# The rich don't get pursued for their debts like the poor do



## Brendan Burgess (30 Jul 2021)

Allpartied said:


> I mean rich people do this all the time, just stop paying their debts and not much happens.



What? Where are you getting that pearl of wisdom from? 

Brendan


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## AlbacoreA (30 Jul 2021)

I think Top Trumps of debt repayment is a different topic.


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## Allpartied (30 Jul 2021)

Brendan Burgess said:


> What? Where are you getting that pearl of wisdom from?
> 
> Brendan



You remember our " little bit of trouble" back in 2008? 

Didn't take a funk out of these guys.









						Remember the developers who 'exited Nama'? Most paid less than half their debts
					

51 out of 505 debtors that exited Nama paid 10% or less of their debts.




					www.thejournal.ie
				




And the green jersey guys?  Still living the life, debts forgiven, or forgotten, but certainly not repaid.


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## cremeegg (30 Jul 2021)

Allpartied said:


> I mean rich people do this all the time, just stop paying their debts and not much happens.





Brendan Burgess said:


> What? Where are you getting that pearl of wisdom from?
> 
> Brendan


Among many other examples

" in the wake of confirmation by Dr Garret FitzGerald that in 1993 two banks - AIB and Ansbacher - cancelled debts of almost £200,000 owed by him."









						Former Taoisigh speak out on finances
					

Three former Taoisigh - Mr Liam Cosgrave, Mr Albert Reynolds and Mr John Bruton - have said they never had any bank debts written…




					www.irishtimes.com


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## Brendan Burgess (30 Jul 2021)

cremeegg said:


> " in the wake of confirmation by Dr Garret FitzGerald that in 1993 two banks - AIB and Ansbacher - cancelled debts of almost £200,000 owed by him."



I think that Dr Fitzgerald died penniless. He certainly was not rich.

If rich people owe money to the banks, the banks pursue them.  If people are bankrupt, the lenders will write off their debts. 

I am not sure who the green jersey guys are?   If you are referring to the Anglo case of non-recourse loans, that was a strange case and does not justify the conclusion "rich people do this all the time". 

Brendan


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## Allpartied (30 Jul 2021)

Brendan Burgess said:


> I think that Dr Fitzgerald died penniless. He certainly was not rich.
> 
> If rich people owe money to the banks, the banks pursue them.  If people are bankrupt, the lenders will write off their debts.
> 
> ...



Sure the banks pursue them and they make all sorts of noises.  But, a deal is usually done, interest only, write off, blah, blah, blah.  Meanwhile they swan around in their Shrewsbury Park property, or on the slopes, or in their Amalfi villas.   
Garret Fitzgerald had a hugely valuable property in Ranelagh.  He could have sold it, paid his debts and moved to a Corporation house in Finglas if he was broke


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## Brendan Burgess (30 Jul 2021)

Allpartied said:


> Garret Fitzgerald had a hugely valuable property in Ranelagh. He could have sold it, paid his debts and moved to a Corporation house in Finglas if he was broke



He sold his home as part of a settlement of his debts. 





__





						FitzGerald 'had to sell'  house to pay £170,000 debt
					

FORMER Taoiseach Garret FitzGerald settled a £170,000 debt to AIB for £40,000, the Moriarty Tribunal heard  yesterday.




					www.independent.ie
				




Whatever about promulgating  the myth that "rich people stop paying their debt and nothing happens" , I think it's unfair to Dr Fitzgerald who suffered huge losses and acted very honourably. 



Brendan


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## Allpartied (30 Jul 2021)

Brendan Burgess said:


> He sold his home as part of a settlement of his debts.
> 
> 
> 
> ...



To be fair Garret Fitzgerald was in the hapenny place when it came to wealth.  But he was still pretty comfortable, and he didn't discharge the debt, when he clearly had the means to do so. 
Likewise many wealthy people, move their wealth around, pass it to trusts or family members, to avoid repaying debt. They rarely, if ever, suffer any noticeable reduction in their lifestyle.  Ordinary people, you and me, regard debt as a moral obligation, something we feel duty bound to discharge.  But the rich,  they see it as a means to get even richer.  If it works , great, if it doesn't, then they don't pay up. 
It's the way of things. always has been. 

So, if this couple decide to play the game, stay in their home, stack up the cash and swan around like rich people do, who can blame them


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## Brendan Burgess (30 Jul 2021)

Allpartied said:


> But he was still pretty comfortable, and he didn't discharge the debt, when he clearly had the means to do so.



He clearly did not have the means to do so.  He owed £170k because he had borrowed to buy shares in GPA. 
He agreed to sell his home and paid most of the proceeds against his debt.

He was not a rich man.  He did not die a rich man.


Allpartied said:


> Likewise many wealthy people, move their wealth around, pass it to trusts or family members, to avoid repaying debt. They rarely, if ever, suffer any noticeable reduction in their lifestyle.






Allpartied said:


> I mean rich people do this all the time, just stop paying their debts and not much happens.



Rich people i.e. people who have assets are pursued by the banks and their creditors generally.

Some people who are no longer rich because they have suffered a huge financial set back, have taken steps to avoid repaying their debts.  Some get away with it. Some don't. 

Bankrupt people and divorced people often hide their assets. 

But it should be clear that rich people don't just stop paying their debts.

Brendan


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## Allpartied (30 Jul 2021)

Brendan Burgess said:


> He clearly did not have the means to do so.  He owed £170k because he had borrowed to buy shares in GPA.
> He agreed to sell his home and paid most of the proceeds against his debt.
> 
> He was not a rich man.  He did not die a rich man.
> ...


