Brendan Burgess
Founder
- Messages
- 52,284
Why would you go to a Personal Insolvency Trustee to get this agreement?
You should just ask your bank if they are prepared to accept it.
It's very odd or else I don't understand it.
Brendan
It is pandering to the banks once again.
I don't think it's really pandering to the banks as such. It's recognising the reality of the situation. If they just allow a simple write off of debts, then no bank will lend in Ireland again. It's hard to get the balance right. But this bill doesn't do it right. To be honest, I don't think that they really understand the issues.
If you opt for a Personal Insolvency Arrangement , the Insolvency Trustee may propose to adjust your mortgage. But you can make that proposal now anyway. There is no need for a complex PIA which just feeds more cash to accountants and solicitors.
What this might do is encourage a little more caution or at least due diligence in the banking system - we all know that the unbridled lending in the past has led to the current meltdownI don't think it's really pandering to the banks as such. It's recognising the reality of the situation. If they just allow a simple write off of debts, then no bank will lend in Ireland again. It's hard to get the balance right. But this bill doesn't do it right. To be honest, I don't think that they really understand the issues.
I'd imagine as the banks are now state owned and the state have come up with this legislation that there will be some pressure on the banks to agree...I've always said debt forgiveness is dangerous territory and now we will see how it works in practice.
Take this example.
John: Mortgage 300k. House value 150K. Income 30K. Undeclared savings: 50K. After living expenses for he and his family he cannot sustain mortgage. He gets say 150K mortgage debt written off, retains his house and his 50K (under the mattress). This is not an unusual scenario. The state is awash with savings and a lot of undeclared savings. People have deliberately not paid off their mortgage with savings in anticipation of such legislation.
In terms of bankruptcy, with this bill it is absolutely taken out of the banks hands. The bank has no say whatsoever if someone decides to declare themselves bankrupt.I am hoping the final legislation is worded better and that the decision to allow bankruptcy is taken out of banks hands.
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