The story of an Irish bankrupt in Scotland
- Thread starter Brendan Burgess
- Start date
Leinster70, congratulations on your award. I'm happy to have been of some help. Just imagine what life will be like this time next year!
Arcamsolo - I am on the home straight now and am delighted I have made the move. In answer to your question, I would have no hesitation whatsoever in recommending it to others.
I compared the English system to the Scottish system and for me, the Scottish system was much more favourable. I have blogged about this and I note there is also a thread on this from another poster: http://www.askaboutmoney.com/showthread.php?t=186532
Even if the referendum was to pass they wouldn't formalise independence for Scotland until the Spring of 2016 which is 18 months away.
Pat2 - the legislation you refer to was published over 12 months ago. I checked with my adviser and his opinion is that there is nothing to worry about. As you said yourself, it's important to take the right advice regardless of which bankruptcy option you choose.
Arcamsolo - I am on the home straight now and am delighted I have made the move. In answer to your question, I would have no hesitation whatsoever in recommending it to others.
I compared the English system to the Scottish system and for me, the Scottish system was much more favourable. I have blogged about this and I note there is also a thread on this from another poster: http://www.askaboutmoney.com/showthread.php?t=186532
Even if the referendum was to pass they wouldn't formalise independence for Scotland until the Spring of 2016 which is 18 months away.
Pat2 - the legislation you refer to was published over 12 months ago. I checked with my adviser and his opinion is that there is nothing to worry about. As you said yourself, it's important to take the right advice regardless of which bankruptcy option you choose.
RichInSpirit
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Best wishes for the future
I think IB2013 must be crossed the finish line re his bankruptcy. No new blog entries since 7 October.
Best of luck in the future Irish Bankrupt, if you're still reading here. Take the world by storm.
I think IB2013 must be crossed the finish line re his bankruptcy. No new blog entries since 7 October.
Best of luck in the future Irish Bankrupt, if you're still reading here. Take the world by storm.
You are correct, Rich in Spirit. I have recently completed my year of Scottish bankruptcy and and have now been successfully discharged. To say I am relieved and delighted would be putting it mildly.
I will occasionally blog as to what life is like on the far side of bankruptcy as I am aware that there are many people who are looking to see how I get on before making a decision themselves.
You are correct, Rich in Spirit. I have recently completed my year of Scottish bankruptcy and and have now been successfully discharged. To say I am relieved and delighted would be putting it mildly.
I will occasionally blog as to what life is like on the far side of bankruptcy as I am aware that there are many people who are looking to see how I get on before making a decision themselves.
Well done IB2013. You've finally reached the finish line. I hope it's all uphill from here on. You have been an inspiration. Keep up the blog. Would love to know how you get on in the future.
You are correct, Rich in Spirit. I have recently completed my year of Scottish bankruptcy and and have now been successfully discharged. To say I am relieved and delighted would be putting it mildly.
I will occasionally blog as to what life is like on the far side of bankruptcy as I am aware that there are many people who are looking to see how I get on before making a decision themselves.
I am delighted for you, and hope the future shines bright for you. It was a pleasure to read your blog, which you put so eloquently in depicting the disparity of what people are going through and essentially the on going failures of the system in Ireland. Once again, we never get help from our own..Nothing ever changes.
I hope all is well and enjoy the economic freedom!!
Thanks very much for the good wishes, to be honest it’s almost surreal. You spend ages wishing and dreaming for something and then, on the stroke of midnight it is handed to you on a plate. Boom! As I’ve said in the blog it hasn’t been painless but compared to the situation I was previously in, it’s the best thing I could have done.
I mentioned previously in the blog that it has a certain lifespan and from here on, I will not be blogging as frequently. Nobody for example cares what I think about the water charges! However I will post updates on how life has been post-bankruptcy. I will open a bank account, apply for a small loan and check my credit score to see how it goes.
The other thing I would like to do is to thank Brendan Burgess for providing the platform for myself and thousands of others to discuss bankruptcy. When I started the blog I emailed Brendan who kindly started this thread.
As I have said many times to people who are in financial turmoil, do your homework and draw up a plan. Do what’s right for you. If you want to go through the Irish process, do it. If you would prefer to go to the UK (England/ Wales), go there. In my case I chose Scotland as in my opinion it’s the easiest and fastest system to get through. Just remember, doing nothing is not an option.
