Should I bail out, take the hit?

paddyland

I was seriously indebted with my mortgage a few years ago, among other, smaller debts. In the last three years, I have managed to catch up with my repayments, and have kept up to date since then. I do however, have an outstanding credit union loan, and a credit card debt which never gets a chance to be repaid.

I am in about €25,000 - €30,000 of negative equity, not so bad as many other people. I owe a few thousand in other debts. I am keeping everyone happy, and have received no threatening letters in three years, other than an odd stern warning from the credit union.

However, I am constantly firefighting. I am in that curious netherworld, where I am keeping up with my repayments, strangling myself to do so, yet have not one single cent to toss in the air, nor a rainy day fund should my car break down, a family accident happen, or anything else unforeseen. No holidays, no treats, no petty cash, just the bare essentials to scrape all my dues, and eat.

I have no pension, no health insurance, no savings, and nothing to put towards the future. I pay all my own bills myself, there is nobody else to help. I did all the MABS stuff a few years ago - there are no more frivolities to pare away.

So now I am reconsidering the big question again, should I sell, should I bail out, should I go Back to Go, Do Not Receive £200?

I have put thirteen years of my life into a thirty year mortgage. I am now questioning whether the cost of what I would lose if I sell, would not be outweighed by the seventeen years of quality of life I would regain if I did not have that big bank millstone round my neck? Even if I go on paying the mortgage, the property tax and the management fees are going to tip me over the edge every year, for what seems like forever.

There must be many others in that same situation, making their payments, luckily not in physical trouble with their bank, but unluckily living a non-existence to do so. Has anyone bailed out, and taken the hit? Any constructive advice, yay or nay? What would the bank say about the €25,000 or so I would owe? Would they give me a break on it? I don't want to renege, just get my life back.

jane82

You do realise you would have to pay rent somewhere if you moved out?
Prices are very rough at the moment.

gaius c

We didn't have NE but we took advantage of the bump in the market to offload ours. Feels great. ☺

paddyland

jane82 wrote: »

You do realise you would have to pay rent somewhere if you moved out?
Prices are very rough at the moment.

Hi, thanks. I should say, the property IS let out. The rent is not even fully covering the mortgage. I am in a low income job, with no prospects. So I am planning to make the best of what I have.

hidinginthebush

It's hard to know in advance, the banks keep touting the line that they are treating everything on a case-by-case basis.

It's tough, you're clearly doing everything you can, and keeping your head above water, barely. The problem is that there is a lot of spite towards people who do manage to get a break. And that is what annoys me the most about the current state of the country. the one thing this whole recession has done to me is to make me a whole lot more compassionate towards the people of this country. Why do we all take the fact that the banks and developers got bailed out on the chin, but god forbid a family of 5 get a few grand off their mortgage? What has happened to this place that we are burdened with a national debt for the next generation with little or no protest or social unrest, but the minute someone gets reported for getting a debt write down, or says they'll take bankruptcy expecting to keep their family home in the process, the nation erupts in a collective voice of scorn of "why should they get the breaks if I don't!". Yes, it's unfair that the person down the road is getting a break on their mortgage repayments, but why direct the anger at them? Why not get mad at the fuckwits who put the country in the state where a 2 bed apartment is selling for upwards of €400K, who decide that we all need to shoulder the weight of errors made by reckless lending, who decide that the interests of bondholders come before the interests of the people they were elected to represent.

Jaybor

Do what Ivan Yates did.
Go to the UK and go bankrupt there.
Then come back and start again.
Waste of time trying to get yourself back on track in Ireland. They cant make up their minds what they want to do with people here.

jlm29

Jaybor wrote: »

Do what Ivan Yates did.
Go to the UK and go bankrupt there.
Then come back and start again.
Waste of time trying to get yourself back on track in Ireland. They cant make up their minds what they want to do with people here.

Such a horrible attitude. He's not bankrupt. He has enough money to pay his bills. He just doesn't have spare money. Lots of people don't.

Darren 83

Did you talk to the Credit Union about your loan?
Or did Mabs do it for you. They might let you just pay off the interest or reduce the amount each week/month.

orchidsrpretty

If the mortgage payment is manageable on its own, without the unsecured debt you do have, maybe make an appointment with mags and see if you can negotiate with the company's. They are very helpful and aware that you need some level of disposable income to gave any quality of life.

Jaybor

jlm29 wrote: »

Such a horrible attitude. He's not bankrupt. He has enough money to pay his bills. He just doesn't have spare money. Lots of people don't.

