Advised a friend to walk away from their mortgage

Lumen

Lumen wrote: »

What are the actual consequences of being declared bankrupt in Ireland?

Presumably the bank has no rights over future assets, so you just have a really really bad credit rating. Who cares? Credit is entirely unnecessary.

I think I'd rather have a decade or two without credit cards and a mortgage rather than a decade or two of eating mashed potatoes.

In answer to my own question:

According to the Examiner’s Office of the High Court, anyone who is made a bankrupt in Ireland remains a bankrupt (even after death), unless they have been discharged by the court. This can happen in a variety of situations – for example after a 12-year period has elapsed (which is very long by international standards) – but only after enough money has been raised through the sale of their assets to cover the costs, fees, expenses and certain priority debts that have arisen in the bankruptcy.

I'm not sure how leaving the country helps.

seaniefr

ntlbell wrote: »

ah so because she doesn't want to live with a lodger into her 40's the general public should pick up the tab? I see.

Well nobody likes that particular fact but i guess we should unfortunately get used to the idea 'cause it ain't going away unless there is another boom around the corner.................:mad: maybe she should drop the problem at the bank's door and let them come up with a solution? Tell them she can only pay so much and doesn't have any more........?

mecanoman

Bubble....bubble pop. Damn speculators.... How many houses
do you need to be happy.

Gummy Panda

Wertz wrote: »

Alternative AH reply: Tell her I'll give her three fiddy for it.

three fiddy?

Wait a minute... Wertz isn't eight stories tall and a crustacean from the protozoic era. God damn loch ness monster stop trying to trick people!!

jackiebaron

veritable wrote: »

Walk away and let the tax payer bear the cost? Who does she think she is?
She made a bad decision and she should suffer the consequences. It's her own fault and you want us to pay for her. Disgraceful.

Excuse me but how the Fück does the taxpayer bear the cost of this? If you buy a car, can't keep up the payments and the thing is repossessed, how does the taxpayer have to ante up for this? I don't live in Ireland anymore so maybe I'm a bit out of the loop here but where I do live, if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

Quandary

Rabidlamb wrote: »

Irish banks wont pursue jack sh*t & you know it.
They are looking to lay off staff no set up special debt hunter departments.
Currently there's nothing to stop her visiting Ireland whenever she see's fit.
Even if she was lifted no judge would hold her pending trial.


The government may have to look at ways at preventing people like her from becoming life long criminals to the state.

Wow, i hope (for your friends sake) these are facts and not just assumptions you are making

Slydice

jackiebaron wrote: »

Excuse me but how the Fück does the taxpayer bear the cost of this?

jackiebaron wrote: »

it's the bank's problem, not Joe Public's.

we own the banks

or should I say

the banks own us now:mad:

My name is URL

jackiebaron wrote: »

if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

If everyone who is struggling with repayments does that how do you think it will affect the housing market, and by extension Joe Public?

mikemac

jackiebaron wrote: »

Excuse me but how the Fück does the taxpayer bear the cost of this? If you buy a car, can't keep up the payments and the thing is repossessed, how does the taxpayer have to ante up for this? I don't live in Ireland anymore so maybe I'm a bit out of the loop here but where I do live, if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

The Irish state owns a large percentage of some banks.
The OP's friend walks away and bank has to write off money as a bad debt.
Bank loses more money and a paying mortgage holder so the State and us taxpayers who own bank shares lose money.

jackiebaron

Rabidlamb wrote: »

Short story, a good friend bought a 2 bed apartment a few years ago & reckons she's in €150k negative equity.
Can only afford half the mortgage payment as she's split with the boyfriend & had a 15% pay cut on the back of a 10% cut last year.
The mortgage is in her name alone.

She could either struggle with this over the next 31 years of the mortgage or let it go now.
I tried to find her a viable alternative:
Interest Only = delaying the inevitable.
Single Lodger = still be well short of monthly mortgage payment.
Rent Whole Apartment = current rental would only yield just over half of mortgage.
Mabs = only renegotiate the debt, extends the problem further.

It boils down to the fact that she'll have no disposable income until she's into her 60's.
I've advised her to take the human approach & bail out now.
Ultimately the cost of this is ultimately borne by the tax payer but I still believe this to be her only course of action.
People will say that she signed for the 100% mortgage at 8 times her salary so tough.
That used to be my attitude too until it you see first hand what a mess it can make of a life.