[broken link removed]
I mentioned previously in the blog that it has a certain lifespan and from here on, I will not be blogging as frequently. Nobody for example cares what I think about the water charges! However I will post updates on how life has been post-bankruptcy. I will open a bank account, apply for a small loan and check my credit score to see how it goes.
The other thing I would like to do is to thank Brendan Burgess for providing the platform for myself and thousands of others to discuss bankruptcy. When I started the blog I emailed Brendan who kindly started this thread.
As I have said many times to people who are in financial turmoil, do your homework and draw up a plan. Do what’s right for you. If you want to go through the Irish process, do it. If you would prefer to go to the UK (England/ Wales), go there. In my case I chose Scotland as in my opinion it’s the easiest and fastest system to get through. Just remember, doing nothing is not an option.
[broken link removed]
epicaricacy
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Hello IB2013
I'm wondering what were the reasons you decided to wait until December 2013 to petition for bankruptcy when you had been in Scotland establishing your Centre of Main Interest from June / July 2013? Or to put it another way - why wait an additional 2 or 3 months on top of the 3 month period that you are now proposing to other people on your blog and in AAM - especially when you had professional help from a Scottish Insolvency Specialist throughout?
I would also like to know why your Insolvency Specialist thought it necessary for you to remain in Scotland for another 4 and half months after being declared bankrupt - before advising you that it was safe for you to go home.
According to your Blog - you spent 10 months in total in Scotland followed by another 6 months in Ireland - amounting to 16 months in total before being discharged.
I presume you're aware of the The Bankruptcy and Debt Advice (Scotland) Bill that is currently progressing through Scottish Parliament and is expected to be enacted into law in April 2015. The very controversial Bill is heavily weighted in favour of the creditors (banks) as it was perceived that debtors (bankrupts) were having too easy a ride up to now. Some of the amendments - already agreed by Parliament - will make Scottish Bankruptcy less attractive to potential bankrupts.
The particular amendments that seem most troubling include:
(1) Extending the IPO period from 3 years to 4. (It's 3 years in Eng / Wales and 5 years in Ireland)
(2)If the bankrupt acquires assets ( e.g. inheritance) post-bankruptcy - the assets will remain with the trustee for 4 years (as opposed to 1 year). This is not the case in Eng / Wales.
I'm wondering what were the reasons you decided to wait until December 2013 to petition for bankruptcy when you had been in Scotland establishing your Centre of Main Interest from June / July 2013? Or to put it another way - why wait an additional 2 or 3 months on top of the 3 month period that you are now proposing to other people on your blog and in AAM - especially when you had professional help from a Scottish Insolvency Specialist throughout?
I would also like to know why your Insolvency Specialist thought it necessary for you to remain in Scotland for another 4 and half months after being declared bankrupt - before advising you that it was safe for you to go home.
According to your Blog - you spent 10 months in total in Scotland followed by another 6 months in Ireland - amounting to 16 months in total before being discharged.
I presume you're aware of the The Bankruptcy and Debt Advice (Scotland) Bill that is currently progressing through Scottish Parliament and is expected to be enacted into law in April 2015. The very controversial Bill is heavily weighted in favour of the creditors (banks) as it was perceived that debtors (bankrupts) were having too easy a ride up to now. Some of the amendments - already agreed by Parliament - will make Scottish Bankruptcy less attractive to potential bankrupts.
The particular amendments that seem most troubling include:
(1) Extending the IPO period from 3 years to 4. (It's 3 years in Eng / Wales and 5 years in Ireland)
(2)If the bankrupt acquires assets ( e.g. inheritance) post-bankruptcy - the assets will remain with the trustee for 4 years (as opposed to 1 year). This is not the case in Eng / Wales.
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Hello epicaricacy,
The blog post that details the receipt of my award of bankruptcy was dated December 20th. Therefore had it been blogged in real time, I would only be in month 10 of my year and would not yet be discharged.
For the avoidance of doubt, I started posting the blog months after I had been declared. It tells the story of my bankruptcy.