I admire your staunch defence of the millionaire class.
All I am pointing out is that rich people, who have plenty of assets and future income streams, go through exactly the same shenanigans that this couple are going through,  in order to avoid paying debts. 
They largely succeed.


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## Brendan Burgess (30 Jul 2021)

And all I am pointing out to you is that is nonsense.  Widely believed , but nonsense. 

The problem with it is that when you promote a myth like that, then some people will say  "well, if they don't pay, why should I?" And we end up with the highest mortgage rates in the eurozone. 

Brendan


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## Allpartied (30 Jul 2021)

Brendan Burgess said:


> And all I am pointing out to you is that is nonsense.  Widely believed , but nonsense.
> 
> The problem with it is that when you promote a myth like that, then some people will say  "well, if they don't pay, why should I?" And we end up with the highest mortgage rates in the eurozone.
> 
> Brendan


Well, that wouldn't be so bad would it? 

People who bought houses in 2004, or 2005, might have paid 300k for a semi d in Longford.  Two years later the house is worth 100k and muggins is stuck for the rest. 
Meanwhile the guy who borrowed 6 million quid for a field in Longford, just before things went bang,  is, in theory,  equally stuffed. 
But we both know which one will walk away from the debt and, after some theatricals have their debt written off.


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## Brendan Burgess (30 Jul 2021)

If the guy who borrowed €6m has other assets, he will be pursued for them.  And they will be sold in settlement of his debt.  If he is bankrupt, he will either apply for bankruptcy or the lender may bankrupt him.  

If the guy in the semi-d runs into problems paying his mortgage, he will get all the protections of the CCMA, the PIA regime, Mortgage to Rent etc. 

For both, there are excessive protections in place for the family home. 

But actually, it could well be the same person. He will lose the field and keep his home in most scenarios.

Brendan


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## NoRegretsCoyote (30 Jul 2021)

Brendan Burgess said:


> He clearly did not have the means to do so. He owed £170k because he had borrowed to buy shares in GPA.


He had a residual debt of £30k written off in 1993.

At the time a Taoiseach's salary was about £70k I think and FitzGerald would have had a pension of 50% of this and probably had an Aer Lingus pension as well. So a gross annual income of about as much as his residual debt.

Yes, interest rates were a lot higher then but I'm pretty sure he could have cleared the debt over ten years. It was a preferential treatment of sorts.


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## Allpartied (30 Jul 2021)

NoRegretsCoyote said:


> He had a residual debt of £30k written off in 1993.
> 
> At the time a Taoiseach's salary was about £70k I think and FitzGerald would have had a pension of 50% of this and probably had an Aer Lingus pension as well. So a gross annual income of about as much as his residual debt.
> 
> Yes, interest rates were a lot higher then but I'm pretty sure he could have cleared the debt over ten years. It was a preferential treatment of sorts.


Indeed.
Even, in retirement,  Fitzgerald had a pension of 40k. The average industrial wage in 1998 was 15k. So he could taken the average industrial wage, while retired, and paid the rest of his debt. 
I don't want to pick on Fitzgerald,  he wasn't the worst,not by a long way.  But the ordinary Joe, gets pursued, the bailiffs come.


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## ClubMan (30 Jul 2021)

Allpartied said:


> But the ordinary Joe, gets pursued, the bailiffs come.


After what? Probably 6+ years in the case of the couple in question in the original post. And, as the judge said, even at this late stage if they would just engage constructively with at least the court, but ideally also the lender, they can almost certainly still save their home from repossession. Instead they seem hell bent on pursuing some harebrained Freeman style strategy that is doomed to failure. I'll say it yet again, the judgement is a great read.


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## Shirazman (31 Jul 2021)

Allpartied said:


> Sure the banks pursue them and they make all sorts of noises.  But, a deal is usually done, interest only, write off, blah, blah, blah.  Meanwhile they swan around in their Shrewsbury Park property, or on the slopes, or in their Amalfi villas.
> Garret Fitzgerald had a hugely valuable property in Ranelagh.  He could have sold it, paid his debts and moved to a Corporation house in Finglas if he was broke



He did.    His son Mark purchased the house (on Palmerston Road) from him and allowed Garret and his wife to live in the basement; GF then used every penny of the sale to repay as much of his debts as he could.


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## cremeegg (31 Jul 2021)

Brendan Burgess said:


> I think that Dr Fitzgerald died penniless. He certainly was not rich.
> 
> If rich people owe money to the banks, the banks pursue them.  If people are bankrupt, the lenders will write off their debts.
> 
> ...


The money that Garret had written off was borrowed to invest in GPA at the time of its, eventually aborted, flotation. A friend of mine borrowed money to subscribe to the same flotation. My friend who was 25 years of age at the time had to repay the loan in full. He didn't own a house at the time, nor I suspect did he earn as much as the Taoiseach.


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## Shirazman (1 Aug 2021)

cremeegg said:


> The money that Garret had written off was borrowed to invest in GPA at the time of its, eventually aborted, flotation. A friend of mine borrowed money to subscribe to the same flotation. My friend who was 25 years of age at the time had to repay the loan in full. He didn't own a house at the time, nor I suspect did he earn as much as the Taoiseach.



What's your point?     A 25 year old has a lot more earning potential than an ex-Taoiseach in his 60's who had already sold his house to pay off as much of his debts as he could.  

You'll doubtless recall the Moriarty Tribunal comment, having investigated the matter, that "_FitzGerald's case involved the effective exhaustion of his assets in order to achieve a settlement_"  (and that, in contrast, "Haughey's assets were retained virtually intact").


