# Everyone says "why don't you sell the properties"? & Social Welfare Issues.



## virgo2011 (1 Mar 2011)

Hi all,

Like thousands of Irish people, I was self employed (driving school) and it is with deep regret and shame I must accept the fact that I need financial state assistance. I have had to stop trading, I have had no lessons for the last 2 weeks and nothing booked in for the coming weeks. I also cannot afford the insurance on the car now which is due for renewal as well as my permit due for renewal.

I have spoken to citizens advice and some more people (a fg politician included!) and it appears that I am going to have a difficult task in getting assistance as I have 2 investment properties! Yet, I have no money!

My private residence: Mortgage 294k, arrears approx 8k, mortgage 1,154e pm

Thanks in adavnec for advice
Investment 1: Mortgage 120k, 790e pm: rent 600e pm arrears approx 6000e
Investment 2: Mortgage 209k, 894e pm: rent 520e pm
I have also about 35k in credit card debt!

I know I really stretched myself but I had another company that was doing very well in noughties but had to close(debt free) in 2009!

Anyone I speak to have said "why don't you sell the properties" and it appears that social welfare will also ask the same question. If I could sell the 2 investment properties then I would end up selling both for less than the mortgages, plus nothing is selling at the moment here Then what, I still have no money and even more debt.

Please, can anyone guide me on this? I am so desperate at the moment as I have about 2,000 in savings but from that I have 3 houses to insurance and pay bills! 

I have a meeting in with social welfare today at 3 so any advice at all would be greatly appreciated. What documents should I bring with me?


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## Billo (1 Mar 2011)

You cannot afford to hold on to all that property. You will have to sell even at a loss.
Properties at the lower end are still selling.
Good luck


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## truthseeker (1 Mar 2011)

Can you post up an approximate value of all of your properties?


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## virgo2011 (1 Mar 2011)

Private Residence: Mortgage 294k, Currnt value 230 - 250k
Investment 1: Mortgage 130k , current value 130k - 150k
Investment 2: Mortgage 209k, current value 150k

Sorry should have posted this thread under Redundancy, unemployent.....

Thanks for all posts to date


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## Bronte (1 Mar 2011)

I would actually say you're far better off going bust.  

In relation to social welfare I know one person who has an investment property and was able to show social welfare that it was basically valueless due to the down turn and is able to get social welfare at a reduced rate.  Social welfare periodically contacts the estate agent to assess the situation but property has no viewers and no bids in nearly 2 years.  It is unrented and has no mortgage.  Good location.

Have you thought about what would happen if you just stopped paying everything.  Eventually they'd evict you but you'd be able to stay where you are for about 2 years and then you can go and rent. 

Can the community welfare officer help you?  Not sure on social welfare rules but if investment mortgages is worth more than the value of your house then being in negative equity is a good thing.  You need to go down to social welfare and get assessed and get to know the rules.    As you are feeling a bit low right now be aware that in the social welfare offices there are some very nice people but also some not so nice.  Don't be put off by this.  The first step to helping yourself is getting up the courage to go to the social welfare office.  Social welfare rules are very complex so you need one of the two experts on here to reply to set you on the right road.  They normally are pretty quick on replying.


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## virgo2011 (1 Mar 2011)

Thank you Bronte and all others who have replied to my thread.  I have meeting at 3 today so will bring with me as much evidence as I can get together and hope that they will be realistic and see that in this current climate all investment property is simply a noose around ones neck.


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## delgirl (1 Mar 2011)

I'm surprised, particularly considering the new rules from April 4th regarding learner drivers having to have a minimum number of compulsory lessons with a qualified instructor - I think it's 12 - before they can take their test, that you are giving up the driving school.

Someone recently posted driving lesson deals on boards.ie and from what I understand, had a very good response.

If you can manage to keep going, there should be lots of business from April onwards. Or advertise now for special packages of 12 lessons. which people (parents ) can give their kids as gifts.

Hope whatever you decide to do works out and sorry to hear about your dilema.


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## enoxy (1 Mar 2011)

I'm not an expert in these matters but have claimed for jobseekers allce successfully while owning an investment property. 

Social welfare will look at the value of the inv. properties and compare this against the mortgages on them. If you are in neg eq or they are equal then they will not 'go against you'.

The more pressing issue you may have is that you don't have stamps to claim Jobseekers benefit. And your situation for applying for means tested Jobseekers allowance will be complicated if you have been self employed.

I suggest you get down to the social welfare office and sit down with them to discuss. And you may get some useful feedback from others on AAM.


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## virgo2011 (1 Mar 2011)

Thanks enoxy, had a meeting today in social welfare and hope to meet community welfare office in the morning.  Fingers crossed!