What do people think, should she stay & pay her dues or give herself a second shot ?.

What does she do for a living?

jackiebaron

jackiebaron wrote: »

Excuse me but how the Fück does the taxpayer bear the cost of this? If you buy a car, can't keep up the payments and the thing is repossessed, how does the taxpayer have to ante up for this? I don't live in Ireland anymore so maybe I'm a bit out of the loop here but where I do live, if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

The banks are being bailed out by the taxpayers as they don't have enough cash to cover their losses.

stovelid

jackiebaron wrote: »

Excuse me but how the Fück does the taxpayer bear the cost of this? If you buy a car, can't keep up the payments and the thing is repossessed, how does the taxpayer have to ante up for this? I don't live in Ireland anymore so maybe I'm a bit out of the loop here but where I do live, if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

It's the stock response. Like your tax is actually a moral top-up credit that you can deplore the use of for things you don't agree with.

Although I guess if the bank in question is getting cash injections from the government (and by extension, us) then adding more toxic property to it doesn't help.

Cookie_Monster

another alternative is too ask the bank is she can pay every 2 weeks rather than every month. Cuts out a huge amount of interest in the long term and would reduce her payments

RoadKillTs

RoadKillTs wrote: »

It's both really. Selling someone a 100% mortgage on 8 times their salary is prity wreckless.

She must be a right thick to have taken that, I borrowed 4.5 times my annual wage back in 2005 and the mortgage was / is a significant proportion of my wage. I thought long and hard about it. How anyone borrows 8 times their salary is beyond me, unless they are on €140,000 plus a year as they can then arguably afford it as they have more disposable income after laying all the living bills etc. If she was on €40 to €80K /annum and borrowed 8 times her salary she is / was a nutter to be honest.

phill106

Cookie_Monster wrote: »

another alternative is too ask the bank is she can pay every 2 weeks rather than every month. Cuts out a huge amount of interest in the long term and would reduce her payments

Interesting, how does this work?

wyndham

Rabidlamb wrote: »

Irish banks wont pursue jack sh*t & you know it.
They are looking to lay off staff no set up special debt hunter departments.
......

Ever hear of debt collection agencies?

Wertz

Cookie_Monster wrote: »

another alternative is too ask the bank is she can pay every 2 weeks rather than every month. Cuts out a huge amount of interest in the long term and would reduce her payments

Isn't the only downside to that option that you need twice as much money in the short term? If she can't find the monthly payment now, how is she going to find two monthly payments, per month for the next ~15 yrs.

Also doesn't that reduce a lender's potential profit over the life of the loan and hence incur some type of financial penalty?

digme

My name is URL wrote: »

Yeah, sure lets all walk away from our financial responsibilities. The country won't be long recovering that way /s

are you going to live twice or something?

Slydice

wyndham wrote: »

Ever hear of debt collection agencies?

that's a good point

and given that in Ireland, you have a chance of having the viper collect your debt:
http://www.boards.ie/vbulletin/showthread.php?threadid=2055560545

who knows who could be coming at you if you move to another country:(

General Zod

perhaps she could talk to the bank and arrange lower payments for a period of time?

mfceiling

Rabidlamb wrote: »

5/10, that's why she's a "friend".
She could get a boyfriend in the UK & not be financially screwed.

Or she could stay in ireland get a new boyfriend and get screwed every day of the week......it's a win win

orourkeda

The simple fact is that anyone who walks away from a mortgage is commiting financial suicide.

If you bear in mind how difficult it is now to borrow money from most financial institutions in the current climate, if the OP friends just walks away they'll never be lent another cent as long as they live. Be in no doubt the bank will case them.

In addition, it wont solve their negative equity. Presumably they'll still have to cover any shortfall.

dearg lady

seaniefr wrote: »

Well nobody likes that particular fact but i guess we should unfortunately get used to the idea 'cause it ain't going away unless there is another boom around the corner.................:mad: maybe she should drop the problem at the bank's door and let them come up with a solution? Tell them she can only pay so much and doesn't have any more........?

