"Unsustainable mortgage"

Great advice on here from 100 different accountants and much better value and quality than anything youll pay for :)
Accountants are not really qualified in this area either and advice from Accountants can be just as hit and miss as anywhere else.
At least on AAM you get a lot of different views and anyone with a small bit of savvy can figure out the salient pieces of advice
from the more credible contributors
 
I would really appreciate if someone could recommend someone.

The general pointers on AAM has been most helpful thanks.
 
Grant Thornton seem to be lining themselves up to be one of the firms dealing with the new insolvency regime, they are holding seminars around the country for people working in associated areas finishing tomorrow I think. Was at one today in Limerick and it was very interesting, might be worth trying them.
 
Before trying anyone, one would need to know if one can afford it. I don't imagine Grant Thornton come cheap.

And I don't believe that someone with a bit of financial acumen cannot sit down and work out the best solution themselves. And help from someone impartial and competent in Mabs would be invaluable.
 
needtodo said:
Total - 4397

Combined income plus child benefit = 3,998

Both our families live in the same area. We don’t want anyone to know of our financial problems. What do we want to do in order of preference?

1. Remain in our home and negotiate with the bank a write down of the mortgage to a sustainable level.
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Unless I'm mistaken your outgoings with reduced mortgage is 4457 not 4397. On an income of 3998. So all your are doing is sinking. Perfect position to come to an arrangment with a bank I would have thought.

If option 1 is your favourite option why don't you try it. Make contact with your bank. Depending on the bank some of them are being realistic, arrange a meeting, have all your facts and figures and see what options they are amenable to. Until you know their current thinking you cannot move forward.

What is quite clear is that your mortgage is unstainable. Please have a realistic value of your house if you meet them. They will focus on that and your income and expenditure.

One last point, you along with many others are hiding your financial difficulties, I can understand why, but this is not healthy. I certainly hope you are talking to your families and that they realise the strain you are under. You are not alone, there are plenty of people right around you in the exact same situation but bottling it up is the worst thing to do. In addition it can make a marriage difficult and not only that you have 3 youngs kids. You need emotional as well as financial help and both are just as important.
 
I cannot move on off what idiots we were. We just got caught up in getting out of the city and buying a family home to start a family. I am ashamed of the decisions I made and the amount of savings and interest payments gone into this house which would have paid for a house by now. We didnt stop to think. Anyway, I need to deal with this now. many thanks for your post and advice.
 
My understanding of the new system is that the cost comes out of the pot of available monthly surplus that is to be paid to the creditors so effectively there is no extra cost to the person applying, the creditors bear the cost. I think there is no point paying anybody right now to do something for you when the new system is so close. You could put yourself on the list for a MABS appointment in the meantime although they will be of limited use as they will only be dealing with the under 20k debt but they may be able to advise a strategy to follow until PIPs are set up.
 
Hello Needtodo,

really sorry to hear about your circumstances,
but there are loads of people in similar.
we bought a house in co.Wexford , both lost jobes and found new ones in Dublin only, so I can understand that commuting costs are huge ...

I can not offer you way to reduce your mortgage repayments, but you might try to reduce your commuting costs by finding another persone with similar working shedule and share costs with them.

try website : carpool (sorry, can not post URL)- it is not common in Ireland (yet), but working...

another point - you might be eligible for GP visit card with your childcare and fuel costs as well.

childcare - we have 2 small kids, can not afford creche, but it is possible to find childminder in rural area - they are charging less ...

are there are any possibility to have an au-pair?

or rent a room ?
 
Dear Needtodo
Let me say that in your case, you need to stop worrying and resolve to focus on your future. In terms of the Personal Insolvency Act , your mortgage is the problem, followed by childcare costs and commuting.

Please refer to a website misc which allows one to calculate the income required to live in an urban or rural area depending children etc. Under the Insolvency Service, debtor expenditure may refer to that site, which is prepared by MABS and the Vincentien Partnership, to show the minimum income required to live a frugal but sustainable lifestyle.

I set out below assumptions, which may be wild, on which to base a proposal for a PIA.

You advised your income already of €3998 p.m., and I use that below, but it sounds like it would be cheaper to give up living in Carlow and move to Dublin, but that is a personal choice.

