First Debt Settlement Arrangement Reached

The_Conductor

http://www.irishtimes.com/news/social-affairs/first-debt-settlement-arrangement-agreed-1.1607348

A Donegal civil servant has become the first person in the country to have a debt settlement arrangement agreed by his creditors.

Three of the country’s major banks were involved in the arrangement, provided for by new legislation, along with three other creditors. They voted by a sufficient majority, though not unanimously, to accept the settlement proposed.

The man in his 40s had unsecured debts of more than €100,000 after the collapse of his business. He lives in rented accommodation and only had unsecured debts.

While the level of debt written off has not been disclosed, the man’s personal insolvency practitioner, Ronan Duffy of McCambridge Duffy, said reports of a 70 per cent write-off were wrong.

He said that figure would create “unrealistic expectations” among other debtors. “The write-off is substantial, but it should be noted that the debtor is paying back what he can afford and this will vary from case to case depending on income and any assets,” Mr Duffy said.

In October, Monaghan Circuit Court granted a protection certificate to the Donegal man for 70 days to allow him to come to the arrangement. His case will now be referred to the Insolvency Service of Ireland before going back to the court for final approval.

The debtor’s name will then be placed on a register held by the insolvency service. His debts will be settled over a five-year term and, if his circumstances improve over the term, he will be required to pay more than currently agreed.

The_Conductor

Elsewhere- its reported that the person is a civil servant working in Letterkenny, and as part of the deal, agreed to hand back his house in the vicinity. The case is a closed case, being dealt with by the district court in Monaghan. The practitioner involved is reported as stating that rumours of a debt write-down in the region of 70% are vastly erroneous, and the rumours have the sole effect of setting wholly unrealistic and unreasonable expectations on the part of other applicants in the system.

The_Conductor

And how the Indo reported the case (and the other 20 coming up):

http://www.independent.ie/business/personal-finance/property-mortgages/families-keep-health-cover-and-second-car-in-bank-debt-deals-29783753.html

FAMILIES have been able to keep their health insurance and a second car in some of the first debt deals agreed with banks.

The first batch of 20 cases provisionally agreed to by banks also shows that families will have thousands of euro of credit card and credit union debts written off.

Most of the people who have had deals with banks processed by personal insolvency specialists Grant Thornton Debt Solutions are in families with children and work in the PAYE sector.

And most managed to keep their homes despite having crippling debts.

Details of the deals being hammered out with the banks emerged as the first personal insolvency deal to be formally signed off by the banks and the courts was finalised yesterday.

In that case, a Donegal man in his 40s had 70pc of his debts written off. The arrangement follows a protective certificate being issued by the Circuit Court in Monaghan in October.

It has now been signed off on by the courts.

Although every deal is set to be different, the Irish Independent can reveal details for the first time of the conditions imposed by banks agreeing to write off huge amounts of personal and mortgage borrowings.

The monthly living expenses being allowed by banks are far less draconian than at first feared.

One family on a combined €100,000 a year managed to get €233,000 written off from their home mortgage, buy-to-lets and credit card debts.

But they have surrendered their family home, along with the investment properties.

The family decided that they were so overwhelmed by their massive mortgage borrowings that they volunteered to hand back the keys to their homes in return for having a large chunk of what they owed written off.

Those who have surrendered their homes are understood to have done so by choice.

Stephen Tennant, a partner at Grant Thornton Debt Solutions, said that the new system was not perfect, but the cases that had been agreed by his firm with banks and other lenders showed that it was possible to get write-off agreements.

"We can see the market is now starting to find its feet, and that industry protocol is beginning to develop.

There is a realisation that the legislation, while not perfect, offers a strong basis for individuals with multi-creditor exposures to deal with their financial problems in a systematic fashion."

Charlie Weston Personal Finance Editor

The_Conductor

So- from the first 20 cases- we have multiple examples of people 'voluntarily' handing back their homes- however being allowed keep health insurance and second cars........ Looks like we are going to have widespread 'voluntary' repossessions, after all.

The most unusual thing in all this for me- is the assertion that there are only 20 cases in the system at the moment- this is a pittance.

D3PO

Id love to know the facts of all the cases tbh. The first case is being mooted as a watershed. The press conveniently glossing over the fact that the debt was unsecured.

Unsecured debt that's unsustainable is going to have no other outcome but a debt writeoff, its not like this is a groundbreaking change in the banks policy they had no choice, in the matter to be honest and even then most importantly it was interesting to read that it was not unanimously accepted by all the institutions owed money.

Im glad to see it in genuine cases tbh. If debt is unsustainable its unsustainable. Some people will be up in arms that a family on 100k would get a debt writeoff but they clearly were in over their head. The facts are they still have an outstanding mortgage debt and no property so its not like they are getting off scott free.

gaius c

The_Conductor wrote: »

So- from the first 20 cases- we have multiple examples of people 'voluntarily' handing back their homes- however being allowed keep health insurance and second cars........ Looks like we are going to have widespread 'voluntary' repossessions, after all.