Well yeah, she should do exactly that. It's a crappy situation but if she makes arrangements with the bank and continues to pay what she can afford, then eventually (yes, quite a while away) she will probably be able to sell and clear what's left of her mortgage. As tempting as leggin it is, I know I wouldn't like to think I could never ever come back to Ireland to live without being pursued for the debt. And indeed for a large amount like that she could potentially be pursued abroad.

TwoShedsJackson

Rabidlamb wrote: »

Irish banks wont pursue jack sh*t & you know it.
They are looking to lay off staff no set up special debt hunter departments.

Hahahaha, this is a prime example of 'I don't want it to be true so it isn't true' thinking. Of course the banks will pursue her, read the Irish Times on a Tuesday and see how many reposession cases there are in the court reports.

And after the house is sold you think the bank will just go 'oh well she owes us another 150k, sure we can't be bothered, let's just let her off'. Will they fu<k.

Rabidlamb

Quandary wrote: »

Wow, i hope (for your friends sake) these are facts and not just assumptions you are making

Hearsay & conjecture from Mick down the pub.
Immigration control hold no lists of debt defaulters plus 90% of the time your waved through anyway.

ntlbell

stovelid wrote: »

It's the stock response. Like your tax is actually a moral top-up credit that you can deplore the use of for things you don't agree with.

Although I guess if the bank in question is getting cash injections from the government (and by extension, us) then adding more toxic property to it doesn't help.

not exactly, banks don't lose.

If a bank has a high number of defaulters, wait a second! I'll just pop up an interest hike here, and interest hike there, these might not directly affect the tax payer but they do affect "joe public" or "joe mortgage holder" "joe car financer" etc etc

Richard tea

Your friend should, walk walk walk. Life is too short for all that financial crap hanging over her head. Thing will work themselves out in the end. The quicker this country hits rock bottom the better for all

ntlbell

jackiebaron wrote: »

Excuse me but how the Fück does the taxpayer bear the cost of this? If you buy a car, can't keep up the payments and the thing is repossessed, how does the taxpayer have to ante up for this? I don't live in Ireland anymore so maybe I'm a bit out of the loop here but where I do live, if you foreclose on your house or simply walk away from it, it's the bank's problem, not Joe Public's.

Where do you think the 30/40bn comes for nama to bail out banks?

fresh air?

digme

TwoShedsJackson wrote: »

Hahahaha, this is a prime example of 'I don't want it to be true so it isn't true' thinking. Of course the banks will pursue her, read the Irish Times on a Tuesday and see how many reposession cases there are in the court reports.

And after the house is sold you think the bank will just go 'oh well she owes us another 150k, sure we can't be bothered, let's just let her off'. Will they fu<k.

they stiffed us for billions and maybe billions more when they say oh we found out we need more money later on,**** the banks.

digme

ntlbell wrote: »

Where do you think the 30/40bn comes for nama to bail out banks?

fresh air?

well we have a choice actually, they got the loan doesnt mean we have to pay tax lol

digme

ntlbell wrote: »

Where do you think the 30/40bn comes for nama to bail out banks?

fresh air?

actually ya if we have no fresh air we die hence no tax payer

Quandary

Richard tea wrote: »

Your friend should, walk walk walk. Life is too short for all that financial crap hanging over her head. Thing will work themselves out in the end. The quicker this contry hits rock bottom the better for all

I hope my sarcasmometer is giving a valid readout on this...

wyndham

Rabidlamb wrote: »

Hearsay & conjecture from Mick down the pub.
Immigration control hold no lists of debt defaulters plus 90% of the time your waved through anyway.

Waved through where? Passport control in Dublin Airport? Do you think screening begins and ends with the man in the glass box? Thats merely an interception point.

Eircom_Sucks

move home to parents for a bit

rent out apartment and pay the diff every month yourself

danbohan

My name is URL wrote: »

Yeah, sure lets all walk away from our financial responsibilities. The country won't be long recovering that way /s

dont you love thease public servants talking about responsibilities !, bottom line is this countrys goverment / banks / developers have bankrupted this country , if i was in op postion or massive negative equity id walk away.

who what when

Rabidlamb wrote: »

Short story, a good friend bought a 2 bed apartment a few years ago & reckons she's in €150k negative equity.
Can only afford half the mortgage payment as she's split with the boyfriend & had a 15% pay cut on the back of a 10% cut last year.
The mortgage is in her name alone.

