Overwhelming business & personal debt: solutions? including UK bankrupcy.

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newlife

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It is my first time here and after reading many posts I am now even more confused! I am looking for good solid factual advice.

I am a 38 year old woman who ran her own business all her life up until 2009 when I had to close down.

After a short period (about 2 months) on the dole I found work.

With the help of MABS I have an Income/expenditure form to show where all the money goes, at the end after expenditures, there is approx. €150.00 p.m shared out to a few debtors.

This will mean I will NEVER be able to repay my debts.

I have a mortgage for €275k on a house that is worth approx. €180k now. I also have two Judgements on my home at present for €30k and another one for €65k pending (not registered yet), plus about another €150k in other unsecured debts (includes approx. €40k to Revenue).

I commute to work every day (about 3 hours travelling) and am totally depressed and exhausted. By neighbourhood has drastically changed over the past few years (for some reason my neighbouring houses are all rented now by a mixture of very inconsiderate and unpleasant characters and I HATE coming home. My quality of life is work, come home & close the curtains and sleep, work, sleep, work, sleep. If I continue like this I will simply have nervous breakdown.

I don't know what to do. I have been harassed by many shady collectors including well known 'celebrity' debt collection agencies (if you know what I mean).

I am considering going Bankrupt or handing back my keys or moving and renting closer to work (but I would not rent my house for more then €700 if I was lucky and Mortgage is €1100 pm).

What is the point of killing myself working and commuting for a house I hate and cant sell when maybe in five years or so I will be forced to sell by one of my Judgement orders? It appears I could be thrown out when my mortgage decreases, so maybe in 20 years when mortgage is finally paid off and I am thrown out and have nowhere to live?

Any good solid advice would be most gratefully received, what would you do?
 
Hi newlife

It seems clear to me that you are bankrupt. If I understand the figures correctly, you have a house worth €180k and you owe about €520k.

You are unable to keep up even the minimum repayments on this debt.

I think you need to talk to your mortgage lender and tell them that you intend to file for bankruptcy but you are happy to surrender the house to them voluntarily. Alternatively, they will ask you to stay in the house until it is sold.

That is a decision you need to make. If you can rent closer to your work, well maybe that is what you have to do and try to sell the house.

Bankruptcy in Ireland is a very difficult process compared to the UK. I think you need to go to England or Northern Ireland and become bankrupt there. You will get a fresh start after about 18 months.

The alternative is to wait for new legislation to update bankruptcy laws in Ireland. However, you could be waiting a long time for that to happen and it may be that the UK system will still be more attractive.

Brendan
 
Hi Brendan,
Thanks for your reply. I am not sure which option you mean exactly?
If I go to the UK, I presume my house will be repossessed. If I move closer to work and rent my house will have to be repossessed also as I cant afford to pay the mortgage also and renting will be too little. Which do you think is a better option?
Kind Regards
 
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
 
Have a look at all the threads that discuss bankruptcy in the UK/Northern Ireland:



They are all worth a careful read.

Re. the Free Legal Advice lady ... forget her .... read the above and make your own informed decision on the matter.
 
newlife said:
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
Click to expand...

This is absolute nonsense, shame on her!
If you go bankrupt in the UK you need to prove that your centre of main interest is in the UK, which means you need to live there for at least 6 months, have a job/be claiming benefits and have a lease agreement.

It costs around £750 to go bankrupt, you can do it in a day and you don't have to go to a court room to do it. Most people are discharged after 6-12 months, although you have to continue making token payments to your creditors for 3 years from the date your bankruptcy is granted (you're allowed I think £50 disposable income after reasonable household and personal expenses). You should be able to come back to Ireland once your bankruptcy has been discharged and the banks won't be able to touch you.

If I were you i'd go down this route. You sound like you're at the end of your tether! Do you have any family or friends in the UK or Northern Ireland who could put you up?
 
Hi 'burnt-toast', thank you for your reply,
Yes I do feel a little at the end of my tether! I have had such conflicting advice and opinions that I really dont know what to do.
I have a friend who might put me up very temporarily till I found something of my own but it would not be a long time solution. I was born in the UK so I dont know if that is any advantage?
It appears going to the UK is something I need to strongly consider but I guess I am nervous about finding work over there, my own place, etc, etc.
On the plus I dont have any kids and I am young and healthy so I guess now would be the time to do it rather then waiting another ten years!
 
newlife said:
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
Click to expand...

