Own house in Ireland and the UK - bankrupty?

dutchy21

Hey,
I'm Irish and have been living and working in the UK since 2003.
I bought a house in Ireland at the height of the Irish property boom and the house that I bought is now worth 50%/60% of what I paid for it, therefore in massive negative equity. I also own a house in the UK with my wife which we bought last year.
With plummeting rents in Ireland and the mass departure of a generation of people, it is highly unlikely that I will be able to continue to rent my house out in Ireland and therefore I won't be able to afford to pay the mortgage on that house plus the mortgage on the house in the UK.
I am constantly throwing money into what seems like a black hole in Ireland and with property prices still falling I feel it would be best to cut my losses and run!
Is filing for bankruptcy an option for me? If I do so would my house in Ireland and the UK be reposessed? I earn £46k and my wife earns £36k and as we would like to start a family sooner rather than later we feel that with the house in Ireland in our lives we may never be able to afford to have children. What can I do? I am very stressed about the whole thing and don't know what to do! Should I just stick it out and keep pouring money into this bad investment or should I try to sell up and walk away with a large debt and nothing to show for it? Or file for bankruptcy?
Anyone been in this situation before and knows what to do?
Please help!

M007

As you know from the charter one cannot get legal advice here.

But a few things which you should look at. The terms of your mortgage will dictate if you the property will be repossessed if you are declared bankruptcy. (Usually there is such a term I understand.)

If you declare yourself bankrupt in the UK it does effect your property here. Order is effective here under EU Regulations.

To declare yourself bankrupt in the UK you will have to apply in over there and show that that is where you have your "centre of main interest".

The period of bankrupty in the UK is 12 months compared to 12 years here in Ireland. ( There is a Bill proposed to change this to 3 yrs)

If you are having trouble with the banks regarding repayment of your mortgage your first port of call should be to contact the bank and seek to restructure your arrangements with them. Depending on your Mortgage provider they have to engage with you and should not attempt to repossess your property so long as you keep up some repayments. You should contact the Financial Regulators office to find out more about this.

Sorry to hear your story but there are numerous people like you.

Gurgle

Rephrase:
I borrowed money to make an investment, but the investment went bad so I don't want to repay the loan.
How do I dump my debts onto someone else (preferably the Irish taxpayer, as I don't live or work in the country)?

Suck it up and pay your debts.

kellso81

You bought a house here at the height of the boom when you didn't even live here? You then watched as the country and property market went into freefall. Knowing that your house was in huge negative equity in 2011, what did you do? Take out another mortgage and buy another house in another jurisdiction, hoping to leave the irish taxpayer with the debt you accumulated in Ireland. I believe the politicians and bankers of the celtic tiger era had a smaller role to play than the media portrays in a lot of went on, albeit still a significant one. But it's people like you who are the main reason this country is in the state it's in!

Procrastastudy

Gurgle wrote: »

Rephrase:
I borrowed money to make an investment, but the investment went bad so I don't want to repay the loan.
How do I dump my debts onto someone else (preferably the Irish taxpayer, as I don't live or work in the country)?

Suck it up and pay your debts.

He looks like he really genuinely can not to be fair - this happened to a few friends of the the family in the UK during the 80's. They litterally handed the keys back and said do your worst we're broke. I was under the impression Ireland was bringing in a scheme where this could be done?

One thng I would suggest is have you approached the bank to see if there is anything that can be done? Would they be willing to work with you in any way? As regards renters - I've actually heard there is some small demand for certain properties - I am in central Dublin though so...

I'm sure you've thought about this but even if you got renters in at a low rent and have to fork out some money each month you still have an asset there that will recover some of its value.

I wish you the best of luck - I'm afriad there's not much legal advise in there but I'd approach the bank and ask them for advice as well as a solicitor.

You bought a house here at the height of the boom when you didn't even live here? You then watched as the country and property market went into freefall. Knowing that your house was in huge negative equity in 2011, what did you do? Take out another mortgage and buy another house in another jurisdiction, hoping to leave the irish taxpayer with the debt you accumulated in Ireland. I believe the politicians and bankers of the celtic tiger era had a smaller role to play than the media portrays in a lot of went on, albeit still a significant one. But it's people like you who are the main reason this country is in the state it's in!

