The rich don't get pursued for their debts like the poor do

The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc . Wealthy people also have no problem running up large legal bills to contest bankruptcy at every opportunity. Often in different jurisdictions. For Banks to recover debts of wealthy individuals, they often have to fight their way through multiple layers of financial and legal complexity and they often don't have the stomach for it.

The only reason that people like David Drumm, Sean Fitzpatrick and other bankers got chased like they did was because it was a political imperative to be seen to do it. Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder..... I have no doubt that in time, we are going be setting up a Tribunal to deal with NAMA and how it dealt with the loans and developers.
 
Sunny said:
Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder.....
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Gerry Gannon lost his stake in the K club among other things. So he was pursued and lost some of his wealth even if his lifestyle didn't take a major hit. And as Brendan outlined earlier it's often better to engage with these people and work with them to regain some of the money owed. It's not good optics to have NAMA pay Gannon €170k a year but if that results in multiples of that being recovered then it's prudent to do it.
 
PGF2016 said:
Gerry Gannon lost his stake in the K club among other things. So he was pursued and lost some of his wealth even if his lifestyle didn't take a major hit. And as Brendan outlined earlier it's often better to engage with these people and work with them to regain some of the money owed. It's not good optics to have NAMA pay Gannon €170k a year but if that results in multiples of that being recovered then it's prudent to do it.
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Losing a share in a golf club or having to sell your plane is not the same as the average family losing their family home and that is what we are talking about. Lets not talk nonsense that making a multi millionaire property developer bankrupt is the same thing as making the average family bankrupt. If you want to check Gerry Gannon, how many properties were transferred to the wife and were never available to creditors? Know many 'normal' people that can do that?

Again it has nothing to do with rich people don't pay their debts or they somehow are let off by banks compared to poorer people. It comes down to the adage that you owe bank 300k then it is your problem. You owe the bank 300m and it is the banks problem. There are a lot of wealthy people that have been made bankrupt in the past 10 years or owe significant amounts of money walking around with significant wealth as of today. Rightly or wrongly. There are not many average people made bankrupt in the past 10 years still not paying a heavy price. To pretend there is no difference is just nonsense. They might all go through the same legal process but its a very different experience.
 
Sunny said:
The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc .
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This is the crux of it. Wealthy people can build up assets outside of the reach of creditors, so they can go bankrupt and come out the other side with those assets intact.

Normal people just save their money in accessible investment vehicles that their creditors get access to. When they go bankrupt, they come out the other side with nothing.

The numbers involved may be bigger and seeing someone driving an €80k car after being bankrupt may look as if he got away with it but the process is the same for everyone.

Steven
www.bluewaterfp.ie
 
Sunny said:
Losing a share in a golf club or having to sell your plane is not the same as the average family losing their family home and that is what we are talking about. Lets not talk nonsense that making a multi millionaire property developer bankrupt is the same thing as making the average family bankrupt. If you want to check Gerry Gannon, how many properties were transferred to the wife and were never available to creditors? Know many 'normal' people that can do that?

Again it has nothing to do with rich people don't pay their debts or they somehow are let off by banks compared to poorer people. It comes down to the adage that you owe bank 300k then it is your problem. You owe the bank 300m and it is the banks problem. There are a lot of wealthy people that have been made bankrupt in the past 10 years or owe significant amounts of money walking around with significant wealth as of today. Rightly or wrongly. There are not many average people made bankrupt in the past 10 years still not paying a heavy price. To pretend there is no difference is just nonsense. They might all go through the same legal process but its a very different experience.
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I never said multi millionaires going bankrupt was the same as the average person going bankrupt. I acknowledged Gannon's lifestyle didn't take a major hit.

The millionaires definitely fair better. That's not in doubt. But to say they don't get pursued is wrong.
 
Sunny said:
The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc . Wealthy people also have no problem running up large legal bills to contest bankruptcy at every opportunity. Often in different jurisdictions. For Banks to recover debts of wealthy individuals, they often have to fight their way through multiple layers of financial and legal complexity and they often don't have the stomach for it.

The only reason that people like David Drumm, Sean Fitzpatrick and other bankers got chased like they did was because it was a political imperative to be seen to do it. Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder..... I have no doubt that in time, we are going be setting up a Tribunal to deal with NAMA and how it dealt with the loans and developers.
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Perhaps the real question here is whether pensions, trust structures and other such devices should be available to be excluded from bankruptcy? Perhaps there should be some kind of cap, in line with the 'reasonable expenses' approach that would cap the size of any such assets permitted?
 