As regards my decision to remain in Scotland for 6 months after being declared bankrupt, that again was my decision. Whilst the accepted practice is to stay for approx 3 months, some people remain away for the full duration of their bankruptcy, e.g. Ivan Yates. On the other hand, I know of people who returned to Ireland immediately after their interview. Being the cautious type I decided on 6 months.
I am in regular contact with a number of bankruptcy professionals in Scotland who have assured me on many occasions that with proper planning and case management, any changes to Scottish bankruptcy law will not pose a problem to those considering bankruptcy in Scotland.
Ciarán [broken link removed]
The blog post that details the receipt of my award of bankruptcy was dated December 20th. Therefore had it been blogged in real time, I would only be in month 10 of my year and would not yet be discharged.
For the avoidance of doubt, I started posting the blog months after I had been declared. It tells the story of my bankruptcy.
As regards my decision to remain in Scotland for 6 months after being declared bankrupt, that again was my decision. Whilst the accepted practice is to stay for approx 3 months, some people remain away for the full duration of their bankruptcy, e.g. Ivan Yates. On the other hand, I know of people who returned to Ireland immediately after their interview. Being the cautious type I decided on 6 months.
I am in regular contact with a number of bankruptcy professionals in Scotland who have assured me on many occasions that with proper planning and case management, any changes to Scottish bankruptcy law will not pose a problem to those considering bankruptcy in Scotland.
Ciarán [broken link removed]
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epicaricacy
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Hello IB2013
You make it very clear in your blog entitled 'The Meeting' that it was your insolvency specialist who called you to a meeting to inform you that it was safe for you to return to Ireland. Why did he believe you had to wait 6 months after being declared bankrupt before it was safe for you to return to Ireland? I'm a little confused - was your decision to wait 6 months post-bankruptcy before returning to Ireland - due to you being a 'cautious type' or was it, as your blog suggests, as a result of your Insolvency Specialist's advice? (B.T.W I never realised that your blog was retrospective. The way it's written suggested a contemporaneous unfolding of events)
The 2 amendments I wrote about in my previous post would certainly make Scotland less desirable.
(1) The four year Debtor Contribution Order (DCO) that will be replacing the 3 year IPO will have a massive effect on anyone who has one attached to his / her bankruptcy. In the UK, an average of 20% of bankrupts receive an IPO - often at the discretion of individual trustees / ORs if they decide that your monthly income exceeds your outgoings by a sum greater than £20. The really nasty aspect of the new Scottish DCO is that one has to make 48 monthly payments to the trustee no matter what. If one loses his / her job and can't pay the monthly payments - the DCO will be frozen until the person returns to work. The net effect is that the 4 years can become four and half years or longer. In addition, the Trustee or any other interested party (i.e. creditor) can request to have the DCO monthly contribution increased. (The IPO system in Eng / Wales lasts for a total of 3 years regardless of whether you lose your job or not)
You make it very clear in your blog entitled 'The Meeting' that it was your insolvency specialist who called you to a meeting to inform you that it was safe for you to return to Ireland. Why did he believe you had to wait 6 months after being declared bankrupt before it was safe for you to return to Ireland? I'm a little confused - was your decision to wait 6 months post-bankruptcy before returning to Ireland - due to you being a 'cautious type' or was it, as your blog suggests, as a result of your Insolvency Specialist's advice? (B.T.W I never realised that your blog was retrospective. The way it's written suggested a contemporaneous unfolding of events)
The 2 amendments I wrote about in my previous post would certainly make Scotland less desirable.
(1) The four year Debtor Contribution Order (DCO) that will be replacing the 3 year IPO will have a massive effect on anyone who has one attached to his / her bankruptcy. In the UK, an average of 20% of bankrupts receive an IPO - often at the discretion of individual trustees / ORs if they decide that your monthly income exceeds your outgoings by a sum greater than £20. The really nasty aspect of the new Scottish DCO is that one has to make 48 monthly payments to the trustee no matter what. If one loses his / her job and can't pay the monthly payments - the DCO will be frozen until the person returns to work. The net effect is that the 4 years can become four and half years or longer. In addition, the Trustee or any other interested party (i.e. creditor) can request to have the DCO monthly contribution increased. (The IPO system in Eng / Wales lasts for a total of 3 years regardless of whether you lose your job or not)
epicaricacy
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Hello IB2013
(2) What about the amendment that allows the trustee to maintain post-bankruptcy inheritances (e.g. parents' house) for 4 years (previously 1 year). All the planning in the world won't be able to prevent this from happening. Why would anyone with a potential inheritance decide to choose Scotland over the other jurisdictions? Why would Parliament have included this amendment, if it didn't plan on using it against the bankrupt?
