Will banks chase the debt?

T

the pops

Registered User
Messages
14
My next door neighbour is from Australia, husband is Irish and they both lost their jobs about 2 years ago. He was a plasterer and she worked for a company that did sourcing for Dell. They used up all their savings to cover the mortgage (variable rate) and after trying unsuccessfully to rent out the house for a reasonable amount, they have decicded to sell and move to Australia as things here are not going well for them.

Anyway the house is in negative equity by about 50k (bought at 250k) and they are pricing accordingly and there has been some interest. The bank have said they will not release the keys until the debt is fully repaid but anecdotal evidence suggests they will turn the remaining amount into a personal loan if pushed. Now she has basically said to me that if they sell and are left with this 50k shortfall that they dont intend to pay it once they get to Australia as they will not be returning bar at christmases. She feels they gave the bank all their personal savings once and do not intend to do it again.

Is this actually possible for them? Surely the bank will chase them to Australia for the 50k? It is a lot of money in my eyes. I have mixed feelings on this as though they should pay the money back I see where they are coming from in that they lost everything trying to pay their way in the hope the work situation would improve, it didn't and now they have an opportunity to start again. But I suppose my main question is are banks willing to go abroad to chase their money?
 
I feel the bank may chase them. Australia is a country with a strong rule of law. But it's not easy for the bank... I'm unsure how the Australian courts would view it. There may be a reciprocal arrangement of some type, for chasing bad debtors.

Being married to an Ozzie isn't sufficient by itself for Ozzie residency.. so the husband could be booted out, in which case he may have to come back to Europe or Ireland.

Coming home for christmas may be a non runner, especially if you're found to be in contempt of court for not appearing at court cases, and a warrant is issued for your arrest,.. I don't know if that can happen. If it can you could be arrested at the airport. It would be very difficult for the bank to serve a summons on you though, but not impossible.

You have to be very careful not to identify yourself, as the banks likely read these forums.

I disagree with what you're doing, but understand that it may be the only way. The bank may refuse to release the deeds, especially if they know that both people are unemployed, and one of the people is Australian.
 
In fairness Joe I don't mind who reads the post as it is nothing to do with me. I am talking about my neighbour. I was just opening the issue up for debate. I personally think for an amount of 50k the bank would be motivated enough to pursue them, but I could be wrong
 
And what if the bank don't consent to any sale? Then it wont just be 50k that be the problem!
 
Coming home for christmas may be a non runner, especially if you're found to be in contempt of court for not appearing at court cases, and a warrant is issued for your arrest,.. I don't know if that can happen. If it can you could be arrested at the airport. It would be very difficult for the bank to serve a summons on you though, but not impossible.
Click to expand...
Rubbish. Unless a person has had notice of the proceedings they cannot be arrested under any circumstances. Also the case would never get to a committal stage with the person abroad. Also the Gardaí do not keep a list of debtors at the airport, believe it or not they have much better things to be dealing it. The OP's neighbour would have no problems coming home for holidays.
 
If they manage to sell and convert negative equity to an unsecured personal loan, it might be worth for them to move to Britain first and get bankrupt there, before starting a new life in Australia.

However, I am not sure but the husband's bankruptcy could then prevent him getting Australian residency.

I really feel they should do some research first, consult with international lawyers, to decide on the best course of action, rather than just blindly deciding not to pay, no matter what, as it could backfire.
 
Time said:
Rubbish. Unless a person has had notice of the proceedings they cannot be arrested under any circumstances. Also the case would never get to a committal stage with the person abroad. Also the Gardaí do not keep a list of debtors at the airport, believe it or not they have much better things to be dealing it. The OP's neighbour would have no problems coming home for holidays.
Click to expand...

I did think it unlikely myself that a "wanted" poster would be up in Dublin airport. I do think a reciprocal agreement between the Irish and Australian courts could be more likely as both are common law countries. But again I am only guessing
 
Greta said:
If they manage to sell and convert negative equity to an unsecured personal loan, it might be worth for them to move to Britain first and get bankrupt there, before starting a new life in Australia.

However, I am not sure but the husband's bankruptcy could then prevent him getting Australian residency.

I really feel they should do some research first, consult with international lawyers, to decide on the best course of action, rather than just blindly deciding not to pay, no matter what, as it could backfire.
Click to expand...

I think you have to be living and working in the UK for a year to enter bankruptcy procedeures. If they can work there then the bank would not allow them to go bankrupt
 
What they need to do now is get the bank's agreement to sell so that most of the debt is paid off. The bank may agree to the negative equity being transferred into a personal loan, but at the current mortgage rate and maybe even the current term which would be a very doable amount and could no doubt be done from Australia. Banks are doing deals but it's not publicised. Naturally enough they had better not mention Oz but the fact one of them is non national will make the bank suspicous.

In relation to doing a runner many people have left, we have had no evidence of banks chasing debtors to Oz. For 50K it wouldn't make sense. Costs would outweight benefit to the bank.

Nobody will ever be arrested at the airport returning to Ireland for debt issues. There is not one person who has a warrant for arrest in relation to debt. They cannot even get Michael Lynn. Even if there was a warrant for someone, you'd want to be an axe murderer before you would be arrested coming through airports.

When they are in Oz they will find many Irish who have done the same thing. It would be helpful to others on here if you could report back on how they deal with the bank, the sale, and leaving Ireland.