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## NoRegretsCoyote (1 Aug 2021)

Shirazman said:


> 25 year old has a lot more earning potential than an ex-Taoiseach in his 60's who had already sold his house to pay off as much of his debts as he could


By the late 2000s FitzGerald had pension income alone well into six figures gross annually (also use of a state car and driver).

I'm on balance pretty positive toward him but he got a pretty nice deal from AIB. The loan could have been cleared in full easily within his lifetime.


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## Brendan Burgess (1 Aug 2021)

Shirazman said:


> "_FitzGerald's case involved the effective exhaustion of his assets in order to achieve a settlement_"





NoRegretsCoyote said:


> The loan could have been cleared in full easily within his lifetime.



And if it wasn't, he could have offered AIB a pound of flesh. Would that have satisfied you Coyote?


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## Shirazman (2 Aug 2021)

NoRegretsCoyote said:


> By the late 2000s FitzGerald had pension income alone well into six figures gross annually (also use of a state car and driver).
> 
> I'm on balance pretty positive toward him but he got a pretty nice deal from AIB. The loan could have been cleared in full easily within his lifetime.



Perhaps, unlike you, the bank didn't know back in 1993 that he was going to live until he was 85.  For all it knew he could have dropped dead next morning.  Shame that thay didn't think of contacting you - you could have advised them from the shallows of your wisdom.   (And you'd probably also have advised them to confiscate his State car and kidnap the driver too!)


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## NoRegretsCoyote (2 Aug 2021)

Shirazman said:


> Perhaps, unlike you, the bank didn't know back in 1993 that he was going to live until he was 85.


No, but they could have consulted the CSO life tables which showed life expectancy of 11 for a 67-year-old Irish male (I'm sure Garret did). So a reasonable ability to clear some or all of the residual debt in his lifetime.

Anyway this was a decision made by a private company a long time ago and I have no opinion on its wisdom or otherwise. The point has been made that this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.


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## Brendan Burgess (2 Aug 2021)

NoRegretsCoyote said:


> this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.



I have never heard of any Taoiseach or non-Taoiseach who voluntarily sold their home being pursued for the shortfall. 

This conversation arose from a comment that the rich don't pay their debts and the banks don't pursue them.  It completely ignores the fact that we have the most debtor-friendly bankruptcy and insolvency regime in the World. 

Insolvent people can get a PIA imposed on their bank with the court writing down the debt and reducing the interest rate. 

It is just a populist myth that rich people get away without paying their debts while the majority are hounded for the rest of their life.

Brendan


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## Allpartied (2 Aug 2021)

Brendan Burgess said:


> I have never heard of any Taoiseach or non-Taoiseach who voluntarily sold their home being pursued for the shortfall.
> 
> This conversation arose from a comment that the rich don't pay their debts and the banks don't pursue them.  It completely ignores the fact that we have the most debtor-friendly bankruptcy and insolvency regime in the World.
> 
> ...



I never said the rich don't get pursued for their debts, I said they don't pay their debts. 
They go through years and years of court cases, just like this couple. Sometimes the court rules, but then they appeal, or make a repayment schedule, renege, back to court, round and round we go. 
But they hardly ever pay up and they never suffer any obvious reduction to their lifestyle.


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## Brendan Burgess (2 Aug 2021)

The rich pay their debts because, the lender will go after them and get an order. 

There are some formerly rich people who hide some of their money and who game the system. 

But the rich pay their debts.

Brendan


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## peemac (2 Aug 2021)

Allpartied said:


> I never said the rich don't get pursued for their debts, I said they don't pay their debts.
> They go through years and years of court cases, just like this couple. Sometimes the court rules, but then they appeal, or make a repayment schedule, renege, back to court, round and round we go.
> But they hardly ever pay up and they never suffer any obvious reduction to their lifestyle.


Probably because they have the ability to start again and get back earning.

Remember the media will never give you the real story and also some will hide the real difficulty.
You also will see one or two stories in the press who will exaggerate wildly and then people make assumptions.

One recent case was a former restauranteur. The media made it out that they still enjoyed a great lifestyle. - The truth was a universe away from the media reports.


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## Allpartied (3 Aug 2021)

peemac said:


> Probably because they have the ability to start again and get back earning.
> 
> Remember the media will never give you the real story and also some will hide the real difficulty.
> You also will see one or two stories in the press who will exaggerate wildly and then people make assumptions.
> ...


Maybe, though the most obvious high profile figures, Seanie Fitzpatrick and convicted fraudster, David Drumm, are sitting pretty. Big mansions , multi million euro pensions, wedding at the K Club. The ordinary Joe is given a budget plan, live off 30k a year and the bank takes the rest.


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## Shirazman (11 Aug 2021)

NoRegretsCoyote said:


> Anyway this was a decision made by a private company a long time ago and I have no opinion on its wisdom or otherwise. The point has been made that this kind of offer wouldn't have been made to a non-ex-Taoiseach and I tend to agree.



Any idea how much debt MEP and tax-dodger Mick Wallace has been let away with to date?  Feel free to round your answer to the nearest million.


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## Brendan Burgess (11 Aug 2021)

Shirazman said:


> Any idea how much debt MEP and tax-dodger Mick Wallace has been let away with to date?



He was bankrupted by his creditors. 









						Mick Wallace TD found bankrupt in the High Court
					

Judge grants bankruptcy petition by Cerberus owned fund arising from €2m judgment




					www.irishtimes.com
				




Seems like a lot of the banks went for him and made no allowances. 

Brendan


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## Shirazman (17 Aug 2021)

Brendan Burgess said:


> He was bankrupted by his creditors.
> 
> 
> 
> ...