In conclusion, the Scottish Insolvency legislation - that will come into force in the next number of months - seems designed to keep the bankrupt on the hook for longer.
(2) What about the amendment that allows the trustee to maintain post-bankruptcy inheritances (e.g. parents' house) for 4 years (previously 1 year). All the planning in the world won't be able to prevent this from happening. Why would anyone with a potential inheritance decide to choose Scotland over the other jurisdictions? Why would Parliament have included this amendment, if it didn't plan on using it against the bankrupt?
In conclusion, the Scottish Insolvency legislation - that will come into force in the next number of months - seems designed to keep the bankrupt on the hook for longer.
For the vast majority of people considering bankruptcy, inheritances are not an issue. If however it was to arise either during bankruptcy or post bankruptcy, of course you should choose whatever option is most favourable to your circumstances.
That is why I have always said you should get the best advice before entering into the process. Any competent adviser would ask you questions of this type before you entered the process and if it was a potential problem you would have to look at the alternatives. In my case, the option of bankrupting myself in the UK was available but not as attractive as the Scottish option. Had the UK been more attractive I would have chosen it instead.
www.irishbankrupt.ie
That is why I have always said you should get the best advice before entering into the process. Any competent adviser would ask you questions of this type before you entered the process and if it was a potential problem you would have to look at the alternatives. In my case, the option of bankrupting myself in the UK was available but not as attractive as the Scottish option. Had the UK been more attractive I would have chosen it instead.
www.irishbankrupt.ie
epicaricacy
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Brendan Burgess
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Hi epi
Most people have a fairly good idea if they are going to get an inheritance in the near future or not.
I don't think that those in mortgage distress through buying at the boom are likely candidates for bankruptcy. They probably have a tracker mortgage, so they can meet their repayments.
Most people who opt for bankruptcy have a number of investment properties or big business debt. If they are aged 60 and have a 90 year old father who will be leaving them €1m, they need to choose the system to be out free as quickly as possible.
If they are 35 years old with two 60 year old parents in the best of health, then it should not be a factor.
But what I would like to see is a table comparing the pros and cons in all four locations - Ireland, England & Wales, Northern Ireland and Scotland.
Most people have a fairly good idea if they are going to get an inheritance in the near future or not.
I don't think that those in mortgage distress through buying at the boom are likely candidates for bankruptcy. They probably have a tracker mortgage, so they can meet their repayments.
Most people who opt for bankruptcy have a number of investment properties or big business debt. If they are aged 60 and have a 90 year old father who will be leaving them €1m, they need to choose the system to be out free as quickly as possible.
If they are 35 years old with two 60 year old parents in the best of health, then it should not be a factor.
But what I would like to see is a table comparing the pros and cons in all four locations - Ireland, England & Wales, Northern Ireland and Scotland.
That's a very broad statement Brendan...
epicaricacy
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Hi Brendan
My wife and I bought our home in Cork in the 2nd quarter of 2006 and tracker mortgages were a thing of the past at that stage - certainly in PTSB. I personally know several people who bought in 2006 / 2007, are now struggling due to the fact that either the husband or the wife has lost his / her job, are all on SVR mortgages, many in restructured agreements, everyone deep in negative equity, responsible for children that they didn't have in 2006, some are planning voluntarily surrenders, some are selling their homes on behalf of the banks. All of us are in our 40s and all of us couples have parents in their mid 70s with their own houses paid off. The talk centres around which insolvency system to avail of.
The amendment to the Scottish Insolvency System regarding the trustee being able to re-open a bankruptcy case - after discharge, in the event of someone inheriting a parent's house is a significant issue - especially when one can avoid this by choosing to bankrupt themselves in England / Wales.
The average mortality rate for an Irish male is 78 and for a female is 83. Few enough reach 90. I believe that the profile of Irish people seeking bankruptcy will alter dramatically in the coming years.
