Brendan Burgess
Founder
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This is one of the examples provided by the [broken link removed]to show how bankruptcy works in practice . I have attached the case study of Gerry.
Income
Net income|€3,052
Reasonable Living Expenses| €1,822
Available for creditors|€1,230Family Home
Value|€180,000
Mortgage |€160,000
Equity|€20,000
Repayments|€ 1,030
Interest|€ 630
FAMILY HOME
As the mortgage is being paid Gerry’s mortgage bank has elected to stay outside the bankruptcy and rely on its security.
The family home has a value of € 180,000 and there is an outstanding mortgage of € 160,000. There is therefore € 20,000 equity in the family home. As Gerry’s share of the family home is now vested in the Official Assignee, 50% of the € 20,000 belongs to the Official Assignee.
His wife will have the option to purchase the Official Assignee’s interest in the family home for € 10,000 [50% of the Equity]. The Official Assignee will have to apply to Court to sell this interest to Sheila. If Sheila is unable to raise the funds immediately she may apply to the Court for a postponement on the order for sale to enable her to raise the finance. The Court will consider the interests of the creditors, Sheila and their children in considering whether to postpone a sale. If Sheila cannot purchase the Official Assignee’s interest, the Official Assignee will apply to Court for an order for Sale. For the purposes of this scenario it is assumed Sheila is able to raise the € 10,000 and the Official Assignee gets court approval to sell his interest to Sheila.
Available for unsecured creditors
Income|€3,052
Set costs|€1,822
Mortgage |€1,030
Available for unsecured creditors| €200This is just nonsense. This bankrupt pays €400 capital off his mortgage every month during the 5 years of the bankrpuptcy/payment order period.
So the unsecured creditors get wiped while he saves up €25,000.
Whatever about paying capital off a mortgage in negative equity, this guy will exit bankruptcy with savings of €25,000 at the expense of his creditors.
Income
Reasonable Living Expenses| €1,822
Available for creditors|€1,230
Mortgage |€160,000
Equity|€20,000
Repayments|€ 1,030
Interest|€ 630
FAMILY HOME
As the mortgage is being paid Gerry’s mortgage bank has elected to stay outside the bankruptcy and rely on its security.
The family home has a value of € 180,000 and there is an outstanding mortgage of € 160,000. There is therefore € 20,000 equity in the family home. As Gerry’s share of the family home is now vested in the Official Assignee, 50% of the € 20,000 belongs to the Official Assignee.
His wife will have the option to purchase the Official Assignee’s interest in the family home for € 10,000 [50% of the Equity]. The Official Assignee will have to apply to Court to sell this interest to Sheila. If Sheila is unable to raise the funds immediately she may apply to the Court for a postponement on the order for sale to enable her to raise the finance. The Court will consider the interests of the creditors, Sheila and their children in considering whether to postpone a sale. If Sheila cannot purchase the Official Assignee’s interest, the Official Assignee will apply to Court for an order for Sale. For the purposes of this scenario it is assumed Sheila is able to raise the € 10,000 and the Official Assignee gets court approval to sell his interest to Sheila.
Available for unsecured creditors
Set costs|€1,822
Mortgage |€1,030
Available for unsecured creditors| €200
So the unsecured creditors get wiped while he saves up €25,000.
Whatever about paying capital off a mortgage in negative equity, this guy will exit bankruptcy with savings of €25,000 at the expense of his creditors.
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