Walked away from debts of €30m according to the Examiner.    https://www.irishexaminer.com/news/arid-30819553.html


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## Brendan Burgess (17 Aug 2021)

The point originally made was that rich people are not pursued by their lenders.  
The Mick Wallace case does not support this.

They did what they could - they bankrupted him so all his assets were transferred to the Assignee in Bankruptcy.

Now you might think that 1 year is too short a time frame. You might think that bankrupts should give their pension fund to their creditors. You might think that their salary for the next 6 years should be made available to creditors.  And these are all valid arguments. 

But you can't have one severe law for the formerly rich and one easy law for low earners. 

Anyway, the main point is that the banks went after Mick Wallace to the full extent allowed by the law.

Brendan


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## time to plan (19 Aug 2021)

Allpartied said:


> Maybe, though the most obvious high profile figures, Seanie Fitzpatrick and convicted fraudster, David Drumm, are sitting pretty. Big mansions , multi million euro pensions, wedding at the K Club. The ordinary Joe is given a budget plan, live off 30k a year and the bank takes the rest.


David Drumm doesn't have a big mansion. No idea about his pension obviously.


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## AlbacoreA (22 Aug 2021)

Brendan Burgess said:


> And if it wasn't, he could have offered AIB a pound of flesh. Would that have satisfied you Coyote?



I think his point is valid and fairly made. 

That's said this is more about what you can negotiate and some people will have more leverage than others. Be that celebrity, politics etc.


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## Brendan Burgess (22 Aug 2021)

We have a complex legal system in this country so it's very difficult for the banks to go after people, whether they are poor or not.  Court possession of the family home results in a recovery of about 20% of the mortgage.  The banks may go after poor people, but they can get free accommodation for 10 years or more.  It's the same for wealthy people. 

What is a bit different is what happens if I have €100m of assets and €200m of debt. I can drag this out through the courts for years and hope that the assets recover in price so that price increases make me solvent again.  The banks can take legal action and will eventually probably end up realising about €80m.  (They may sell it on for a lot less.) 

NAMA or the IBRC or any other intelligent lender will engage with me. I will probably offer the lender a deal. I will agree to a voluntary sell off of my assets and maximise the value to them in exchange for the following: 
1) Any shortfall on realisation is written off 
2) My family home, which is in my wife's name - is off the table. 
3) They leave me with a non-recourse loan of €10m on the Henry Street project which is worth €8m and I will use my skills to develop the site and repay the loan in full. This also leaves me with a job to do and an opportunity to make an income or trading profit in future years. 

So I get left with the family home and a project which might well make me money.
The lender realises far more than they would have otherwise realised.


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## Brendan Burgess (22 Aug 2021)

This discussion reminds me of all the populist stuff about NAMA being a bail out of the developers.

Some developers took legal action to try to stay out of NAMA or to get out if they were in.
I don't recall any taking legal action to make sure that NAMA took over their loans.

Brendan


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## NoRegretsCoyote (22 Aug 2021)

Brendan Burgess said:


> So I get left with the family home and a project which might well make me money.
> The lender realises far more than they would have otherwise realised.


People don't realise this.

Big loans need active management and personal relationships. They are worth more with debtor participation.

It's not the same with someone who just has negative equity.


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## Brendan Burgess (22 Aug 2021)

Even with just the family home, the vulture funds understand the benefits of cooperation.

They will often agree a deal for a voluntary sale which includes a write off  or write down of the shortfall. 

The borrower gets a fresh start and the lender recovers more money. 

Apart from AIB, the main banks would not agree this in advance for fear of setting a precedent. 

Brendan


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## RetirementPlan (10 Nov 2021)

time to plan said:


> David Drumm doesn't have a big mansion. No idea about his pension obviously.


I don't think he's struggling on the breadline.








						Disgraced ex-Anglo banker David Drumm snapped driving €80k Range Rover Sport
					

Disgraced former Anglo Irish Bank boss David Drumm looks every inch the successful businessman as he exits an €80,000 Range Rover Sport, and strides in to an upmarket deli.




					www.sundayworld.com


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## PGF2016 (10 Nov 2021)

RetirementPlan said:


> I don't think he's struggling on the breadline.
> 
> 
> 
> ...


Yes - he still has his pension... but despite being rich he got the same treatment as a poorer person. He was made bankrupt and has spent time in jail. So he was pursued.


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## time to plan (10 Nov 2021)

RetirementPlan said:


> I don't think he's struggling on the breadline.
> 
> 
> 
> ...


I agree. But 'not struggling on the breadline' is somewhat different from 'Big mansion', I'm sure you'll agree.


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## Sunny (10 Nov 2021)

The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc . Wealthy people also have no problem running up large legal bills to contest bankruptcy at every opportunity. Often in different jurisdictions. For Banks to recover debts of wealthy individuals, they often have to fight their way through multiple layers of financial and legal complexity and they often don't have the stomach for it.

The only reason that people like David Drumm, Sean Fitzpatrick and other bankers got chased like they did was because it was a political imperative to be seen to do it. Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder..... I have no doubt that in time, we are going be setting up a Tribunal to deal with NAMA and how it dealt with the loans and developers.


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## PGF2016 (10 Nov 2021)

Sunny said:


> Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder.....


Gerry Gannon lost his stake in the K club among other things. So he was pursued and lost some of his wealth even if his lifestyle didn't take a major hit. And as Brendan outlined earlier it's often better to engage with these people and work with them to regain some of the money owed. It's not good optics to have NAMA pay Gannon €170k a year but if that results in multiples of that being recovered then it's prudent to do it.