My wife and I bought our home in Cork in the 2nd quarter of 2006 and tracker mortgages were a thing of the past at that stage - certainly in PTSB. I personally know several people who bought in 2006 / 2007, are now struggling due to the fact that either the husband or the wife has lost his / her job, are all on SVR mortgages, many in restructured agreements, everyone deep in negative equity, responsible for children that they didn't have in 2006, some are planning voluntarily surrenders, some are selling their homes on behalf of the banks. All of us are in our 40s and all of us couples have parents in their mid 70s with their own houses paid off. The talk centres around which insolvency system to avail of.
The amendment to the Scottish Insolvency System regarding the trustee being able to re-open a bankruptcy case - after discharge, in the event of someone inheriting a parent's house is a significant issue - especially when one can avoid this by choosing to bankrupt themselves in England / Wales.
The average mortality rate for an Irish male is 78 and for a female is 83. Few enough reach 90. I believe that the profile of Irish people seeking bankruptcy will alter dramatically in the coming years.
Brendan Burgess
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Hi Sarenco
It was a response to this
Most of these are paying their mortgage. Most of those who are in distress who engage with the lender are getting deals. They are simply not candidates for insolvency either here or in the UK.
There is misapprehension that the insolvency service is going to sort out the home loan arrears problem or the home loan negative equity problem. It's not.
It was a response to this
Most of these are paying their mortgage. Most of those who are in distress who engage with the lender are getting deals. They are simply not candidates for insolvency either here or in the UK.
There is misapprehension that the insolvency service is going to sort out the home loan arrears problem or the home loan negative equity problem. It's not.
Understood Brendan but I would suggest that there are in fact many people in mortgage distress that bought in boom that would be likely candidates for bankruptcy (or at least they would be if we had a rational bankruptcy system). The various forbearance schemes currently being negotiated will, in my opinion, only be to the advantage of a minority of borrowers over the long term from a purely financial perspective.
Brendan Burgess
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I am interested in seeing a list of the pros and cons of the bankruptcy systems currently in operation. Some might be more "rational" than others, but that is a separate debate.
In other countries, if you don't pay your mortgage, your home is repossessed and everyone moves on. I doubt if you will find any other country where the banks have restructured loans to the extent that the Irish banks have. That is a far better solution for the vast majority of borrowers than bankruptcy.
Voluntary sale followed by a Debt Settlement Arrangement or bankruptcy will suit some people, but not many.
Brendan
epicaricacy
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'There is misapprehension that the insolvency service is going to sort out the home loan arrears problem or the home loan negative equity problem. It's not.[/QUOTE]
Brendan
Neither my friends nor I are under this misapprehension. We've realised it's time to be dispassionate about the decisons that need to be made. We want certainty as opposed to the 'extend and pretend' approach. We're educated / informed enough to know that split mortages, interest only etc. really only make sense if the asset is rapidly appreciating in value (e.g. Dublin). We don't have an irrational attachment to a property bought for 370,000 on a 100% mortgage at the peak of the boom - that's now worth 140,000. We're not interested in lectures about individual sacrifices for the greater good of the country.We'll make decisions premised on what's correct for us. Eng / Wal Bankruptcy makes sense if a lump sum PIA is rejected. Scottish Bankruptcy doesn't make sense because of the new Debtor Contribution Oder or the Trustee's ability to re-open bankruptcy post discharge in case of family inheritance.
Brendan
Neither my friends nor I are under this misapprehension. We've realised it's time to be dispassionate about the decisons that need to be made. We want certainty as opposed to the 'extend and pretend' approach. We're educated / informed enough to know that split mortages, interest only etc. really only make sense if the asset is rapidly appreciating in value (e.g. Dublin). We don't have an irrational attachment to a property bought for 370,000 on a 100% mortgage at the peak of the boom - that's now worth 140,000. We're not interested in lectures about individual sacrifices for the greater good of the country.We'll make decisions premised on what's correct for us. Eng / Wal Bankruptcy makes sense if a lump sum PIA is rejected. Scottish Bankruptcy doesn't make sense because of the new Debtor Contribution Oder or the Trustee's ability to re-open bankruptcy post discharge in case of family inheritance.