# Death of a co-borrower and enforced Insolvency, engaging doesn't work



## Nailligo (22 Oct 2016)

I hope this doesn't become a rambling tome but I'll try to make this as short as possible. My father was co-borrower on my mortgage and died in 2011, I started talking to the bank in May 2013 about the potential for difficulty with making repayments and how I'd like to try to come to some arrangement.
There were a lot of emails and phone calls over and back, I continued to pay my mortgage which was over 50% of my income and never let it go in to arrears. They eventually told me they would no longer talk to me about it and that I was to get a solicitor so I did. He started talking to them in May 2014 and by Jan 2015 approx, they stopped talking to him, insisting that I got financial advice, which I did, this person then told me to talk to a PIP. I started talking to a PIP about my possible options, reduce repayments by maybe 30%, shelve some of the mortgage, go interest only etc etc, he made contact repeatedly with the bank and each time they just said no, they wanted the house. I said I would sell the house and then the shortfall could be discussed as some informal arrangement, they said no. 
In September 2015 I was told that my ONLY option was the surrender, something I never offered as a solution from the start but it seemed that this was the only thing that the bank would agree to.
In December 2015, I was granted insolvency, something I knew in my heart and soul was wrong but felt after talking for 2 and half years, I had no other options.
In February this year the keys went back to the bank and as of today, the house is still empty.

Am I mad to think I was shafted in this situation? That the banks and PIPs are in cahoots and no matter what sort of reasonable offer the individual makes, it will never be accepted unless it's what the bank want from the start.
Not one person I have told about this situation agrees that this is what should have happened, between rent and the Insolvency repayments I am currently paying out more than I was when I had the mortgage, something that makes no sense whatsoever.

Do I have any recourse?
When I finally get my credit rating back on track, I will be tool old to even hope to get a mortgage if I was so inclined, and I will spend the next 5 years with no credit at all. I was refused an overdraft of €400 recently for example.
I was never in arrears because I didn't want to draw the bank on me, I was doing things by the book. My father's suicide left my family in a difficult situation financially and we were all put on the back foot.
My brother on the other hand, didn't engage with the bank, my father was his co-borrower too and he's still in his house, paying half of his repayments for the last 4 years with no threat of losing the house at the moment anyway, he was recently told they would write down his repayments indefinitely. How is this fair?
I am a single woman which I feel played in to the hands of the bank, no dependents, not a widow, not a parent so it was easy to back me in to the corner I believe. That may sound a bit paranoid but I do believe that I was an easy target.

There is no hard and fast rule, I understand that, but how can engaging with the bank leave you up the creek without a paddle but not engaging can get you some sort of deal in a lot of cases?


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## Suebee (3 Apr 2017)

I can't understand this. What bank were you dealing with? If there were no arrears  why did you have to surrender the house?


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## Nailligo (4 Apr 2017)

I was with AIB. Despite offering many suggestions I was left with only one by the bank and PIP as I saw it. 'Voluntary' surrender.
I feel the bank and PIP worked to their own solution. I was left out of a lot of the discussion.
As I said, the bank stopped talking to me, then my solicitor, they were working to their own agenda. 
I was misinformed along the way I believe and found information very hard to come by until it was too late.
I was made to feel like I couldn't disagree with either the PIP or bank so kept the head down. Pathetic I know.


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## TLO (4 Apr 2017)

This is a depressing story.  It probably would have been possible to keep you in your house even if it meant unilaterally reducing payments to AIB.  But it can take a thick skin to take such action and it isn't a solution for everybody.  Were you shafted?  Hard to say but one is left with the sense that you didn't get the optimum advice for your particular situation and outlook.  The "no-veto" PIA legislation came into force on 20 November 2015 and a PIP worth his/her salt could have used the threat of this to restructure your mortgage making it more affordable. Can you get redress?  With great difficulty.  Probably best to try and move on, easy to say, not as easy to do.


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## Brendan Burgess (4 Apr 2017)

Nailligo said:


> I continued to pay my mortgage which was over 50% of my income and never let it go in to arrears.





Nailligo said:


> In September 2015 I was told that my ONLY option was the surrender,



Hi Nailligo

As Suebee points out, your story makes no sense.  If you were not in arrears, you did not have to surrender the house. 

Can you give the following information.
1) Did you ever reach a restructuring agreement with the lender?
2) Were you ever in arrears? 
3) What was the balance on your mortgage? 
4) What was the value of the house when you surrendered it? 
5) Which lender? 

Brendan


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## Nailligo (4 Apr 2017)

I do feel I was shafted alright. I offered reduced repayments, even to sell the house myself and discuss the shortfall afterwards. I believe I was reasonable all along. The house is still empty over a year on so the bank didn't NEED it. 
I would love to look in to redress options but a paycut has changed my situation again. Another round of discussions is around the corner. A new proposal has gone in to the bank and I have to wait and see what they decide. I have no assets for them to try to take. House, contents and car all went so they can't pick any more off this carcass.
The problem is, since the insolvency happened, I have heard from a number of people that my PIP only has the banks best interest at heart. They're ex AIB themselves so I think the bias swayed in their favour. 
It was hard to get info at the time I was going through everything because it was all so new, and hindsight is always 20/20. When you're in the thick of it you grasp whatever seems like the 'best' solution even if your gut is telling you otherwise. 
Trying to get some redress would be ideal but again...I have to find the options open to me


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## Nailligo (4 Apr 2017)

Hi Brendan
Are you saying I make no sense or what happened?
1. I was originally told they would shelve half of it. That was taken off the table.
They mentioned interest only but never followed through. 
The bank offered a reduction of 200 a month in my repayments. I asked for 400. No other option was given. (It was 1200 a mth - I asked for 800)
2. No. I made the effort all the time to keep paying the mortgage in order that my case was stronger and the bank would see I wasn't defaulting for the hell of it. I stopped paying when the protective cert was issued.
3. 250k...original mortgage was 271k in 2006
4. 140k approx (valued by an estate agent)
5. AIB


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## TLO (4 Apr 2017)

Apart from the mortgage, were there any other debts?