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## Sunny (10 Nov 2021)

PGF2016 said:


> Gerry Gannon lost his stake in the K club among other things. So he was pursued and lost some of his wealth even if his lifestyle didn't take a major hit. And as Brendan outlined earlier it's often better to engage with these people and work with them to regain some of the money owed. It's not good optics to have NAMA pay Gannon €170k a year but if that results in multiples of that being recovered then it's prudent to do it.



Losing a share in a golf club or having to sell your plane is not the same as the average family losing their family home and that is what we are talking about. Lets not talk nonsense that making a multi millionaire property developer bankrupt is the same thing as making the average family bankrupt. If you want to check Gerry Gannon, how many properties were transferred to the wife and were never available to creditors? Know many 'normal' people that can do that?

Again it has nothing to do with rich people don't pay their debts or they somehow are let off by banks compared to poorer people. It comes down to the adage that you owe bank 300k then it is your problem. You owe the bank 300m and it is the banks problem. There are a lot of wealthy people that have been made bankrupt in the past 10 years or owe significant amounts of money walking around with significant wealth as of today. Rightly or wrongly. There are not many average people made bankrupt in the past 10 years still not paying a heavy price. To pretend there is no difference is just nonsense. They might all go through the same legal process but its a very different experience.


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## Steven Barrett (10 Nov 2021)

PGF2016 said:


> Yes - he still has his pension... but despite being rich he got the same treatment as a poorer person. He was made bankrupt and has spent time in jail. So he was pursued.


except a poorer person would be getting "top nosh deli foods"


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## Steven Barrett (10 Nov 2021)

Sunny said:


> The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc .


This is the crux of it. Wealthy people can build up assets outside of the reach of creditors, so they can go bankrupt and come out the other side with those assets intact. 

Normal people just save their money in accessible investment vehicles that their creditors get access to. When they go bankrupt, they come out the other side with nothing. 

The numbers involved may be bigger and seeing someone driving an €80k car after being bankrupt may look as if he got away with it but the process is the same for everyone. 

Steven
www.bluewaterfp.ie


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## PGF2016 (10 Nov 2021)

Sunny said:


> Losing a share in a golf club or having to sell your plane is not the same as the average family losing their family home and that is what we are talking about. Lets not talk nonsense that making a multi millionaire property developer bankrupt is the same thing as making the average family bankrupt. If you want to check Gerry Gannon, how many properties were transferred to the wife and were never available to creditors? Know many 'normal' people that can do that?
> 
> Again it has nothing to do with rich people don't pay their debts or they somehow are let off by banks compared to poorer people. It comes down to the adage that you owe bank 300k then it is your problem. You owe the bank 300m and it is the banks problem. There are a lot of wealthy people that have been made bankrupt in the past 10 years or owe significant amounts of money walking around with significant wealth as of today. Rightly or wrongly. There are not many average people made bankrupt in the past 10 years still not paying a heavy price. To pretend there is no difference is just nonsense. They might all go through the same legal process but its a very different experience.


I never said multi millionaires going bankrupt was the same as the average person going bankrupt. I acknowledged Gannon's lifestyle didn't take a major hit. 

The millionaires definitely fair better. That's not in doubt. But to say they don't get pursued is wrong.


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## elacsaplau (10 Nov 2021)

PGF,

Let me tell you something about the very rich. They are different from you and me.


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## RetirementPlan (10 Nov 2021)

Sunny said:


> The issue isn't that the wealthy don't pay their debts compared to a normal person. The issue is that wealthy people in nearly all circumstances have put a large part of their personal wealth beyond the reach of creditors through legitimate and less legitimate means. Very few wealthy people exit bankruptcy with no personal wealth because of asset transfers, trust structures, pensions etc etc . Wealthy people also have no problem running up large legal bills to contest bankruptcy at every opportunity. Often in different jurisdictions. For Banks to recover debts of wealthy individuals, they often have to fight their way through multiple layers of financial and legal complexity and they often don't have the stomach for it.
> 
> The only reason that people like David Drumm, Sean Fitzpatrick and other bankers got chased like they did was because it was a political imperative to be seen to do it. Having said that, when you read stories of some developers like Gerry Gannon and Sean Reilly to name but two and see them carrying on like nothing happened, then I can see why people wonder..... I have no doubt that in time, we are going be setting up a Tribunal to deal with NAMA and how it dealt with the loans and developers.


Perhaps the real question here is whether pensions, trust structures and other such devices should be available to be excluded from bankruptcy? Perhaps there should be some kind of cap, in line with the 'reasonable expenses' approach that would cap the size of any such assets permitted?


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## Brendan Burgess (10 Nov 2021)

When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were  horrified at the suggestion. 

I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.

Brendan


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## PGF2016 (10 Nov 2021)

Brendan Burgess said:


> When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were  horrified at the suggestion.
> 
> I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.
> 
> Brendan


Did everyone in the group have a substantial pension entitlement? I.e. the turkeys won't be voting for Christmas.

Perhaps only a portion of pensions should be available to creditors.


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## Sunny (10 Nov 2021)

Brendan Burgess said:


> When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were  horrified at the suggestion.
> 
> I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.
> 
> Brendan



Not only did they not make them available to creditors in bankruptcy cases, they didn't even make them available to people themselves in arrears. I knew a couple in their early 40's with over €600k in pension funds while falling behind on a €250,000 mortgage for two years. They were never in danger of losing the house but they still talk about those years as the most stressful two years of their lives and nearly cost them their marriage.