She could either struggle with this over the next 31 years of the mortgage or let it go now.
I tried to find her a viable alternative:
Interest Only = delaying the inevitable.
Single Lodger = still be well short of monthly mortgage payment.
Rent Whole Apartment = current rental would only yield just over half of mortgage.
Mabs = only renegotiate the debt, extends the problem further.

It boils down to the fact that she'll have no disposable income until she's into her 60's.
I've advised her to take the human approach & bail out now.
Ultimately the cost of this is ultimately borne by the tax payer but I still believe this to be her only course of action.
People will say that she signed for the 100% mortgage at 8 times her salary so tough.
That used to be my attitude too until it you see first hand what a mess it can make of a life.

What do people think, should she stay & pay her dues or give herself a second shot ?.

The most logical solution is just to pay what she can afford. If she's able to pay 100% now (with no disposable income), then she should consider paying 60-70% of the mortgage leaving her with 30-40% of the monthly payment as her disposable income.

Pro's- She can now start to live a normal life
Con's- She'l be stuck with the apartment for a long time.
Her credit rating will suffer (but not as badly as a total default).

Just send a letter to the bank stating the situation and what she can afford to pay. Then start paying this amount. The bank will then tell her thats not acceptable. Ignore them, no judge in the country would take the apartment from her if she explained the situation and if she showed she was making a reasonable attempt to pay the mortgage!

And look on the bright side, she's probably at rock bottom right now, things will improve!

Life is too short.. I'd be gone from Ireland forever. But i'd never be in the situation in the first place so that's irrelevant.

Feel sorry for her tbh. Why does she have a mortgage by herself? I thought people bought houses with spouses.

KillerShamrock

Ok first off this should be in the banking forum!

RANT START!

I dont agree with 100% mortgages at all they are the worst invention ever!!!!

Second this crap of products being mis sold is nothing but bull crap plain and simple!!!
If you look at the mortgage agreement you will see her signature in several places stating she read the T&Cs, that she understands what will happen if house prices go down and up and if she cant keep up her repayments what will happen!
So if she signed with out reading or getting professional advise from a solicitor or adviser and thinking the good times will roll on forever, she is the only one at fault here no one else

She is the fool for signing it in the first place and knowingly taking on something soo big by herself, she is also pretty silly (being nice) for taking advice from someone other than a qualified financial adviser/solicitor.

If she just ignores it and leaves it she is no better than the filth, fitzy and fingers, the banks and developers that got this country in this mess.

If enough people decide to just hand the keys back and leave, the banks will
start following people no matter where in the world they go or how many countrys they declare themselves bankrupt in!

She sounds like one of the many over molly coddled people in this country that think they can just run from their own mess, or mommy or daddy will help them out or can claim mis sold product and get away with it all, to do it all over again!!

If I defaulted on the few grand (less than 6) I owed i would be pursued and jailed.

She signed up for this she will get/ has gotten what she deserves! No sympathy tell her to get professional advise!
End of rant!

Rabidlamb

wyndham wrote: »

Waved through where? Passport control in Dublin Airport? Do you think screening begins and ends with the man in the glass box? Thats merely an interception point.

I'll tell you about screening in Ireland.
One of my neighbours was a car thief years ago & got a 2 year sentence.
He ran away from an open prison where he then worked the sites in London for nearly 12 years.
After he started a family he returned to Ireland & handed himself into a guard station.
They had no record of him so he was free to go.

Your honestly telling me that there'll be detectives hiding in the bushes outside your parents home at Christmas.
Remember, this is Ireland not CSI.

landsleaving

It amazes me how people can get on their high horse about these things. It could happen to anyone. This poor woman has been let down by her partner and her job. No to mention her government, for creating the situation she's in now. Not everyone is economic minded and just assumed that if the boom seemed to be going well, it wouldn't fail. Yes it was obvious to anyone with the right education, but the majority of people getting all high and mighty about this only realise in hindsight the fragility of our economic sitaution.