When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were horrified at the suggestion.

I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.

Brendan
 
Brendan Burgess said:
When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were horrified at the suggestion.

I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.

Brendan
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Did everyone in the group have a substantial pension entitlement? I.e. the turkeys won't be voting for Christmas.

Perhaps only a portion of pensions should be available to creditors.
 
Brendan Burgess said:
When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were horrified at the suggestion.

I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.

Brendan
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Not only did they not make them available to creditors in bankruptcy cases, they didn't even make them available to people themselves in arrears. I knew a couple in their early 40's with over €600k in pension funds while falling behind on a €250,000 mortgage for two years. They were never in danger of losing the house but they still talk about those years as the most stressful two years of their lives and nearly cost them their marriage.
 
Brendan Burgess said:
When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were horrified at the suggestion.

I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.

Brendan
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It's not as simple as that Brendan. Occupational pension schemes are set up under trust for the benefits of the members. The members don't own the assets. This is to protect the members in the event of the employer going bust and it prevents their creditors going after the pension benefits. It would also have the effect of protecting the assets of the employee in the event of them going bankrupt.

PRSA's and personal pensions are written under contract and should be available to creditors. Maybe there is an understanding that those in schemes have their pension assets protected and it is unfair that the self employed can't protect their assets in the same way?

Steven
www.bluewaterfp.ie
 
Allpartied said:
Seanie Fitzpatrick and convicted fraudster, David Drumm, are sitting pretty. Big mansions , multi million euro pensions, wedding at the K Club. The ordinary Joe is given a budget plan, live off 30k a year and the bank takes the rest.
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As will happen all of us, not much good now. Probate could be interesting though :cool:
 
Strings like these get filed with myths and half truths, based on hearsay and populist nonsense. From the top down. If a wealthy person gets into financial trouble he/she will do everything to minimize the damage. There are many angles that can be used. That's what anyone else would do. Self employed people pull all sorts of strokes to hide their cash from The Revenue. People on the dole, claiming housing etc pull all sorts of scams. Public sector workers maximize every allowance under the sun while many do as little work as possible etc. It's human nature. Everyone/every group can be accused of something but does it apply to everyone and does it really matter. Many of you people choose to moan about wealthy people while others moan about many other groups. It's not very productive and sadly with the internet and social media it is getting worse. Unfiltered, uninformed guff.
 
Brian C said:
Strings like these get filed with myths and half truths, based on hearsay and populist nonsense. From the top down. If a wealthy person gets into financial trouble he/she will do everything to minimize the damage. There are many angles that can be used. That's what anyone else would do. Self employed people pull all sorts of strokes to hide their cash from The Revenue. People on the dole, claiming housing etc pull all sorts of scams. Public sector workers maximize every allowance under the sun while many do as little work as possible etc. It's human nature. Everyone/every group can be accused of something but does it apply to everyone and does it really matter. Many of you people choose to moan about wealthy people while others moan about many other groups. It's not very productive and sadly with the internet and social media it is getting worse. Unfiltered, uninformed guff.
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Who are YOU people?? Obviously we don't exist on the same plane of existence as you but we are trying hard..... As you moan about people moaning about people....
 
Brendan Burgess said:
I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.
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I think in a PIA there is scope for creditors to access "excessive" pension contributions made in the three prior years.

I think a better test would be how large the fund is relative to someone's age. You could plausibly have a 55-year-old with a €1m pension fund looking for a PIA to write off all debts, then able to access the pension a mere five years later.
 
Sunny said:
Who are YOU people?? Obviously we don't exist on the same plane of existence as you but we are trying hard..... As you moan about people moaning about people....
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No I am like everyone else. My point is we can spend our time giving out about different groups of people, using some facts but also a lot of generalized unsubstantiated commentary. It achieves nothing except labeling and tarnishing whole groups of people. For example, if you believed everything that is said and written about landlords they would be gathered together and collectively hung in College Green. The truth is that the majority are very good landlords as by being so their tenancies tend to go well and are less problematic. As for wealthy people walking away from their debts, it is very complicated and every case is different. As a related question. Do you know how many people who were very wealthy and then lost everything in the 2008 crash killed themselves? The number is surprisingly high. They didn't get away with anything but nobody thinks of them. I'll say no more.
 
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