Ignore the lady solicitor and have a look a the following website some great tips here for you [broken link removed]

I am getting a large number of calls from Eire citizens who are seeking help in deciding whether or not to go bankrupt. My articles on the possibility of going bankrupt can bee seen on article base and these are being found on internet searches by those in Ireland with huge property debt.
The economic situation in Ireland is pretty grim. I am currently advising individuals with debts in excess of £15 million, although many citizens have debt of much lesser sums.
The main feature that every one has is that they own their own main and family home, but also a small portfolio of buy to let property.
The issue with the by to let situation is that the rental yields that are being generated from the buy to let are not sufficient to cover the sums due on the mortgages each month. I have one client who is now being taken through bankruptcy who was struggling to make up shortfalls on his buy to let mortgages of €1000 per month. He had kept this going for a year before he had used up all his savings and still found that these losses were continuing and that the value of the property he was looking to keep had halved in value.
I am helping him through bankruptcy here in the UK. He has relocated here to England and is in then process of establishing his COMI, which is making England his centre of main interest. He has obtained an NI number, a bank account and is working here in England.
He has no wish to retain any property in Ireland and so he is giving notice to his tenants to quit the rental property. He has advised his bank in writing that he has relocated to England and he will hand the keys to all his property back to the bank. When he goes bankrupt here, any money that is owed to the banks will be written off, irrespective of whether the property has been sold by the bank at that time or not. As and when the banks crystallise their loss on sale they will merely advise the Official Receiver here in the UK of the amount of the shortfall on the mortgage.
It is possible to keep a family home.
It is the bankrupts share in any property which becomes vested in the Official Receiver. If a wife has a half share of the property, and wishes to keep the house, she can ask for her husbands share to be sold or transferred to her. If there is equity she can buy that equity out. If the house is jointly held that would equate to half the equity.
If the property is in negative equity she can arrange to take the house back for just legal fees. It must be born in mind that she will take on the whole mortgage subject to all the negative equity.
Where the house is simply held in the bankrupts name and the wife wants to stay in the property, it might be possible to do a deal with the mortgage provider for them to write off negative equity in return for the wife taking on a new mortgage.
Click to expand...

Read more: http://www.articlesbase.com/mortgag...in-a-uk-bankruptcy-5062315.html#ixzz1UHvcAmD2
Under Creative Commons License: Attribution No Derivatives
 
Thanks Paddybloggit, I am strongly considering it!
Cashier, I will definitely read up more on these articles, very informative, Thank you.
 
newlife said:
I went to Free Legal Advice service recently and they told me that Bankruptcy in the UK was not an option. In fact the lady solicitor was quite rude and unhelpful about my situation and said, 'Well, if in 10 years they take your house to pay off some of your debts would that not be a good thing? At least you will have paid some of what you owe back!'
The Irish mentality to debt appears very different to that of the UK.
Click to expand...

With respect, the FLAC advisors tend to know their stuff. I would guess that you misunderstood or that you have misquoted the advisor.

Brendan
 
Hi Brendan,
I honestly don't think so, as I asked her a number of times so as to get a clear and concise response from her. Also, I had a friend with me, exactly for that reason, in case I misunderstood what facts I was told. We both understood it and heard it the same way. Anyhow, it was clear as day that she was very dismissive and against the idea for some reason. What she said actually, to clarify was; 'No that would not be possible for you' and I pressed further and said I had heard of many moving to England for this reason, she laughed and added, 'Well, it might be possible but only if you have debt in the UK as well as in Ireland.' I again asked was she 100% sure of this as I was hearing conflicting advice and she said she was sure.
Also, as a point of interest, 6 months previous I visited another FLAC advisor, and this time I was very enthusiastically advised to go bankrupt in Ireland (and again had a friend with me).
Therefore, it appears from my experience that the advice I am getting from them is very conflicted and varied. Tomorrow, I am paying to get the advice of a independent solicitor and it will be interesting to see if it has been so far a case of 'if you pay peanuts... you get monkeys?'
 
Let us know how you get on tomorrow as I am sure there are many in the same boat as yourself.
 
newlife -a couple of points..

-Although not necessary for UK bankruptcy being a UK citizen may mean you could could have an easier passage thru the local UK bankruptcy court. You're entitled to a British passport.Get one from the UK embassy in Dublin.

- On the thread "walking away from debt" there's a post number 71 from some guy,Steve Thatcher, who says he'll offer anyone free advice.

- and , believe or not, you are a young person. Someone in their teens may not think so, but to someone like me, nearly 30 yrs older, you are very young . I so envy you those thirty years in which you can do so many things.
 
newlife said:
Hi Brendan,
I honestly don't think so, as I asked her a number of times so as to get a clear and concise response from her. Also, I had a friend with me, exactly for that reason, in case I misunderstood what facts I was told. We both understood it and heard it the same way. Anyhow, it was clear as day that she was very dismissive and against the idea for some reason. What she said actually, to clarify was; 'No that would not be possible for you' and I pressed further and said I had heard of many moving to England for this reason, she laughed and added, 'Well, it might be possible but only if you have debt in the UK as well as in Ireland.' I again asked was she 100% sure of this as I was hearing conflicting advice and she said she was sure.
Also, as a point of interest, 6 months previous I visited another FLAC advisor, and this time I was very enthusiastically advised to go bankrupt in Ireland (and again had a friend with me).
Therefore, it appears from my experience that the advice I am getting from them is very conflicted and varied. Tomorrow, I am paying to get the advice of a independent solicitor and it will be interesting to see if it has been so far a case of 'if you pay peanuts... you get monkeys?'
Click to expand...

