thank you again to all for your posts.
 
Hello Isobel-33,

Yes, people here have been very good in offering advice to our situation.

We received the first of many I assume a letter from Fitzpatrick & Co Solicitors yesterday, advising my husband to pay the sum of 7,439.04 within the next 7 days or legal proceedings will be necessary. My husband phoned them and explained the situation and the gentleman advised that proceedings will be in the next 2-3 weeks with Circuit Court in approx a years time. He thanked my husband for being so upfront about the situation.
I have been reading Time's post on Court Procedures and I just have a question, if someone could answer it for me please?
Time advises, from what I understand to not defend the case. Does this mean that my husband should go to the court or is it pointless as he does owe the money? I just thought that judges wanted people to state why they have not been able to pay their debts or am I misreading the media? From reading Time's post, I get the idea that if my husband were to take part in any of the proceedings (just to even say why he cannot pay these debts) that it is pointless as costs accrue further? I'm just afraid that if he cannot say why he cannot pay the debts that the judge will make a judgement that he cannot afford and then we will be back to square one.

I have sent letters in to all the relevant departments to BOI regarding his situation and only solution. I have already told them the solution already, but obviously it has fallen on deaf ears and for some reason they seem to think that he has money when he hasn't.

Thanks again for the advice, knowledge and help.

Coleman
 
I'm sorry Billo - I do not know what you are asking?

We gave BOI an offer - our only offer. I'm sure I have already advised this board of it, but I don't have the inclination to see where on my posts it is, so I will just reiterate it here. We offered :
In lieu of the €20k personally guaranteed business loan (which my husband was coerced into signing being a previous overdraft facility, and of which the balance is now at €18k) -my husband offered €5k in full and final settlement
In lieu of his €7k and €2k overdraft facility on his personal accounts (of which the balance in total for both is €7,400) I offered to pay a monthly sum towards this, out of my salary.

We received a letter from BOI's solicitors today stating that their client will not accept this and will proceed as previously stated.

What do they want? I know they want their money, but this is absolutely crazy. Do they think that we would go as far as it has got if we had money? I think they are just completely and utterly trying to destroy people. I don't think there is anymore we can do? Are we at the end now? Does this mean that my husband is better off NEVER working again? Is the only option we have in securing some kind of a good life for our kids what Cash King said? Bankruptcy? Is that it, because right now I really cannot see the wood from the trees.
 
If you have really gone about getting your message out, but they really are ignoring you because they "think the money is really there", then I reckon they think the money is going to be paid by you or your/his extended family if they hang tough and keep squeezing.

Sorry dont know what the best thing to do is but I reckon you SHOULDNT suddenly volunteer to take the debt on yourself - that is what they are counting on, I guess.

I never meant to say he would be better off never working again - but maybe little point doing so until the bankruptcy is discharged....
 
Hello all - I really have no idea how to say this, but I can only say it straight. We are now in the position where I am at the end. I love my children to the ends of the ends that OF THE ENDS that I can give them. I can give them nothing more, save a woman who says 'give me a kiss'......and this they do without abandon - I feel safe that they do this of their own free will and without abondon. NO MATTER what happens feom here on in I know I and my children will survive. I wish to God, and I am far from a church-going lady that what BB's says and ones who agree with him need to seriously wake up and smell the coffee - irregardless of the one that is feeding it to you - nothing stays the same, it never does - NEVER forget that.
 
coleman said:
Hello all - I really have no idea how to say this, but I can only say it straight. We are now in the position where I am at the end. I love my children to the ends of the ends that OF THE ENDS that I can give them. I can give them nothing more, save a woman who says 'give me a kiss'......and this they do without abandon - I feel safe that they do this of their own free will and without abondon. NO MATTER what happens feom here on in I know I and my children will survive. I wish to God, and I am far from a church-going lady that what BB's says and ones who agree with him need to seriously wake up and smell the coffee - irregardless of the one that is feeding it to you - nothing stays the same, it never does - NEVER forget that.
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Your post sounds very worrying. Was it just a low moment or are you in a very serious place? Is there anyone who can help you? Have you tried any charities - St V de P/Samaritians/Local Church? Do let us know how you are.
 
Coleman, I hope you are ok?
I read your story and followed as you have a young family, and I identified with that. Is there someone you can call to 'unload' your worries at all?
Has something specific happened and if so, perhaps someone here can advise you?
 
I am sorry if I have caused any concern. Things have been mounting up on me, and I had a few drinks last night and let the anger and self pity get to me. As one can see by the time, I'm not sleeping very well either.
Unfortunately, no, there really isn't anyone that I feel I can talk to. Don't think the likes of SVP etc would be able to help either.
Latest is that tomorrow my other half will be letting the bank know that he is unable to pay his mortgage and to let them know that they can/should go ahead and do what they are going to do.
Looks like the tenants in my property are going to be leaving shortly also, and I have already restructured the mortgage and it looks as though I will need to reduce the rent again, which means another restructure if they allow it. It's getting to the stage that it seems to be pointless continuing on and just handing it back. I don't know. I have sent them letters asking them very simply, 'can they show me a way, based upon my income, how I can ever hope to repay this loan' - and they never answer.
I have asked them to stop phoning me but to write to me instead - this they have followed, so that's one less burden I suppose. Husband still not entitled to anything on SW so therefore he cannot even retrain as we cannot afford to pay the college fees, and one of us has to mind the kids....it's a big, black hole and I see no way out.
Sorry again for causing concern - it just all got a bit too much for me....
 
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