Like everyone else, she deserves to be happy, and if the solution isn't here, she should emigrate. The banks deserve to be saddled with the debt for duping people into believing they would always be able to afford their mortgages. As a naiton we were fooled into thinking that ownership of property implied safety from financial hardship, due to the value of the asset. The average person did not, and could not predict the massive fall in value of property, and the experts in the media simply ignored the fact for the most part. On top of that, this woman assumed there would be another person helping her foot the bill, and this perosn appears to have run off and saddled her with a mortgage she can't afford.

Simple fact is, its not entirely her fault, and she should make good her escape form this country and start again elsewhere, and make a better life for herself. You only live once, and it shouldn't be a life dictated by the fickle whims of the international economy.

As for the extra tax people suggests we'll have to pay. Firstly, as others have said, the banks can deal with it, and should have to deal with it. They took far bigger financial risks anyway. It won't actually affect the tax we pay. Second, if tax increases actually went directly toward helping people in situations like this, then I'd be happy to pay it. Simple as.

Rabidlamb, your friend deserves to be happy, tell her to get the hell out of Ireland and live her life somewhere far away from this mess.

Oh and no one will stop her leaving. Thats a frankly ridiculous statement.

sbsquarepants

Rabidlamb wrote: »

Irish banks wont pursue jack sh*t & you know it.
They are looking to lay off staff no set up special debt hunter departments.
.

Jesus christ, you give the worst financial advice ever!
Tell the truth, you told her this mortgage was a good idea didn't you?:)
Irish banks, even the ones getting bailouts, can and will pursue her for this money, for the rest of her life if neccesary, when her parents die and she presumably inherits a house, they will most likely take that one off her to cover the by then astronomical debt she will still owe.
Your friend has to face facts, she CAN NOT walk away from repaying a mortgage and expect there to be no consequences. Her best bet is to keep up the payments by whatever means neccesary, ie rent out the apartment and live with her parents or whatever and sit this mess out untill she is in a better financial position. This is unlikely to be any time soon and that is just how things are.
She is responsible for this, no matter how hard done by she feels.

DonJose

Rabidlamb wrote: »

Short story, a good friend bought a 2 bed apartment a few years ago & reckons she's in €150k negative equity.
Can only afford half the mortgage payment as she's split with the boyfriend & had a 15% pay cut on the back of a 10% cut last year.
The mortgage is in her name alone.

She could either struggle with this over the next 31 years of the mortgage or let it go now.
I tried to find her a viable alternative:
Interest Only = delaying the inevitable.
Single Lodger = still be well short of monthly mortgage payment.
Rent Whole Apartment = current rental would only yield just over half of mortgage.
Mabs = only renegotiate the debt, extends the problem further.

It boils down to the fact that she'll have no disposable income until she's into her 60's.
I've advised her to take the human approach & bail out now.
Ultimately the cost of this is ultimately borne by the tax payer but I still believe this to be her only course of action.
People will say that she signed for the 100% mortgage at 8 times her salary so tough.
That used to be my attitude too until it you see first hand what a mess it can make of a life.

What do people think, should she stay & pay her dues or give herself a second shot ?.

Given your friends dire financial state, the most important question at the moment is, does she swallow?

monkeypants

Rabidlamb wrote: »

That just means she'll be 64 instead of 63 or whatever when her mortgage is up.
The lodger idea was a floater for a while but she would still be short & living with a lodger probably well into her 40's.
Better to get out now.

Wasn't she going to end up in her sixties anyway, even if all had continued to go well, or did she see herself as magically paying the mortgage off early?

People are posting suggestions, but your responses suggest that your friend doesn't want to make any effort at all. As someone who's currently unemployed and finding it very difficult to make ends meet and keeping interest-only payments going, I do sympathise with anyone in a similar boat, but all your (her) input thus far boils down to "What's easiest for me?"

Quite frankly, I'm losing interest in this thread.

RoadKillTs

Given your friends dire financial state, the most important question at the moment is, does she swallow?

There is the AH response we were all waiting for.

Cookie_Monster

Wertz wrote: »

Isn't the only downside to that option that you need twice as much money in the short term? If she can't find the monthly payment now, how is she going to find two monthly payments, per month for the next ~15 yrs.

no, it means your monthly payment is broken in two. (or more correctly instead of 12 x €1000 per annum for example you pay 26x500)

Wertz wrote: »

Also doesn't that reduce a lender's potential profit over the life of the loan and hence incur some type of financial penalty?

yes, probably. Though the are getting money quicker too. Probably not ideal to renegotiate to it but if you can get it from the start its completely worth it.