Like Brendan, I would be hesitant to dismiss the advice given to you out of hand, if for no other reason that the person you spoke to should be in a better position than us to assess your situation. So I think it is a very good idea that your are seeking independent advice and I would suggest that you ask the solicitor to summarise his advice in a letter to you, so that you have a solid basis for making your decision.

Good luck with whatever you decide,

Jim.
 
Hi Jim, thanks for your post.
I agree completely, I am definitely NOT 'dismissing the advice given to me out of hand', which is why I am meeting today with another solicitor, so as to confirm the facts one way or another. But I am sure you can understand my confusion when I have received completely conflicting advice from two FLAC advisors. Well lets see what today brings! I have already emailed him all my queries and I will post here and report the advice given.

'Old Nick', Thanks kindly for your post also,
I appreciate any advice. I will definitely try to contact that fellow Steve Thatcher, and see what he says. As to age, you are right, we never appreciate things properly at the time. I guess I am still young, deep down I now I have to do this now or I will let my opportunity pass but I have to be honest I am scared. I guess we get comfortable in what we know. But I guess the only thing to fear is fear itself! Thanks again.
 
newlife said:
What is the point of killing myself working and commuting for a house I hate and cant sell when maybe in five years or so I will be forced to sell by one of my Judgement orders? It appears I could be thrown out when my mortgage decreases, so maybe in 20 years when mortgage is finally paid off and I am thrown out and have nowhere to live?
Click to expand...

That is precisely what would happen to you if you stay and continue to pay back your debts. The minute your house is equal to your debts they will sell it. That is the reason for seeking the judgement orders.

Interestingly the costs of going to court for those judgements seems to be a wasted efford as you are already in massive negative equity. Wonder why a financial institution has done that.

You asked the question 'what would you do?' The UK bankruptcy route is all that is viable for you. It would be really great if you post back the advice you are given for others on here who cannot afford to seek advice. The only other think you could do is stop paying everything and let them take the house from you or hand back the keys. With the debt you have it is pointless.

One question, the two debts of 30K and 65K were they for the business and did you give personal guarantees?
 
Hello newlife. I am sorry to read about your situation. You seem to have had conflicting advice from FLA, neither of which was very helpful for you.
In short I would not countenance going bankrupt in Ireland. Here is a helpful link to an article I have posted on the net about the contrasts between the UK and Irish bankruptcy regimes.
Askaboutmoney.com > > Mortgage arrears, personal debt & negative equity > Key Post A comparison of UK and Irish bankruptcy procedures

You are very insolvent and I do think that bankruptcy is the right thing for you.

Here in the UK it is a favoured jurisdiction for anyone in the EU looking to divest themselves of debt, no matter where that debt was built up in the UK, simply because we view bankruptcy as a way to get someone economically active again and free from debts they will never pay back. Other regimes still seem to see bankruptcy as a mechanism to extract costs and fees and as a blunt debt collection tool for a creditor.

To go bankrupt in England, you will need to establish you centre of main interest here. That essentially means you will need to uproot yourselves and come and live here. That period of residency could be anything from 3-6 months, and then you can apply for your bankruptcy. You will need to get a National Insurance Number, which is pretty straightforward, get an address, from which you can get a bank account. With all these in place you are well on the way to proving you are materially here.

It doesn't matter that all your debt is in Ireland. What is clear from judicial statements is that it matters not where your debts were built up, or even if you move to the UK just for the purpose of going bankrupt, it is the fact of being materially resident here that qualifies you for the ability to declare bankruptcy.

Please feel free to post back any other questions.
I really hope that you get this advice today.

It does seem that many advisors are not sufficiently aware of the rights of Eire citizens when it comes to UK bankruptcy.

Good Luck

Steve
 
Hi Steve,
Thank you for your reply. I am back on here after dismissing the idea for a bit, mainly out of fear and in the hope something would magically present itself. Unfortunately the only thing that has happened has been more court appearances, judgements and more stress.
So this time determined to go.
My questions are the following,
I am currently working and paying off reduced mortgage payments as fell into arrears.
what is procedure for going England and bankrupt? Should I just post keys to bank when leaving? Should I stop paying and let them reposess, but if I am currently working, will I get into trouble?
Or should I tell them my plans?
Just confused about initial steps to take with my house and how to go about it!
 
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