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

Joe Soap suffers far more in these situations than the wealthy individual who has the resources, advice, and connections to cushion their fall.

I've seen both sides up close. One relative has been through the ringer for a relatively small debt they defaulted on because of sudden unemployment. They tried absolutely everything they could to get it sorted, bank refused to engage and made the situation much worse than it needed to be for everyone involved. Many of us know people in this position and they survive but it's really tough.

Another family member is a high-profile name. They took big risks and purportedly lost it all but in fact moved massive wealth out of the reaches of the authorities, apparently legally done. But the degree of skullduggery, melodrama, and brazenness involved is sickening. This person claims to be destitute while in fact living a life that would make the royals blush. They will live out their lives very comfortably.

There is just no comparison.
 
The thread title is very clear and nothing has been posted here which suggests that it is true.

The lenders pursue people who owe them money when they can.

It may be true that rich people put money beyond the reach of their creditors whereas poor people don't.
It may even be true that being pursued has a bigger impact on the poor than on the rich.

I don't think that they are true, but they may be.

But it's absolutely clear than lenders pursue rich people as well as poor people to recover their debts.

Brendan
 
NoRegretsCoyote said:
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.
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I presume those with defined benefit pensions, worth 1m in the open market, would also be included in this group?
 
Firefly said:
I presume those with defined benefit pensions, worth 1m in the open market, would also be included in this group?
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Look, no system is perfect and high-ranking career bank staff and civil servants with DB pensions tend not to be people seeking PIAs.

As a general principle a pension shouldn't be a vehicle to (accidentally or otherwise) shield very large amounts from creditors.
 
NoRegretsCoyote said:
Look, no system is perfect and high-ranking career bank staff and civil servants with DB pensions tend not to be people seeking PIAs.

As a general principle a pension shouldn't be a vehicle to (accidentally or otherwise) shield very large amounts from creditors.
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Are you going to change the laws of trust law? If you contribute to an occupational pension while bankrupt/ company insolvent, those monies can be recovered. You cannot change the law just because a pension fund is large. What if someone was an ordinary employee who had contributed to the pension, maxing out AVC's for 40 years? Through diligent savings their pension is worth €1.5m. Should they be gone after too? You can't have laws that are conditional on who they apply to.
 
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 think you are probably correct on all fronts. The only thing I would add is that a wealthy person eg a developer probably has more sources of income, advisors, angles to play with in the good days than most of us and when he/she gets into trouble he/she has more weapons to fight with and more ways or surviving somewhat intact. Us lesser mortals don't. That's how you end up with the position where the likes of the developers post the bust are now looking reasonably ok. The truth is that most were massively damaged but they were in a position to get going again quickly. But people see them as untouched.
 
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The whole idea of bankruptcy is to give people a fresh start.

We want developers to get going again. They have the skills to pull together different resources to build houses and offices.
 
And look at the PIAs which are being done for ordinary people.

Mortgages are being effectively made interest only at tracker rates.

These are being imposed on the banks.

And many ordinary people go bankrupt and get rid of their debts.

Brendan
 
Brendan Burgess said:
The whole idea of bankruptcy is to give people a fresh start.

We want developers to get going again. They have the skills to pull together different resources to build houses and offices.
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I guess we have to accept that, if they are a scarce skillset.

But, lets make the game fairer. If the state, ultimately, has to come in and bail out reckless borrowing by these superstars, it should be able to take a bigger slice of their profits when they are making the millions. (50 or 60% CGT on these type of activities would be fair).

But we can already hear the whinging and moaning from the millionaire class, for whom a 20 million euro profit is not enough. They want the full 50 million.
 
Allpartied said:
If the state, ultimately, has to come in and bail out reckless borrowing by these superstars,
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Eh no.

That is the populist view, which is wrong.

It was the ordinary depositors who were guaranteed by the state not the developers.

The guarantee was up to €20k which was enough in my opinion but it was made unlimited. So all the Credit Unions were saved from destruction by the bank guarantee.

Brendan
 
Wj
Brendan Burgess said:
Eh no.

That is the populist view, which is wrong.

It was the ordinary depositors who were guaranteed by the state not the developers.

The guarantee was up to €20k which was enough in my opinion but it was made unlimited. So all the Credit Unions were saved from destruction by the bank guarantee.

Brendan
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Why were the banks unable to honour their depositors?
 
Steven Barrett said:
You cannot change the law just because a pension fund is large.
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I don't know the ins and outs of trust law and the Personal Insolvency Act.

But as it stands, all else equal, a million euros in a deposit account goes to creditors and a million euros in a pension fund does not. I don't think this is particularly fair.
 
Steven Barrett said:
You cannot change the law just because a pension fund is large.
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Actually, you can - you can have law that depends on the size of the pension fund, just as many current tax laws work at present. You could indeed allow a modest pension, in line with the Reasonable Expenses approach, while not allowing the kind of pension that will fund a Range Rover. There's nothing unusual about a principle that pensions of different sizes are treated differently.
 
NoRegretsCoyote said:
I don't know the ins and outs of trust law and the Personal Insolvency Act.

But as it stands, all else equal, a million euros in a deposit account goes to creditors and a million euros in a pension fund does not. I don't think this is particularly fair.
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The bankrupt does not own the €1m in the pension pot, they own the €1m on deposit.



RetirementPlan said:
Actually, you can - you can have law that depends on the size of the pension fund, just as many current tax laws work at present. You could indeed allow a modest pension, in line with the Reasonable Expenses approach, while not allowing the kind of pension that will fund a Range Rover. There's nothing unusual about a principle that pensions of different sizes are treated differently.
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In the context of the discussion, having those limits can have an impact on a 65 year old who has saved into his pension for his lifetime and made a mistake by buying an investment property in Bulgaria. Or someone in a defined benefit pension who receives €33,000 a year pension. If they were in the public service, they would have earned €66,000. Hardly rich but their pension would come into play if there was a limit of €1m.

And how would a public servant's pension be treated? It is unfunded, so there is nothing to take. They are protected but someone in a private pension isn't?
 
Brendan Burgess said:
Would you like to enlighten us and provide a link to the source of your data?
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The Journal.ie quotes a survey by The National Suicide Research Foundation stating that between 2008 and 2012 male suicides increased by 470 and this increase was due to the recession/bank crash. A number of years back I read an article somewhere about the death of a particular developer that listed him as the 35th developers/business people to have committed suicide due to the crash. To me it made/makes sense, you are a paper millionaire, living the life, along comes a crash and you can't deal with the loss of money, you "good" name etc. Point is that a lot of so called wealthy people got hit very hard.
 
Brian C said:
Point is that a lot of so called wealthy people got hit very hard.
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I have no doubt at all about that. In fact, I have made the point myself.

But I would not trust
1) Your recall of
2) The Journals' quotation of
3) The National Suicide Research Foundation findings.

Brendan
 
Allpartied said:
Why were the banks unable to honour their depositors?
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Because they lent irresponsibly to property developers and mortgages to ordinary people.

But the two main banks which went insolvent were Anglo and Irish Nationwide. Their depositors got a higher rate because of the perceived riskiness of those banks. And yet the same depositors were guaranteed in full by the taxpayer.

The banks should have been let go bust and the bondholders and ordinary depositors with more than €20k should have lost their money.

Brendan
 
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