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## Nailligo (4 Apr 2017)

TLO said:


> Apart from the mortgage, were there any other debts?



A credit card that I was paying off and a car loan that I was also maintaining. Nothing major though. I was on top of things but the loss of my fathers contribution to my mortgage made a huge difference.


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## Suebee (4 Apr 2017)

Was there no option to rent out rooms or indeed rent out the whole property?


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## Brendan Burgess (4 Apr 2017)

Nailligo said:


> A new proposal has gone in to the bank and I have to wait and see what they decide.





Nailligo said:


> In December 2015, I was granted insolvency, something I knew in my heart and soul was wrong but felt after talking for 2 and half years, I had no other options.



Are you in a Personal Insolvency Arrangement now?  
What is the term of the PIA? 

I presume that the shortfall was written off as part of the PIA? 

Brendan


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## Brendan Burgess (4 Apr 2017)

Nailligo said:


> I have heard from a number of people that my PIP only has the banks best interest at heart.



Extremely unlikely. The PIP has to strike a balance between the interests of the lender and the interests of the borrower.  You were under no obligation to accept the proposed PIA. Nor was AIB. 

But it seems that your PIP proposed a PIA. 
You accepted it. 
AIB accepted it. 

I can't see why you are complaining now. 

Brendan


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## Nailligo (4 Apr 2017)

Suebee said:


> Was there no option to rent out rooms or indeed rent out the whole property?



I couldn't have rented out the whole property and afforded somewhere else to live as rent at the time wouldn't have covered the full mortgage. 
Renting a room at the time would have got me about 200 a month due to location.


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## Nailligo (4 Apr 2017)

Brendan Burgess said:


> Extremely unlikely. The PIP has to strike a balance between the interests of the lender and the interests of the borrower.  You were under no obligation to accept the proposed PIA. Nor was AIB.
> 
> But it seems that your PIP proposed a PIA.
> You accepted it.
> ...



I was only looking for opinions on what happened. I felt I was screwed over and at the end of the day I lost a lot more than I gained by being given no option other than what happened. 
I accepted what was proposed rather than refusing to pay my mortgage and being dragged through the courts over the next few years which is what happens to other defaulters. It was the only solution that was agreed by the bank so what could I have done? Keep asking indefinitely? I wanted to get on with my life.
The bank stopped talking to me and then my solicitor. I didn't know what else to do. 
I wrote the post in October. My circumstances have changed again since, I was just venting a bit I suppose. I thought that was what these places were for.


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## Brendan Burgess (4 Apr 2017)

Hi Nail 

That is absolutely what askaboutmoney is for.

But you still haven't answered some fundamental questions so we can't really give you any informed suggestions: 

How long was your period of insolvency? 
Was it a PIA or a Debt Settlement Arrangement? 

If the bank is still coming after you for the shortfall, it makes no sense. 

Brendan


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## Nailligo (4 Apr 2017)

Hi Brendan,
Insolvency is for 5 years. I'm one year in to it. I pay 460 a month to the bank in the arrangement. It's a PIA.
Reasonable living expenses are set at 1050 a month and I pay rent now too. I am worse off than I was with a mortgage which to me seems ridiculous. 

 There has been no mention of them chasing me for the shortfall...I was only saying that I was willing to discuss it with them at the time if they had let me sell the house myself. 

The house is empty so I was pointing out that instead of allowing me pay a reduced mortgage for a period of time they took the house and let it sit idle. 

N


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## TLO (4 Apr 2017)

So a PIP took a vulnerable borrower into a PIA which required her to give up her home?  This doesn't feel right because the personal insolvency legislation was designed to try and keep people in their homes.  If Nailligo had unilaterally reduced her monthly mortgage payment to €800 per month then she would still be in her home today.  It's water under the bridge.  Unless, unless, if AIB haven't sold the house yet, and Nailligo has a really thick neck, she could in theory move back in, start paying AIB €800 a month, and "fail" the PIA by ceasing payments on it.  AIB would be much better off as they would be getting €800 a month in comparison to the fraction of €460 that they are currently getting.  And Nailligo would be back in her home.


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## Nailligo (4 Apr 2017)

Hi TLO, 
Your first point is what has never sat right with me, Insolvency is there to protect the owners while coming to an equitable solution for all parties. 
The locks were changed in the house after I left, the power turned off and it has been vandalised. If I did go back to it, it would be more hassle than it's worth right now. 
I was told along the way that being single means the bank don't consider it a 'home'. A single person isn't entitled to that sort of 'luxury' apparently. 
I have a dog, at one stage I was told to get rid of it to save on outgoings, this is the sort of approach I was dealing with from the bank.


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