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## Steven Barrett (10 Nov 2021)

Brendan Burgess said:


> When I was on the Expert Group on Mortgage Arrears I proposed that pension assets be fully available to pay one's liabilities. People were  horrified at the suggestion.
> 
> I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.
> 
> Brendan


It's not as simple as that Brendan. Occupational pension schemes are set up under trust for the benefits of the members. The members don't own the assets. This is to protect the members in the event of the employer going bust and it prevents their creditors going after the pension benefits. It would also have the effect of protecting the assets of the employee in the event of them going bankrupt. 

PRSA's and personal pensions are written under contract and should be available to creditors. Maybe there is an understanding that those in schemes have their pension assets protected and it is unfair that the self employed can't protect their assets in the same way? 

Steven
www.bluewaterfp.ie


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## Horatio (10 Nov 2021)

Shirazman said:


> Walked away from debts of €30m according to the Examiner.    https://www.irishexaminer.com/news/arid-30819553.html


30m, to look at him you'd think he doesn't have 2 coppers to rub together, actually maybe that explains his appearance.


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## noproblem (10 Nov 2021)

Allpartied said:


> Seanie Fitzpatrick and convicted fraudster, David Drumm, are sitting pretty. Big mansions , multi million euro pensions, wedding at the K Club. The ordinary Joe is given a budget plan, live off 30k a year and the bank takes the rest.


 As will happen all of us, not much good now. Probate could be interesting though


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## Brian C (11 Nov 2021)

Strings like these get filed with myths and half truths, based on hearsay and populist nonsense. From the top down. If a wealthy person gets into financial trouble he/she will do everything to minimize the damage. There are many angles that can be used. That's what anyone else would do. Self employed people pull all sorts of strokes to hide their cash from The Revenue. People on the dole, claiming housing etc pull all sorts of scams. Public sector workers maximize every allowance under the sun while many do as little work as possible etc. It's human nature. Everyone/every group can be accused of something but does it apply to everyone and does it really matter. Many of you people choose to moan about wealthy people while others moan about many other groups. It's not very productive and sadly with the internet and social media it is getting worse. Unfiltered, uninformed guff.


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## Sunny (11 Nov 2021)

Brian C said:


> Strings like these get filed with myths and half truths, based on hearsay and populist nonsense. From the top down. If a wealthy person gets into financial trouble he/she will do everything to minimize the damage. There are many angles that can be used. That's what anyone else would do. Self employed people pull all sorts of strokes to hide their cash from The Revenue. People on the dole, claiming housing etc pull all sorts of scams. Public sector workers maximize every allowance under the sun while many do as little work as possible etc. It's human nature. Everyone/every group can be accused of something but does it apply to everyone and does it really matter. *Many of you people choose to moan* about wealthy people while others moan about many other groups. It's not very productive and sadly with the internet and social media it is getting worse. Unfiltered, uninformed guff.



Who are YOU people?? Obviously we don't exist on the same plane of existence as you but we are trying hard..... As you moan about people moaning about people....


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## Shirazman (11 Nov 2021)

Brian C said:


> Everyone/every group can be accused of something but does it apply to everyone and does it really matter.



Not it doesn't; and yes, it does.


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## NoRegretsCoyote (11 Nov 2021)

Brendan Burgess said:


> I don't see why any assets should not be available to creditors - even if they have the label "pension fund" on them.


I think in a PIA there is scope for creditors to access "excessive" pension contributions made in the three prior years.

I think a better test would be how large the fund is relative to someone's age. You could plausibly have a 55-year-old with a €1m pension fund looking for a PIA to write off all debts, then able to access the pension a mere five years later.


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## Brian C (11 Nov 2021)

Sunny said:


> Who are YOU people?? Obviously we don't exist on the same plane of existence as you but we are trying hard..... As you moan about people moaning about people....


No I am like everyone else. My point is we can spend our time giving out about different groups of people, using some facts but also a lot of generalized unsubstantiated commentary. It achieves nothing except labeling and tarnishing whole groups of people. For example, if you believed everything that is said and written about landlords they would be gathered together and collectively hung in College Green. The truth is that the majority are very good landlords as by being so their tenancies tend to go well and are less problematic. As for wealthy people walking away from their debts, it is very complicated and every case is different. As a related question. Do you know how many people who were very wealthy and then lost everything in the 2008 crash killed themselves? The number is surprisingly high. They didn't get away with anything but nobody thinks of them. I'll say no more.


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## Brendan Burgess (11 Nov 2021)

Brian C said:


> Do you know how many people who were very wealthy and then lost everything in the 2008 crash killed themselves? The number is surprisingly high.



Would you like to enlighten us and provide a link to the source of your data?


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## arbitron (11 Nov 2021)

Joe Soap suffers far more in these situations than the wealthy individual who has the resources, advice, and connections to cushion their fall.

I've seen both sides up close. One relative has been through the ringer for a relatively small debt they defaulted on because of sudden unemployment. They tried absolutely everything they could to get it sorted, bank refused to engage and made the situation much worse than it needed to be for everyone involved. Many of us know people in this position and they survive but it's really tough.

Another family member is a high-profile name. They took big risks and purportedly lost it all but in fact moved massive wealth out of the reaches of the authorities, apparently legally done. But the degree of skullduggery, melodrama, and brazenness involved is sickening. This person claims to be destitute while in fact living a life that would make the royals blush. They will live out their lives very comfortably.

There is just no comparison.


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## Brendan Burgess (11 Nov 2021)

The thread title is very clear and nothing has been posted here which suggests that it is true.

The lenders pursue people who owe them money when they can. 

It may be true that rich people put money beyond the reach of their creditors whereas poor people don't. 
It may even be true that being pursued has a bigger impact on the poor than on the rich. 

I don't think that they are true, but they may be. 

