First insolvency settlement with mortgage debt

Bronte said:
If people are that stupid after all that has happened than I've no sympathy for them. You should only buy what you can afford and if you cannot afford it don't buy it.

You haven't answered the question, who is going to house the people renting if the house is sold? You do realise the state is abysmal at housing people and have a hugh backlog on those needing housing, a need that is catered for by the much maligned private landlord who is taxed at every turn. I'd say a lot of the reason for housing shortgages is mainly down to lack of supply but also because people like me won't buy as the returns are abysmal, and the red tape every more onerous.
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I agree with your first point...hence it's why I don't like to see debt write offs while retaining house ownership now for people in trouble.
And the kind of deal struck in the original instance highlighted in this post, IMO, only encourages excessive risk taking in the future as people believe they'll never lose what they have no matter how indebted they find themselves.

I don't get your question about who will house the people currently renting if the house their in is sold??? If they're renting now, they just go and rent in a different house if their current place is sold...why are you bringing the state and social housing into this....have you info on the tenants in these buy to lets that they are currently receiving RA for example?

On your last point, I think perhaps your dragging a different argument into the mix here from a landlords perspective?
 
Delboy said:
it's why I don't like to see debt write offs while retaining house ownership now for people in trouble.
And the kind of deal struck in the original instance highlighted in this post, IMO, only encourages excessive risk taking in the future as people believe they'll never lose what they have no matter how indebted they find themselves.
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As has been pointed out to you, particulary by Dr Debt, this might not be a good deal at all for the borrowers. They may be still saddled with NE, they may have had debt written off, but they may will owe a vast amount that will take every spare penny for the foreseeable future.

As for the PIP, he's done a lot of work and has been paid practically zero and now we have the case of another PIP who was paid 3K and his proposal was rejected by the bank, and the borrower is mad at the PIP and has made a complaint about him to the ISI.

Sounds to me that this whole insolvency and PIP is totally ill thought out and I doubt very much if any PIP will make money out of it. It's all a nonsense. And what's really laughable is that Lorcan O Connor of the ISI thinks this debt write off is brillant. This one is a showcase of what's to come. The truth is that his office is not working as it should and there are no floodgates of debtors coming to him, because you know what, it's a bureaucratic nightmare and costly too. Why the ISI, the government, the mandarins who drafted the legislation and the official assignee are all in cloud cuckoo land. Coz you know what people with no money cannot pay to go insolvent/bankrupt etc.

Meanwhile we have all the newly appointed insolvency judges twiddling their thumbs. At a cost of 0000000. And we've a brand new quango the ISI also being paid for nothing. Meanwhile the people really struggling and trying to get on with their lives are getting nowhere.
 
Yes, I think the whole insolvency service is a dead duck. Its a pity that Lorcan O Connor doesn't acknowledge that the whole thing is starting to crumble instead of making public announcements that he is expecting an avalanche of applications in the 2nd quarter. He also keeps on talking about hiring more PIPs when none are required.

Here's the problem. The banks are not interested in the Insolvency Service (mainly due to cost and bureaucracy)so they are doing everything possible to side step it. The PIPs have realised that they will never be paid for their time so they are working either on informal arrangements with banks OR preparing clients for bankruptcy.

I think the overall design of the legislation is 75% there. It falls down however due to unnecessary bureaucracy and the volume of work required. It requires a lot of work from the banks, the PIP, the ISI, and the courts. Bottom line reality is that there is no money available to pay for all this.The designers of the legislation seem to have completely ignored the "running cost" of these processes and the assumption is that the banks and the goodwill of PIPs will fund the entire shinnanigans . That assumption is flawed and thats why it wont work in current format. Does an individual with a 60,000 euro debt problem really need the input of so many agencies. I dont think so.
 
Bronte said:
As for the PIP, he's done a lot of work and has been paid practically zero and now we have the case of another PIP who was paid 3K and his proposal was rejected by the bank, and the borrower is mad at the PIP and has made a complaint about him to the ISI.
Sounds to me that this whole insolvency and PIP is totally ill thought out and I doubt very much if any PIP will make money out of it.
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The PIP in this case got 5k. The PIP who got 3k I presume refers to this case
http://www.independent.ie/irish-new...debt-first-to-get-writeoff-deal-29949084.html
I'm not sure how you equate that to getting paid practically zero. 5k/3k is a lot of money to me and I'm sure the PIP's could have quiet a few cases running at the same time.

But we're going somewhat off point here if we're going to start discussing PIP's fees
 
The PIP did not get 5K. He's expecting to get paid 5K in drips and drabs over the next five years.The press reported that he has received 150 euro so far !!
 
Not sure where you get that he's 'expecting' to be paid 5k from. Per the report in the Indo
He said he charged €5,000, plus VAT of 23pc, for the deal. Just €150 of this was paid upfront, with the main lenders ending up covering the rest of the PIP's costs.
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So 150 from the client and the rest from the banks. Can't see the banks not paying up, can you?
So the tax payer takes a hit on the debt being written off, on already having funded the banks to get them this far over the past 5 years....and now pays for the PIP as well!
3 cheers for the taxpayer, hip hip
 
Yes I can.

The way these deals normally work is that the PIP gets paid a certain amount from each payment that the debtor makes over the life of the arrangement. Do you really think the banks will pay the PIP 5K up front with the very tangible risk that the arrangement will not go the full distance.
If the PIP is paid 5K by the banks today and the debtor disappears tomorrow, then the bank has lost 5K. It doesnt work like that. The PIP is paid based on the payments made by the debtor and nothing else. If the debtor doesnt stick to the arrangement, the PIP doesn't get paid
 
Bronte said:
As has been pointed out to you, particulary by Dr Debt, this might not be a good deal at all for the borrowers. They may be still saddled with NE, they may have had debt written off, but they may will owe a vast amount that will take every spare penny for the foreseeable future.