To what end does it serve a bank to chase two unemployed people who cannot afford to repay 50K. If we had a proper bankruptcy system in Ireland this couple would be able to sell the house and write off the 50K and start a new life after a short 'punishment' time. People need to move on with their lives.

For their own peace of mind if they manage to get the bank to do a deal on low repayments on the loan, they might as well pay it off over time to have a clean slate. Hope things work out for them.
 
Indeed Cruzer some people think the banks have the resources of the CIA to track people down.

The banks can't even find people in Ireland that have abandoned ship let alone Australia. Some people give the banks far more credit than they deserve.
 
Nevertheless it doesn't mean that in a couple of years when the banks have sorted out the current mess that they start chasing people to Oz, or selling the debt to people who can chase the debt.

Remember the UK bubble of the eighties. People handed back the keys. Banks 'wrote' off the debt. Then people suffered for a while, recession ended, they got jobs and purchased again and what happened? Before the statute of limitations was up the Banks starting chasing those who had done well for themselves.

So those that go take note, make sure the time limit has run out before you buy assets or come back etc. And if having become citizens/naturalised/ etc in Oz look into going bankrupt there on your Irish debt as you never know you might want to come back.
 
Of course the banks themselves appear incompetent,.. but they'll eventually figure out how to open the yellow pages and call in a professional, international debt collecting agency, which has contracted solicitors in the major countires, and experience of the different court systems, and private investigators to locate people and serve summons. The debts will likely be large enough for that. Do such international debt agencies exist?

Or it could be that you cannot get blood from stones, and that writing off debts is more practicable.

It's just so terrible the situation, that many people simply cannot afford to pay, because the debts are unrealistically large.
 
It's a big problem if we don't have a system of identifying people with arrest warrants when they use their passport to enter the country.

How do we stop terrorism? Surely it's possible to attach warrants to passport numbers?

If you are served a summons in a foreign jurisdiction, and fail to appear in court, can you be found to be in contempt of court and a warrant issued for your arrest?

It's not a debtor the police are looking for, it's someone with an arrest warrant for contempt of court. Are arrest warrants graded in any way, i.e very serious offences as opposed to others? People charged with murder and hiding in non-extradition countires?, we must have a system for identifying them on re-entry.
 
I am saying banks will always chase debts to Australia but I am aware of cases where they have. They can get judgemnents here and have then enforced in Australia and I have also heard cases of where an Irish debt was passed on to an Australian debt collection agency.
 
If you are served a summons in a foreign jurisdiction, and fail to appear in court, can you be found to be in contempt of court and a warrant issued for your arrest?
Click to expand...
Wrong Joe on so many counts. Arrest warrants are not issued for failing to turn up for civil cases. You cannot be served an Irish summons overseas esp in relation to civil matters like a debt. That person is outside the jurisdiction of the Irish courts and is under no compulsion to attend. That is why they have to enforce where the person is resident.

Found this on another forum and it applies equally to irish debts.
There is no recipricol arrangement between Australia and the United Kingdom over personal debt in the UK and that also works for debt run up in Australia being unenforcable in the UK. The two countries operate very differently in terms as to how credit is applied.

Neither will affect the credit rating in another country because of jurisdiction and the seperate laws that operate in terms of personal credit though will really mess up the rating in the country in which it was taken. A source at Baycorp who is Australia's equal to that of Experian who tells me the following.

Though it may be possible to find people, it is a prohibitively expensive route for most UK lenders and any costs using an Australian agent to pester you a bit are non recoverable and debt is usually written off or suspended in anticipation that you may return to the country in which it was run up.

Even if an Australian agent is used to try and get the money back, laws in Australia prevent them from being excessive or intrusive unlike the UK but they have no power of collection. For an agent to tell you it is enforcable or it can affect your Australian credit rating, is a serious offence under Australian law the same as laws in the UK are designed - though inadequately in comparison - to prevent such occurances.

As it is personal debt, you cannot be extradited over it because it is beyond jurisdiction. The only exception to recipricol arrangement so far as owing money is concerned is anything thing to the government directly in issues related to revenue and customs or other government agencies i.e. tax, child support etc.

It really is a matter of conscience.
Click to expand...
 
You don't need recipricol agreements over personal debt. Court Judgements just need to be enforceable in the jurisdiction involved and they can be.
 
Indeed, but how do you get a judgement here if you cannot properly serve the people involved?

People often fail to grasp the fact that the costs of enforcing in a foreign jurisdiction are often prohibitively large for a bank not to bother. Why waste all that money if you still won't get paid at the end of the day?
 
Some very interesting responses on this issue and I just wanted to post an update. The couple received an offer but as it turned out the buyers were not mortgage approved so back to the waiting game. In terms of what they are planning to do or not to do as the case may be, the plan is still Australia and they are starting to set things up on that end. She is already likely to be employed in her old company when she goes back as it is still run by the same people and she is still on very good terms with them. Plus no sign of a recession there so they are hiring (god do you think we will ever be able to utter those words again in Eire!!!).

She said she has every intention to stay for the duration to sell the house for the most reasonable price possible so as nobody bank included gets left with a bad shortfall, but in terms of paying back any shortfalls post sale they are not interested though they will obviously not utter a word of that to the bank.
 
Sunny said:
I am saying banks will always chase debts to Australia but I am aware of cases where they have. They can get judgemnents here and have then enforced in Australia and I have also heard cases of where an Irish debt was passed on to an Australian debt collection agency.
Click to expand...

Can you give more info on this Sunny?
 
You must log in or register to reply here.
Back
Top