The most unusual thing in all this for me- is the assertion that there are only 20 cases in the system at the moment- this is a pittance.

Bear in mind who is reporting it. The Indo have a clear agenda when it comes to debt write off and they are already wrong on the 70% figure.

Sleepy

I have to admit, I'm not happy at the idea of private health insurance being regarded as an acceptable expense for someone involved in an arrangement where a taxpayer owned bank is forgiving debts (unless of extraordinary circumstances where the insurance provides a net benefit to the taxpayer e.g. long-term illness that's being paid for by the insurance company but would fall on the state should the individual break payments on their premiums)...

Whether that's the case in any of these arrangements is another matter of course, the Indo article certainly suggests it.

D3PO

Sleepy wrote: »

I have to admit, I'm not happy at the idea of private health insurance being regarded as an acceptable expense for someone involved in an arrangement where a taxpayer owned bank is forgiving debts (unless of extraordinary circumstances where the insurance provides a net benefit to the taxpayer e.g. long-term illness that's being paid for by the insurance company but would fall on the state should the individual break payments on their premiums)...

Whether that's the case in any of these arrangements is another matter of course, the Indo article certainly suggests it.

Totally agree that's the bit Im unhappy about too. Health insurance, sky sports, second car, all that sort of thing has to go.

Its a 6 year process and it has to have serious consequences on those that enter it and if that means they have to lave a meager frugal existence for 6 years well that's just part of the pain they need to take to have the large burden lifted off their shoulders.

Sleepy

I would presume, though I'm open to correction, that the creditors are given access to such details during the process?

jmayo

Sleepy wrote: »

I have to admit, I'm not happy at the idea of private health insurance being regarded as an acceptable expense for someone involved in an arrangement where a taxpayer owned bank is forgiving debts (unless of extraordinary circumstances where the insurance provides a net benefit to the taxpayer e.g. long-term illness that's being paid for by the insurance company but would fall on the state should the individual break payments on their premiums)...

Whether that's the case in any of these arrangements is another matter of course, the Indo article certainly suggests it.

It is not just private health insurance.
There have been two high profile cases before the courts of develoeprs/developers wives who have maintained they need money set aside for private education.
If someone owes so much money, particularly to state owned institutions, there is no way in hell their kids should still get preferential treatment at the expenes of other people's kids.

Sleepy

IIRC, in both those cases, the issue was that of an application to receive assets which the developer argued were the legal property of their wife (and thus outside the remit of the insolvency) which were frozen due to that insolvency.

While I don't see how a married couple can be seen as two legal financial entities (particularly where the wealth of one came about from a transfer between the two that preceded an arbitrary time limit), unfortunately that seems to be the law of the land, however unpalatable that is.

gaius c

Irish Times confirms that the 70% figure is wrong.
Let's not forget that this was the only paper that stayed sensible and held fire while the Indo was reporting lurid stories of s*x trafficking re Samantha Azzopardi. I know which one I'll be paying more attention to.
http://www.irishtimes.com/news/social-affairs/first-debt-settlement-arrangement-agreed-1.1607348

matrim

D3PO wrote: »

Totally agree that's the bit Im unhappy about too. Health insurance, sky sports, second car, all that sort of thing has to go.

Its a 6 year process and it has to have serious consequences on those that enter it and if that means they have to lave a meager frugal existence for 6 years well that's just part of the pain they need to take to have the large burden lifted off their shoulders.

Depending on the circumstances 2 cars could be good for the bank. If both cars are needed so the 2 people can work then it could mean more money in the household so more money to pay.

iguana

D3PO wrote: »

Totally agree that's the bit Im unhappy about too. Health insurance, sky sports, second car, all that sort of thing has to go.

I agree about the others but a second car needs to be taken on a case by case basis. If one part of the couple is a stay at home parent within walking distance of basic amenities like shops or the children's school then a second car is a luxury but if both partners work in different areas that are too far to walk/cycle or there are children with no other way of getting home from school then a second car is a necessity.

Though writing that has made me wonder if a couple who live within walking distance to all work/school/shopping and social amenities should be expected to give up their only car as it's clearly not a necessity?

jay0109

Sleepy wrote: »

I would presume, though I'm open to correction, that the creditors are given access to such details during the process?

They probably are, but this is Ireland and all angles/excuses will be used in each case to get favourable decisions that most 'normal' people would deem to be excessive.....:mad:

D3PO

matrim wrote: »

Depending on the circumstances 2 cars could be good for the bank. If both cars are needed so the 2 people can work then it could mean more money in the household so more money to pay.

People survived for long enough with one car in two working family homes.

Husband or wife can drive the other to bus or train to get public transport. If it means they have to leave for work 30 mins earlier or whatever well that's part of the penance of insolvency.

My parents survived just fine with one car when both were working back in the 80's just because two car families became the norm over the past 20 years doesn't mean its critical they have two.

foggy_lad

We had a car when growing up but rarely saw inside it because most cars back then were for taking people to work and back home, we had bikes for school or for getting a few things from the shop.