Quandary

landsleaving wrote: »

It amazes me how people can get on their high horse about these things. It could happen to anyone. This poor woman has been let down by her partner and her job. No to mention her government, for creating the situation she's in now. Not everyone is economic minded and just assumed that if the boom seemed to be going well, it wouldn't fail. Yes it was obvious to anyone with the right education, but the majority of people getting all high and mighty about this only realise in hindsight the fragility of our economic sitaution.

Like everyone else, she deserves to be happy, and if the solution isn't here, she should emigrate. The banks deserve to be saddled with the debt for duping people into believing they would always be able to afford their mortgages. As a naiton we were fooled into thinking that ownership of property implied safety from financial hardship, due to the value of the asset. The average person did not, and could not predict the massive fall in value of property, and the experts in the media simply ignored the fact for the most part. On top of that, this woman assumed there would be another person helping her foot the bill, and this perosn appears to have run off and saddled her with a mortgage she can't afford.

Simple fact is, its not entirely her fault, and she should make good her escape form this country and start again elsewhere, and make a better life for herself. You only live once, and it shouldn't be a life dictated by the fickle whims of the international economy.

As for the extra tax people suggests we'll have to pay. Firstly, as others have said, the banks can deal with it, and should have to deal with it. They took far bigger financial risks anyway. It won't actually affect the tax we pay. Second, if tax increases actually went directly toward helping people in situations like this, then I'd be happy to pay it. Simple as.

Rabidlamb, your friend deserves to be happy, tell her to get the hell out of Ireland and live her life somewhere far away from this mess.

Oh and no one will stop her leaving. Thats a frankly ridiculous statement.

So basically its all the banks/her exes/her jobs fault and she should shoulder no responsibility and just be happy some where else? Oh come on :rolleyes:

At least let her take partial responsibility for the mortgage she signed up for by working something out with the bank.

My name is URL

landsleaving wrote: »

It amazes me how people can get on their high horse about these things. It could happen to anyone.

Rabidlamb, your friend deserves to be happy, tell her to get the hell out of Ireland and live her life somewhere far away from this mess.

Fair enough it could happen to anyone, but really.. running away from it isn't the right thing to do. And there's no high horse involved in that statement

The banks should have a system for dealing with people who are struggling to meet repayment obligations. A couple of years free from repayments would be better than skipping the country. If everyone in the same position as the OP's mate did that then the country will be in an even deeper hole, and frankly that isn't fair on the people who didn't go overboard when looking for mortgages and are in a position to repay them because of that

jackiebaron

My name is URL wrote: »

If everyone who is struggling with repayments does that how do you think it will affect the housing market, and by extension Joe Public?

So you're suggesting I should shackle myself with debt for the rest of my life and live in penury in order to protect the housing market for others???

And incidentally, everyone who has a mortgage is not struggling with repayments. How many houses were in existence in Ireland before, say 2000? I'm quite certain that the people living in them who have been making their payments for several years are ok. So a few thousand from the 2005 brigade welsh on the deal, it's not exactly going to result in a complete meltdown of the entire housing market.

Cookie_Monster

you'd also have to ask why the partner was not involved in the mortgage in such a situation. if he came along after and was just paying rent as such fine but otherwise sounds dodgy to me

landsleaving

Quandary wrote: »

So basically its all the banks/her exes/her jobs fault and she should shoulder no responsibility and just be happy some where else? Oh come on :rolleyes:

At least let her take partial responsibility for the mortgage she signed up for by working something out with the bank.

I said its not entirely her fault. Its not. She clearly can't work something out that isn't going to wreck her life, as the OP has made abundantly clear. She's going to be miserable for a very very long time, and mainly because of forces far outside her control. She deserves a second chance, and she won't get it in Ireland. Let her punishment be moving away from her friends and family, not financial problems until old age. She's shouldered enough responsibility, and the stress that entails long enough already. I can't help but feel so bad for her, she's probably going to end up with more problems due to the stress if she stays here and has to deal with that.