Statement of Affairs
One issue is the value of the PDH. Given its location, I assumed a 70% discount on the mortgage to €160k, as there has been no offers made. Also, I assume the discount is germane to a purchase in the peak of the housing market to arrive at a valuation. If the assumption is correct your SOA may be as follows: .

Stat. of
Affairs Secured Unsecured Total
Assets € € € €
PDH
Estimate 162,000 162,000 - 162,000
162,000 162,000 - 162,000

Liabilities
Mortgage 540,000 162,000 378,000 540,000
Credit Union 10,000 - 10,000 10,000
Credit Card 3,000 - 3,000 3,000
Bank Loan 6,000 - 6,000 6,000
559,000 162,000 397,000 559,000

Deficit - 397,000 - - 397,000 - 397,000 [/U]


Please note that UB will have voting control given they are the majority unsecured and only secured creditor.


Income and Expenditure

I set out below your surplus arising on income based on the misc site and compare the outcome under a PIA and Bankruptcy. The key assumption is that UB accept a write down to €160 k (the value of the security).

Under a PIA, I assume and propose UB grant you a 35 year mortgage at 3.69%. This will generate a surplus of €134 per month to pay the unsecured creditors. If UB accept that, they will share in the dividend of €9648 in total over 72 months, and may avoid legal and recovery costs. Furthermore, I assume that if you return to work, you may be able to offer more comfort that they have an affordable mortgage.

If UB veto the proposal, they will get nothing, as you will have to move to Dublin and l assume the rent there will deny the possibility of a dividend in bankruptcy.
PIA Bankruptcy
Income and Expenditure € €

Combined Income 3,998 3,998
Expenditure ex Rent/Mortgage 3,228 3,228
Available for Rent or Mortgage 770 770
Rent or Mortgage 636 770
Available for creditors per month 134 NIL

Dividend over 72 Months 9,648 NIL
Expenditure per Misc - ex Rent/Mortgage RURAL

RON
 
Dear all,

sorry I came unstuck in formattting my last mail on a comparison of the dividend on a PIA verus Bankruptcy. I hope I corrected that below.

"If UB veto the proposal, they will get nothing, as you will have to move to Dublin and l assume the rent there will deny the possibility of a dividend in bankruptcy.
PIA Bankruptcy
Income and Expenditure € €

Combined Income 3,998 3,998
Expenditure ex Rent/Mortgage 3,228 3,228
Available for Rent or Mortgage 770 770
Rent or Mortgage 636 770
Available for creditors per month 134 NIL

Dividend over 72 Months 9,648 NIL

RON
 
This is the list of our monthly bills:
House insurance – 60
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€720 a year for house insurance is very high almost double what I would have expected.

Income protection – 92
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Income protection is one of the first things I would have jettisoned,it works out at €1104 a year. Alot f those policies are not worth the paper they are written on.

Phone – 100 (this includes broadband for work)
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Shop around,Vodafone do land lines and BB from €40 pm

I know its not a lot but these savings add up also have you switched utility providers?
 
You need to act now and stop kicking the can down the road,
The rule of thumb is no more than 35% of your wage should go on your mortgage, at even the 1380/3998 comes in at the limit, 35%, but if you take the 2,500/3998 it is 62%,
You have done nothing wrong like so many others but just another casualty of this awful mess we find ourselves in.
You need to do what is best for you and your family, wait for the new bill and if you get no luck there then UK is the way to go,Not sure if you all would need to move to UK or maybe just one of the you would need to move to UK and become bankrupt. You you not deserve all this headache as it may have a bad ending on your health, So put yourself and family first and make a fresh start
 
need to do:On your expenditure, suggest check the Income Protection {see payment protection insurance thread} Sadly most income protection policies are not what they appear , so you maybe paying for (poor) cover.Likewise check your Life Insurance ,to make sure it suits your circumstances .
Nobody really knows how the Personal Insolvency will REALLY work. I would think {given the amount of genuine inability to pay when due} that the lenders will come to arrangements, call it (write-down,deferral,etc) or whatever.. eg have you pay on the portion you can fairly afford and park the rest , it could be that if you adhere to the new arrangement the residue is written off .ie YOU HAVE TO BE INCENTIVISED, otherwise the arrangements WILL fail. The Banks won,t like it but methinks ,IS THERE a VIABLE choice ??
 
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