As for the PIP, he's done a lot of work and has been paid practically zero and now we have the case of another PIP who was paid 3K and his proposal was rejected by the bank, and the borrower is mad at the PIP and has made a complaint about him to the ISI.

Sounds to me that this whole insolvency and PIP is totally ill thought out and I doubt very much if any PIP will make money out of it. It's all a nonsense. And what's really laughable is that Lorcan O Connor of the ISI thinks this debt write off is brillant. This one is a showcase of what's to come. The truth is that his office is not working as it should and there are no floodgates of debtors coming to him, because you know what, it's a bureaucratic nightmare and costly too. Why the ISI, the government, the mandarins who drafted the legislation and the official assignee are all in cloud cuckoo land. Coz you know what people with no money cannot pay to go insolvent/bankrupt etc.

Meanwhile we have all the newly appointed insolvency judges twiddling their thumbs. At a cost of 0000000. And we've a brand new quango the ISI also being paid for nothing. Meanwhile the people really struggling and trying to get on with their lives are getting nowhere.
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Spot on Bronte

Steve
 
Delboy said:
And the kind of deal struck in the original instance highlighted in this post, IMO, only encourages excessive risk taking in the future as people believe they'll never lose what they have no matter how indebted they find themselves.
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I was thinking of you when I heard about AIB writing off at least 20% of mortgages on some homeloans, hope it doesn't make you choke on your cornflakes this morning ;)

http://www.irishtimes.com/business/...ib-to-write-off-debt-for-homeowners-1.1679593

I'd say a foretaste of what's to come and something that should have happened years ago, which we discussed quite a while back on here.
 
Glad to see your so glib about the whole process Bronte. Are you possibly looking to benefit from some of these write-offs yourself or perhaps you don't pay tax, and therefore this isn't going to hurt you?

So 2 neighbours ...1 struggling to pay but just about managing it. The other not/can't paying. The latter gets a good chunk written off and can afford a better standard of living than their neighbour
If that seems fair to you, then we have very different outlooks on life.

And under this new deal, if you 'come' into money at a later stage, you'll get bigger write-offs!
http://www.irishtimes.com/business/...debt-for-some-homeowners-in-arrears-1.1679593
If the owner comes into extra money, they will be given extra write-offs for sums set against the warehoused portion of the loan. In the first five years of the new arrangement, the write-off would amount to €3,000 for every €7,000 repaid off the warehoused €100,000. Between five and 10 years, the discount would be €2,000 off every €8,000 paid back. The move is designed to incentivise early repayment.
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So when the banks should be writing these new deals in such a way as to have 1st dibs on any windfalls, they're instead going to give more write offs at the taxpayers expense!

I'm not stupid enough to think that debt write off's won't happen in this country. This is Ireland after all. It's the holding on to the asset(s) that annoys me. It punishes those that were prudent during the false boom, who were weary of taking on huge mountains of debt, living a flash lifestyle etc

But no, to answer your original question, I won't be choking on anything. It's nothing less than I expected.
 
Delboy said:
Glad to see your so glib about the whole process Bronte. Are you possibly looking to benefit from some of these write-offs yourself or perhaps you don't pay tax, and therefore this isn't going to hurt you?

If that seems fair to you, then we have very different outlooks on life.
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I wasn't intending to be glib, just realistic, I've known since this whole sorry mess started that the only way to sort it was to write down debts to sustainable levels.

Just to clarify, no I will not be looking for debt write off, and yes I pay income tax, some kind of social insurance, for which I don't believe I'll ever be entitled to any social payment, nppr, household charge, property tax, rates etc in Ireland. I come for the old school, you know the one where you borrow and you pay back every penny. And it's a real struggle to make any money as a landlord.

I agree with you that it is not fair that those who seeming did the right thing and are struggling get no break, but those that broke every rule book on borrowing are seemingly getting away scot free. But I don't believe there is such a thing as a free lunch. If those that were idiots get off, they will just go and do the same again, and next time there will be nobody to pick up the pieces. But I also see that we have to have debt write off to get people back on their feet. And we mustn't forget those who are under an immense amount of stress, that's without the suicides. So in the case mentioned in this thread, I don't actually think yet it is clear to me that the debtors got a good deal.

And the reason for the carrot in relation to inheritances is... they know full well that the inheritence will go elsewhere otherwise, so they are being clever and ergo that costs you and me less not more as you seem to think.
 
I agree that people should be helped to get back back on their feet, and given a chance to start again. You'd want to be made of stone not to have sympathy for most people in trouble (most, but not all !!!).

The way I'd help people in real trouble is to write off their debts(following a thorough review) as part of handing over the keys...they 'learn' their lesson (those that went OTT) and get a chance to start again.
The banks get burned and hopefully learn a lesson for the future.
The next generation of buyers see some supply come on to the currently dysfunctional market and are'nt punished with high prices (which are as a result of Govt and Bank policy in trying to prop up the current generation who are in NE)
 
The moral high ground brigade here seem to think that everyone who is facing personal insolvency or bankruptcy were 'idiots', greedy or deserve to be punished. Some are in this situation due to severely reduced wages, seperation, berevement and a host of other reasons, they may have been amongst your hailoed 'prudent few' spending years being sensible and yet still got burned.
Hope it stays fine for you.
 
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