Property surrender (voluntary) and insolvency

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Kitty1

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I have personal unsecured debt of circa 30k and a mortgaged property balance standing at 310k but valued at 150k.

I have a pip working on putting together an insolvency proposal.

The bank have agreed to a voluntary surrender but obviously I would still be liable for the shortfall.

Is it ok to surrender the home now, before the proposal has been put forward ? My pip seems to think I should do this now. I'm afraid the bank will then turn down the proposal as they'll want to sell the property first?
 
Has the PIP agreed anything with the lender?

After you surrender it, you will have €190k of unsecured debt and the bank can vote through or veto a Debt Settlement Arrangement.

I would be trying to get the lender's agreement to approve a very short term DSA e.g. 3 months in exchange for agreeing to the voluntary sale or voluntary surrender.

Brendan
 
DO NOT DO THIS!, your pip must be wet behind the ears. Use the house as leverage to get the best possible deal from the financial institution concerned. Get the deal in writing and signed and then follow through on your side of the bargain. Do not forget that your house is your best bargaining chip with the bank, do not give this away free of charge. If you do surrender your home, the bank will most likely seek judgment against you for the outstanding shortfall and veto your D.S.A.. If you decide to fight the bank it will cost them thousands in legal fees to seek repossession and you could possible still be in your home in 5 years time. Think of all the rent you will have saved. Yes, you will be saddled with the costs involved, but the bank know they cannot get blood from a stone. My eyes roll to heaven when I see this type of advice from a pip. Heaven help you.

P.S. get another pip.
 
Brendan,

Snap!

Kitty1,

take Brendan's or my advice, do not take the PIP's advice and leave yourself totally exposed.
 
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Kitty1

I cannot believe that any PIP would be naïve enough to advise you to surrender a property without agreeing a deal with the bank in advance. The reality is that some banks, subject to strict conditions, are prepared to accept voluntary surrenders and use their residual debt to "cram" down other creditors so that the debtor becomes solvent.

Having said the above, given that the Personal Insolvency (Amendment) Bill 2014 passed all stages in the Oireachtas on 20th July, and will shortly be signed into law by the by the President, your PIP should be examining whether you can now afford to pay a mortgage for just the market value of the property (i.e. €150,000) and use your unsecured creditors of €30,000 to "cram" down the bank's mortgage to €150,000. (I am assuming that the property is your family home?)

If you surrender your house now, you may never get on the property ladder again.

Once the Personal Insolvency (Amendment) Bill 2014 is signed into law, the bank's veto will be removed (subject to the conditions of the Amended Act.)

Jim Stafford
 
Kitty1,

Some great advice from Jim Stafford, which will further strengthen the leveraging power of your house in relation to doing a deal with the bank. As said before, dump your pip, whoever they are, they have not got a clue and indeed could do you a grave disservice.
 
From previous posts - the poster (Kitty) isn't residing in the house and hasn't for a number of years. In addition, she owes money to revenue for not declaring rental income on it and the NPPR tax, money to a bank (personal loan), the credit union are threatening to send the sheriff to her for a 15K outstanding debt and she collected rent from tenants on the house and never handed it over to the bank without telling her ex partner who is jointly and severally liable for the house - whilst being (and continues to be) in full time public sector employment throughout.

In addition, she apparently has limited funds to pay a PIP - so I'm not sure about firing the one she currently has working for her. I'm not too sure how 'kindly' the courts would look at her case, especially in lieu of it not being her PPR.
 
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Epicaricacy,

Kitty1 should have included these facts in her original post, so as not to waste posters time and effort. I still believe she should wait until details of the new act are revealed before voluntarily surrendering the house.
 
Apologies.

Yes, it is my only property but due to a break up I have not resided there for many years. Yes, I owed money to revenue but this has now been sorted - the amount was very small.

I do not wish to keep the house as I could never afford to live there alone and pay the commute to work.
I am renting a small house close to my work.

I am broke, completely and have limited funds to pay a pip. I have so far paid him about half his costs.
He has been waiting for this new law before putting in proposal - but his secretary spoke to me last week saying he was asking if I had surrendered the property yet and if not I should do so. She said they may look more favorably on me as I would be seen to be cooperating.

I'm confused now - I don't see why he isn't using it as a bargaining tool. I don't know what to do :-/
 
Could someone throw some light on my original question though...

IF I surrender the property ...will the bank make me wait until the property is sold by them at market value or whatever before I can look at a DSA then ? If so, how am I protected from my other debts in meantime ?
 
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