But it's absolutely clear than lenders pursue rich people as well as poor people to recover their debts.

Brendan


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## Firefly (11 Nov 2021)

NoRegretsCoyote said:


> I think a better test would be how large the fund is relative to someone's age. You could plausibly have a 55-year-old with a €1m pension fund looking for a PIA to write off all debts, then able to access the pension a mere five years later.


I presume those with defined benefit pensions, worth 1m in the open market, would also be included in this group?


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## NoRegretsCoyote (11 Nov 2021)

Firefly said:


> I presume those with defined benefit pensions, worth 1m in the open market, would also be included in this group?


Look, no system is perfect and high-ranking career bank staff and civil servants with DB pensions tend not to be people seeking PIAs.

As a general principle a pension shouldn't be a vehicle to (accidentally or otherwise) shield *very large* amounts from creditors.


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## Steven Barrett (12 Nov 2021)

NoRegretsCoyote said:


> Look, no system is perfect and high-ranking career bank staff and civil servants with DB pensions tend not to be people seeking PIAs.
> 
> *As a general principle a pension shouldn't be a vehicle to (accidentally or otherwise) shield very large amounts from creditors.*


Are you going to change the laws of trust law? If you contribute to an occupational pension while bankrupt/ company insolvent, those monies can be recovered. You cannot change the law just because a pension fund is large. What if someone was an ordinary employee who had contributed to the pension, maxing out AVC's for 40 years? Through diligent savings their pension is worth €1.5m. Should they be gone after too? You can't have laws that are conditional on who they apply to.


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## Brian C (12 Nov 2021)

Sunny said:


> Losing a share in a golf club or having to sell your plane is not the same as the average family losing their family home and that is what we are talking about. Lets not talk nonsense that making a multi millionaire property developer bankrupt is the same thing as making the average family bankrupt. If you want to check Gerry Gannon, how many properties were transferred to the wife and were never available to creditors? Know many 'normal' people that can do that?
> 
> Again it has nothing to do with rich people don't pay their debts or they somehow are let off by banks compared to poorer people. It comes down to the adage that you owe bank 300k then it is your problem. You owe the bank 300m and it is the banks problem. There are a lot of wealthy people that have been made bankrupt in the past 10 years or owe significant amounts of money walking around with significant wealth as of today. Rightly or wrongly. There are not many average people made bankrupt in the past 10 years still not paying a heavy price. To pretend there is no difference is just nonsense. They might all go through the same legal process but its a very different experience.


I think you are probably correct on all fronts. The only thing I would add is that a wealthy person eg a developer probably has more sources of income, advisors, angles to play with in the good days than most of us and when he/she gets into trouble he/she has more weapons to fight with and more ways or surviving somewhat intact. Us lesser mortals don't. That's how you end up with the position where the likes of the developers post the bust are now looking reasonably ok. The truth is that most were massively damaged but they were in a position to get going again quickly. But people see them as untouched.


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## Brendan Burgess (12 Nov 2021)

The whole idea of bankruptcy is to give people a fresh start.

We want developers to get going again. They have the skills to pull together different resources to build houses and offices.


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## Brendan Burgess (12 Nov 2021)

And look at the PIAs which are being done for ordinary people.

Mortgages are being effectively made interest only at tracker rates. 

These are being imposed on the banks. 

And many ordinary people go bankrupt and get rid of their debts.

Brendan


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## Allpartied (12 Nov 2021)

Brendan Burgess said:


> The whole idea of bankruptcy is to give people a fresh start.
> 
> We want developers to get going again. They have the skills to pull together different resources to build houses and offices.



I guess we have to accept that, if they are a scarce skillset. 

But, lets make the game fairer. If the state, ultimately, has to come in and bail out reckless borrowing by these superstars, it should be able to take a bigger slice of their profits when they are making the millions.  (50 or 60% CGT on these type of activities would be fair). 

But we can already hear the whinging and moaning from the millionaire class, for whom a 20 million euro profit is not enough.   They want the full 50 million.


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## Shirazman (12 Nov 2021)

Allpartied said:


> But we can already hear the whinging and moaning from the millionaire class, for whom a 20 million euro profit is not enough.   They want the full 50 million.



I can't.   Perhaps I need to join your golf club.


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## Brendan Burgess (12 Nov 2021)

Allpartied said:


> If the state, ultimately, has to come in and bail out reckless borrowing by these superstars,



Eh no.

That is the populist view, which is wrong.

It was the ordinary depositors who were guaranteed by the state not the developers.

The guarantee was up to €20k which was enough in my opinion but it was made unlimited. So all the Credit Unions were saved from destruction by the bank guarantee.

Brendan


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## Allpartied (12 Nov 2021)

Wj


Brendan Burgess said:


> Eh no.
> 
> That is the populist view, which is wrong.
> 
> ...


Why were the banks unable to honour their depositors?


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## NoRegretsCoyote (12 Nov 2021)

Steven Barrett said:


> You cannot change the law just because a pension fund is large.


I don't know the ins and outs of trust law and the Personal Insolvency Act.

But as it stands, all else equal, a million euros in a deposit account goes to creditors and a million euros in a pension fund does not. I don't think this is particularly fair.


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## RetirementPlan (12 Nov 2021)

Steven Barrett said:


> You cannot change the law just because a pension fund is large.


Actually, you can - you can have law that depends on the size of the pension fund, just as many current tax laws work at present. You could indeed allow a modest pension, in line with the Reasonable Expenses approach, while not allowing the kind of pension that will fund a Range Rover. There's nothing unusual about a principle that pensions of different sizes are treated differently.