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## steph1 (1 Mar 2011)

Sorry to hear your troubles virgo I drive for a living myself a taxi driver and maybe your business is like the taxi business too many instructors in it now?
delgirl has some good advice there.  Advertising special rates would be a good idea.  Maybe you are like me coming out of a few bad months and not to mention a terrible christmas period what with bad weather etc.  
Now with the brighter evenings coming I think I will be out and about delivering my business cards around the estates.  Best of luck to you!


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## Ildánach (2 Mar 2011)

virgo2011 said:


> Private Residence: Mortgage 294k, Currnt value 230 - 250k
> Investment 1: Mortgage 130k , current value 130k - 150k
> Investment 2: Mortgage 209k, current value 150k
> 
> ...


 
According to the guidelines you should not be assessed as having any capital for the first investment, as it is in negative equity. Assuming the value of the first property is at the top end of your suggested value, you would be assessed as having capital of 20,000 euro.  Your own residence will not be taken into consideration.

The rental income and outgoings such as mortgage repayments are not taken into account, it is the capital value minus the outstanding mortgage.


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## virgo2011 (2 Mar 2011)

Thanks for all replies to date, just to update those members interested. I went to meet with community welfare officer this morning, extremely nice lady who said she will mark my case as urgent and deal with it asap. Approx. 1 hour after our meeting I received a call from her, asking if I own more properties (she didn't ask during the meeting but I had ticked yes on the application form and submitted figures!), I replied yes but stated that both are in arrears, explained the massive shortfall on the rent v mortgage. Her reply was " oh I'll have to have another look at your file as this changes your circumstances" I'm not very hopeful now and don't know who to turn to for assistance.
What I can't understand is why those of us who tried to better our lives, were willing to get off our backsides and achieve in life, are now made suffer. This is so wrong and a group of likeminded people should come together and start fighting for the rights of the "GO GETTERS OF IRELAND"


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## Billo (2 Mar 2011)

virgo2011 said:


> What I can't understand is why those of us who tried to better our lives, were willing to get off our backsides and achieve in life, are now made suffer. This is so wrong and a group of likeminded people should come together and start fighting for the rights of the "GO GETTERS OF IRELAND"



The country is up the creek, thanks to THE GO GETTERS OF IRELAND who gambled on the price of property going up and up, and lost. What about the rights of those who did not gamble ?


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## Greta (2 Mar 2011)

I agree with Bronte that you may be better off going bankrupt. As you are not tied to a job in Ireland, you may be able to move to the UK for a few months and go bankrupt there, then start over a new leaf. 

However, you need money to go bankrupt! If I understand correctly, your investment properties are now rented? Then what if you stop paying the mortgages and save up the rent for a few months? To cover your living expenses and the costs of moving to the UK and going bankrupt?

Another option would be to stay in Ireland and carry on as a driving instructor. Again, use the rent money to pay for your car costs and living expenses now, and contact mabs asap, if there is a way to manage your debts, they may be able to help you.

Also, rather than claiming welfare, can you get any job at all for a while? To allow you to at least earn for your minimum living expenses and save for your car costs, so you can then resume your work as a driving instructor?

Finally, don't be offended, but are you a good driving instructor? If you are, I think you shouldn't give up on your job, good instructors are hard to come by and any drop in demand is only temporal. On the other hand, if you were just managing to get up in good times, now may be the time to consider another career.


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## Complainer (2 Mar 2011)

Can you sell property 1, and use whatever you get over the €120k mortgage to give you a bit of breathing space on the other loans?


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## Ildánach (3 Mar 2011)

Here is the Department's guidelines on means assessment.  http://www.welfare.ie/EN/OperationalGuidelines/Pages/meansassess.aspx

It clearly states that property that you own and in which you do not live should be assessed at the capital value minus the mortgage.

If the CWO is going to assess you on a different basis, you would want to be asking her why she is doing that.


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## chook (3 Mar 2011)

Ildánach said:


> Here is the Department's guidelines on means assessment.  http://www.welfare.ie/EN/OperationalGuidelines/Pages/meansassess.aspx
> 
> It clearly states that property that you own and in which you do not live should be assessed at the capital value minus the mortgage.
> 
> If the CWO is going to assess you on a different basis, you would want to be asking her why she is doing that.



It says "Any outstanding mortgage registered against the property is deducted from the market value." But who decides what the market value is ???


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## gipimann (4 Mar 2011)

The market value is determined by a valuation from an estate agent, valuer, or similar.


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## mtk (5 Mar 2011)

Billo said:


> The country is up the creek, thanks to THE GO GETTERS OF IRELAND who gambled on the price of property going up and up, and lost. What about the rights of those who did not gamble ?


 
I have to say i tend to agree.


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