Just becuase we bailed out the banks for their utter stupidity and greed doesn't mean that people in default are sponging off the tax payers. At wrse they make the interest on my savings lower and mortgage interest higher. Banks managed to deal with repossestions and people getting out of their depth for years without the need of support from the tax payer. The banks are at least a culpable as this chap.

Gurgle

GCDLawstudent wrote: »

He looks like he really genuinely can not to be fair.

dutchy21 wrote:

I earn £46k and my wife earns £36k

My sympathy nerve ain't working today.

kellso81

GCDLawstudent wrote: »

The banks are at least a culpable as this chap.

Can I ask the OP did he declare this was an investment property to the bank on the original mortgage. Is he registered with the PRTB? Has he paid tax on the rent he's received since 2007? Did he inform the lender in the UK that he owned an investment property in another jurisdiction that was in significant negative equity when he was buying his second property? And finally, does his combined borrowings exceed four times his and his wife's combined earnings?

Procrastastudy

They will be getting eaten by Council tax in the UK and the base income taxes are higher. If his wife gives up work to have a family they are going to be down to his earnings or at least losing a massive portion of their combined earnings to care.

At least he's trying to deal with it before having kids rather than just squeezing them out and claiming a council house!

In a perfect world I would agree - you made the investment - you can't afford kids tough. It seems the biological imperative wins out most of the time...

Can I ask the OP did he declare this was an investment property to the bank on the original mortgage. Is he registered with the PRTB? Has he paid tax on the rent he's received since 2007? Did he inform the lender in the UK that he owned an investment property in another jurisdiction that was in significant negative equity when he was buying his second property? And finally, does his combined borrowings exceed four times his and his wife's combined earnings?

Cant really argue if the answer is no to this lot to be fair.

munchkin_utd

dutchy21 wrote: »

I earn £46k and my wife earns £36k<snip>
Anyone been in this situation before and knows what to do?
Please help!

thats a joint income of 82k stg or €97,909 according to google's wee currency converter.
So sympathy might not be gushing from all comers to be fair.

that said, have you looked into trying to offset the costs of the irish mortgage interest against your taxes seeing as that is similar to an investment related expense? And claw back more on any cash spend on dolling up the house and other outgoings like flying over to check on the house, car hire in ireland etc.

Saying you cant afford it seems a little overstated.
You seem to have the cash all right but youd prefer to spend it on kids clothes and childcare than a failed investment.

And doesnt going into bankrupsy mean you are insolvent, you cannot meet your debts with the income you have.
You seemingly can afford the 2 mortgages so you arent bankrupt, either legally or in reality.

Marcusm

dutchy21 wrote: »

Hey,
I'm Irish and have been living and working in the UK since 2003.
I bought a house in Ireland at the height of the Irish property boom and the house that I bought is now worth 50%/60% of what I paid for it, therefore in massive negative equity. I also own a house in the UK with my wife which we bought last year.
With plummeting rents in Ireland and the mass departure of a generation of people, it is highly unlikely that I will be able to continue to rent my house out in Ireland and therefore I won't be able to afford to pay the mortgage on that house plus the mortgage on the house in the UK.
I am constantly throwing money into what seems like a black hole in Ireland and with property prices still falling I feel it would be best to cut my losses and run!
Is filing for bankruptcy an option for me? If I do so would my house in Ireland and the UK be reposessed? I earn £46k and my wife earns £36k and as we would like to start a family sooner rather than later we feel that with the house in Ireland in our lives we may never be able to afford to have children. What can I do? I am very stressed about the whole thing and don't know what to do! Should I just stick it out and keep pouring money into this bad investment or should I try to sell up and walk away with a large debt and nothing to show for it? Or file for bankruptcy?
Anyone been in this situation before and knows what to do?
Please help!

OP

Are you in arrears on either of the loans? It doesn't sound as if you are such that bankruptcy is not in point at this stage anyway. Just because the property is worth less than the debt against it does not mean that repayment of the loan can be called for.



GCDLawStudent

There was no legislative scheme in the UK in the 1980s whereby people Andes back their keys and got the debt written off. People who did at generally found that the property was sold fr a lot less than the outstanding debt and the lender chased tem or the debt when the economy recovered. Had they precipitated a bankruptcy it might have saved them in the long run but most were ostriches with their heads firmly encased in sand.