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## Brian C (12 Nov 2021)

Allpartied said:


> Wj
> 
> Why were the banks unable to honour their depositors?


They ran out of cash including the depositors money.


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## Steven Barrett (12 Nov 2021)

NoRegretsCoyote said:


> I don't know the ins and outs of trust law and the Personal Insolvency Act.
> 
> But as it stands, all else equal, a million euros in a deposit account goes to creditors and a million euros in a pension fund does not. I don't think this is particularly fair.


The bankrupt does not own the €1m in the pension pot, they own the €1m on deposit. 





RetirementPlan said:


> Actually, you can - you can have law that depends on the size of the pension fund, just as many current tax laws work at present. You could indeed allow a modest pension, in line with the Reasonable Expenses approach, while not allowing the kind of pension that will fund a Range Rover. There's nothing unusual about a principle that pensions of different sizes are treated differently.


In the context of the discussion, having those limits can have an impact on a 65 year old who has saved into his pension for his lifetime and made a mistake by buying an investment property in Bulgaria. Or someone in a defined benefit pension who receives €33,000 a year pension. If they were in the public service, they would have earned €66,000. Hardly rich but their pension would come into play if there was a limit of €1m. 

And how would a public servant's pension be treated? It is unfunded, so there is nothing to take. They are protected but someone in a private pension isn't?


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## Brian C (12 Nov 2021)

Brendan Burgess said:


> Would you like to enlighten us and provide a link to the source of your data?


The Journal.ie quotes a survey by The National Suicide Research Foundation stating that between 2008 and 2012 male suicides increased by 470 and this increase was due to the recession/bank crash. A number of years back I read an article somewhere about the death of a particular developer that listed him as the 35th developers/business people to have committed suicide due to the crash. To me it made/makes sense, you are a paper millionaire, living the life, along comes a crash and you can't deal with the loss of money, you "good" name etc. Point is that a lot of so called wealthy people got hit very hard.


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## Brendan Burgess (12 Nov 2021)

Brian C said:


> Point is that a lot of so called wealthy people got hit very hard.



I have no doubt at all about that. In fact, I have made the point myself.

But I would not trust 
1) Your recall of
2) The Journals' quotation  of 
3) The National Suicide Research Foundation findings.

Brendan


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## Brendan Burgess (12 Nov 2021)

Allpartied said:


> Why were the banks unable to honour their depositors?



Because they lent irresponsibly to property developers and mortgages to ordinary people. 

But the two main banks which went insolvent were Anglo and Irish Nationwide.  Their depositors got a higher rate because of the perceived riskiness of those banks. And yet the same depositors were guaranteed in full by the taxpayer.

The banks should have been let go bust and the bondholders and ordinary depositors with more than €20k should have lost their money.

Brendan


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## RetirementPlan (12 Nov 2021)

Steven Barrett said:


> The bankrupt does not own the €1m in the pension pot, they own the €1m on deposit.
> 
> 
> 
> ...


I wouldn't claim to be an expert, but surely it is possible to put a valuation on offshore property or a DB pension, just as other assets are valued in bankruptcy? Or put a lien on the ongoing payments, so the creditors get paid from the ongoing pension payments, over a certain cap?


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## Allpartied (12 Nov 2021)

Brendan Burgess said:


> Because they lent irresponsibly to property developers and mortgages to ordinary people.
> 
> But the two main banks which went insolvent were Anglo and Irish Nationwide.  Their depositors got a higher rate because of the perceived riskiness of those banks. And yet the same depositors were guaranteed in full by the taxpayer.
> 
> ...


So, the state bailed out depositors, because of reckless borrowing/lending.
But financial stability of the entire country was at stake. The banks would not have opened,  large queues would have formed, possible public disorder, a complete collapse of any trust in high Street banks.
I agree that the excessive interest rates, should have been clawed back, if practical. But punishing prudent savers for the sins of Johnny Bigpants and his chums in the banks was never going to happen.


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## NoRegretsCoyote (12 Nov 2021)

Steven Barrett said:


> The bankrupt does not own the €1m in the pension pot, they own the €1m on deposit.


Yes one asset is far more liquid but it is absurd to claim that someone has no ownership of their pension.




RetirementPlan said:


> I wouldn't claim to be an expert, but surely it is possible to put a valuation on offshore property or a DB pension, just as other assets are valued in bankruptcy?


Of course it is! Divorce settlements frequently involve the assignment of a portion of DC pension rights to the other spouse. There is no fundamental issue with changing the law to allow the same for the benefit of creditors in certain circumstances.


Steven Barrett said:


> In the context of the discussion, having those limits can have an impact on a 65 year old who has saved into his pension for his lifetime and made a mistake by buying an investment property in Bulgaria.


It's merely a question of degree. I'm not advocating life-long millstones of confiscation of all pension funds. I just think that pension assets (particularly when very large) shouldn't be sacred.


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## RetirementPlan (16 Nov 2021)

Great to see that good oul Bernand can hang onto the Stephen's Green Centre for the family and kids - warms the cockles of yer heart;









						EU ruling protects developer Bernard McNamara’s pension from creditors
					

The builder was declared bankrupt in the UK in 2012




					www.irishtimes.com


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## time to plan (19 Nov 2021)

RetirementPlan said:


> I wouldn't claim to be an expert, but surely it is possible to put a valuation on offshore property or a DB pension, just as other assets are valued in bankruptcy? Or put a lien on the ongoing payments, so the creditors get paid from the ongoing pension payments, over a certain cap?


And maybe a lien life assurance / death benefit payouts, so the sneaky buggers don't wriggle out of it by popping their clogs?


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