These people are as much to blame for overspending and borrowing way beyond their means as the bondholders and Gamblers who caused the problems we now face. They should have no luxuries such as cars, Sky TV, holidays, golf club memberships, private schools and health insurance!

The_Conductor

foggy_lad wrote: »

They should have no luxuries such as cars, Sky TV, holidays, golf club memberships, private schools and health insurance!

Most people who are lucky enough to have a job- don't have these........any of them.......

D3PO

The_Conductor wrote: »

Most Some people who are lucky enough to have a job- don't have these........any of them.......

FYP no need to be melodramatic, but your point is taken.

jmayo

Sleepy wrote: »

IIRC, in both those cases, the issue was that of an application to receive assets which the developer argued were the legal property of their wife (and thus outside the remit of the insolvency) which were frozen due to that insolvency.

Eh the latest one is indeed the one married to the ex developer buddy of the ex jailbird with questionable firesafety.
And yes there is a question mark in this case whether the assets are hers or not.

The other one I am referring to was a developer who together with his well connected daddy used to often have breakfast in the Shelbourne with seanie fitz.
We got to hear that story courtesy of the developers radio channel i.e. RTE.

AFAIK this developer, and ex journalist, maintanined he needed 80k for living expenses which included private school fees.
That was kind of sweet considering he and his fianna fail ar**licking daddy owe the taxpayers close to a billion. :mad:

I am not sure what happened in that case as just having to listen to him was sickening enough.

Gael23

Aside from the case, I think some of these details should be kept confidential. The article just stops short of giving the persons name

gaius c

ryanf1 wrote: »

Aside from the case, I think some of these details should be kept confidential. The article just stops short of giving the persons name

It's going to be on a public register. Stubbs' Gazette have been publishing details like this for years. I don't see what the problem is.

Gael23

gaius c wrote: »

It's going to be on a public register. Stubbs' Gazette have been publishing details like this for years. I don't see what the problem is.

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

D3PO

ryanf1 wrote: »

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

why ?

Its ok for tax defaulters to have their names published and nobody bats an eye why should people who get a debt settlement be any different ?

Either way I couldn't care less. Ive better things to do with my time than be a nosy neighbor seeing if anybody who lives near me got a deal and if they did who cares ?

gaius c

ryanf1 wrote: »

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

Shouldn't tenants know if their landlord is a debt defaulter?

Daith

gaius c wrote: »

Shouldn't tenants know if their landlord is a debt defaulter?

Likewise shouldn't landlords know if their tenant is a debt defaulter?

gaius c

First mortgage related insolvency case is up.
http://www.rte.ie/news/2013/1127/489367-insolvency-court/

The borrowers have mortgages, unsecured debt and buy-to-let property.

Multiple mortgages, unsecured debt and they are landlords. I'll be watching this one carefully.[/Skibbereen eagle]

jmayo

ryanf1 wrote: »

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

Ehh the case in Donegal was a guy whose business failed was it not ?
Thus I don't see why his name should not be released.
BTW did this guys failed business leave others i.e. non financial institutions, out of pocket ?

D3PO wrote: »

why ?

Its ok for tax defaulters to have their names published and nobody bats an eye why should people who get a debt settlement be any different ?

Either way I couldn't care less. Ive better things to do with my time than be a nosy neighbor seeing if anybody who lives near me got a deal and if they did who cares ?

You should care because you could be paying for it.
Also some of us would like to know if some of the chancers got a writeoff and how big it was.
Also for future reference it might come in handy to know who not to do business with.

D3PO

jmayo wrote: »

You should care because you could be paying for it.
Also some of us would like to know if some of the chancers got a writeoff and how big it was.
Also for future reference it might come in handy to know who not to do business with.

Im paying for it anyway. Knowing who it is or not is irrelevant.

Regarding business its easy to get an ICB report if I had to, its also possible (and advisable) to use a credit underwriter if in business anyway so it really servers no benefit apart from allowing people be nosey.

Geuze

ryanf1 wrote: »

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

Note that as part of the new Insolvency laws, public registers will be kept, as follows:

Section 133 of the Act requires the ISI to have in place the following:

• A register of Debt Relief Notices
• A register of Protective Certificates
• A register of Debt Settlement Arrangements
• A register of Personal Insolvency Arrangements

See here:

https://www.isi.gov.ie/en/ISI/Pages/Registers

gaius c

ryanf1 wrote: »

Stubbs Gazette mainly publishes details relating to business people and companies but I think cases relating to private individuals should be confidential

The Donegal case was business debt. It has been reported numerous times as such. I think it's curious that you should post in favour of a failed businessman welshing on his debt having his name kept out of the public domain.

Post from the Pin:

Are the details of settlements made public? I heard this evening the name of the Donegal person involved in the first case and the person identified to me isn't in his 40s. This person is retired from the HSE, was a very senior figure within the HSE and a Zanu-FF fellow-traveller. The failed business would have been a private hospital.

Please let me know if I'm heading in defamation territority here, but I and many others would consider him a particularly repugnant individual who even awarded a HSE contract to his own company, without following the standard tendering process.

Still believe that these people should be allowed hide behind a veil of secrecy?