There are laws here that can hurt and your family you badly and have you eating rice for the rest of your life. There are laws in the UK and almost every other civilized country that can allow you to start all over again and maybe have a life.

Its not up to you or I to pass moral judgement on a person living on rice.

vitani

The other option is to see if you have any skills you could make extra money out of. Web design/teaching a musical instrument/editing/repairing things etc.

Tigerandahalf

One would have sympathy for people who didnt spend money on credit in the boom but still got caught with a huge mortgage because they bought a property to live in.
However it is hard to have sympathy for people who spent without a thought through using their credit card and getting credit union loans.
I have never paid a cent of interest on my credit card always making sure I had cash in the bank at the end of the month to cover it. Neither do I have health insurance. My car is over 10 years old.
Unfortunately the regulation in this country was hopeless and those responsible are certainly not paying the price.

Jaybor

Tigerandahalf wrote: »

One would have sympathy for people who didnt spend money on credit in the boom but still got caught with a huge mortgage because they bought a property to live in.
However it is hard to have sympathy for people who spent without a thought through using their credit card and getting credit union loans.
I have never paid a cent of interest on my credit card always making sure I had cash in the bank at the end of the month to cover it. Neither do I have health insurance. My car is over 10 years old.
Unfortunately the regulation in this country was hopeless and those responsible are certainly not paying the price.

Well fair play to you.
But there are people whose lives are f*cked. To get our economy going again properly we must get these people back on their feet.
Any other civilized country gives people a second chance to start from zero.
We dont here.

So we can just punish them for the rest of their lives and make you feel happy or we can help them back into contributing members of society.

bigblackmug

You've got huge risk on the downside.
If you can keep your head above water then you have a valuable asset in 17 years time but it will have been earned at a considerable cost over 30 years.

Talk to the bank manager and see if they could give you a deal on a loan to cover the negative equity should you be able to find a cash buyer for the property.

Your problem is that your bank sees you as an asset. You've been servicing your mortgage. If you were behind on your mortgage their mind would be focused on the problem that you and they share.
Also, are the bank actually making money on your mortgage? Is it a tracker mortgage where they are loosing money. If you know this then you can guess how willing they would be to get the mortgage off their books.

Jaybor

I probably shouldnt post this but i might as well.
It might help the op.
A friend of mine had a similar situation and was stuck in a crap job making half nothing. It wasnt even worth working. He would have been better off on welfare.
He went to the bank and they basically wanted him living on rice. But still to owe the debt.

He quit his job and went to the uk. He got a solicitor in the UK to write to the bank and tell them that what he was about to do (Ivan Yates style). Straight away the bank write off all the negative equity and rescheduled, the payments and froze the interest.

That was far better than he would have got over here. The bank would have stood to lose a lot more had he gone ahead and gone bankrupt over there. Now he is back, and putting his life back together.

Another friend, originally from Oz had pyrite and his house was worth nothing anymore. He contacted the bank, and anyone else who he thought might listen and got told to get lost. So then he got a solicitor here to contact the bank and tell them to half the debt owed and freeze the interest. If they didnt, that he would post them the keys and he was going home to Australia and the could chase him for the money if they wanted, but they could keep the house. The bank did a deal.

You need leverage over the bank. If you contruct this, you will be able to make the banks cooperate.

gaius c

Jaybor wrote: »

I probably shouldnt post this but i might as well.
It might help the op.
A friend of mine had a similar situation and was stuck in a crap job making half nothing. It wasnt even worth working. He would have been better off on welfare.
He went to the bank and they basically wanted him living on rice. But still to owe the debt.

He quit his job and went to the uk. He got a solicitor in the UK to write to the bank and tell them that what he was about to do (Ivan Yates style). Straight away the bank write off all the negative equity and rescheduled, the payments and froze the interest.

That was far better than he would have got over here. The bank would have stood to lose a lot more had he gone ahead and gone bankrupt over there. Now he is back, and putting his life back together.

Another friend, originally from Oz had pyrite and his house was worth nothing anymore. He contacted the bank, and anyone else who he thought might listen and got told to get lost. So then he got a solicitor here to contact the bank and tell them to half the debt owed and freeze the interest. If they didnt, that he would post them the keys and he was going home to Australia and the could chase him for the money if they wanted, but they could keep the house. The bank did a deal.

You need leverage over the bank. If you contruct this, you will be able to make the banks cooperate.

You have amazing friends!

Jaybor

gaius c wrote: »

You have amazing friends!

Nothing amazing about them. Ordinary people used to making deals and such at work every day. Just applying it to themselves in a bad situation.