# In deep debt and looking for best option



## Alan Eubank (23 Nov 2015)

I have a question, perhaps someone can help?

I am 39 years old, married with four young children.
I bought a house in Monaghan in 2007 for €365,000 mortgage with EBS.
Interest rate variable of around 5%.
Monthly repayments were around €1750.
In 2008 I lost my job, in a very specialised field, and was out of work with no income, eventually got social welfare. €387 per week.
In 2011 I went back to college and retrained.
In 2012 I started working in Northern Ireland, self employed, vat registered, bank accounts and everything with Northern Ireland address.
I have paid Revenue Commissioners and HMRC, vat and income tax. 
However I made little or no mortgage repayments from 2011 to 2013 and accumulated arrears. 

From September 2013 i made steady monthly repayments of around €800 per month. 
On 31st December 2013 EBS wrote to us saying they were commencing legal proceedings. 
On 3rd of January we received Notice of Commencement of Legal Proceedings letter from Ivor Fitzpatrick & Co. Solicitors for EBS
Despite the many letters we wrote to EBS and their legal team, everything just seems to escalate, their Arrears Support Unit at one stage were roaring down the phone at me, that it was too late, everything was going legal! 
Anyway I got in touch with Irish Mortgage Holders Organisation, and after months of sending requested SFS and bank statements to and fro, the best they could come up with was that we had to commence full repayments immediately and to capitalise the arrears of €70,000 other wise the house would be repossessed. 
The banks legal team called personally to our house three times attempting to serve papers. Usually on a Friday evening or Monday evening around 8pm. 
Anyway in 20th December last year, with Christmas tree up and four hungry children waiting on Santa we agreed to the "negotiated" figure and signed all we were asked to by the bank - arrears capitalised, new loan total €398,000!
Incidentally a house across the road from us had been repossessed and sold for €88,000 a few months previous.
New monthly repayments were now €2200.

Anyway, this went ok for a few months, but we missed two months in the summer due to having to do house repairs, and now the bank has added on the new arrears to the monthly repayments and we have to pay €2500 per month for the next 12 months. 
Im the only one working. I work about 100 hours per week. Rarely get to see the children, because I'm never at home, and when I'm home I'm tired. We don't go out, don't go on holidays, don't drink or smoke, just work. I spend my week juggling money, kiting cheques, constantly playing catch up, running to the bank with money. 

I feel like just throwing it all up in the air, I'm wrecked. We also recently learned the house is not insulated to proper standard, has some major defects, and is not in the homebound scheme.

Im wondering because my business and my work is in Northern Ireland, should I just go to Belfast and apply for Bankruptcy. Currently my house is worth about €130,000 and the total debt secured on it is €392,000
I have tried in the past to negotiate some kind of write down but it was a no no, and after all their talk, the bank just want their money in full each month. Im so fed up of it. 

Thanks, 
Alan


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## cremeegg (23 Nov 2015)

Hi Alan

It seems to me that you have 3 possibilities.

*1. Continue as you are trying to pay €2,500 a month to EBS*

PRO:
You get to continue  to live in your house and you will eventually own it. (You don't say how long is left on the mortgage).

Con:
You have no life, 
You may not be able to keep up the payments, (interest rates may rise or your income may fall or other costs may arise.

*2. Go bankrupt in the North.*

Pro:
Debt wiped out, 
Monthly cost for accommodation reduces to what ever rent you would pay for the house.
You would get a life back

Con:
You would probably loose the home
You might never be able to buy your own home again

*3. Reduce the monthly payment to a manageable amount say €800 a month*

Pro:
you would get a life back
you could continue to live in your own home

Con:
The debt would always be hanging over you
EBS would continue to hassle you
The situation would be unresolved.

You said



Alan Eubank said:


> the best they could come up with was that we had to commence full repayments immediately and to capitalise the arrears of €70,000 other wise the house would be repossessed.



The EBS cannot repossess your house. All they can do is ask the court for a repossession order. Read Brendan Burgess posts on other threads. It seems that a court would not order repossession in a case where the borrower is attempting to make some payments.

As regards the EBS calling to your home, well they are entitled to serve a summons on you, there is no reason to try to avoid that, accept the summons, go to court.


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## Bronte (23 Nov 2015)

I think I'd be going for option 2 Bankrutpcy.  I don't belive there are many human beings that can sustain the stress you and your family have had and continue to have and if you're working all the hours in the week just to pay a bank you'll be dead in 5 years.  And I'm serious.  And your family need you more than they need this house.  It is not sustainable on a financial or mental level.  I'm sure you've only given us a flavour of what you've been going through and I imagine it has done untold damage on your life, your marriage and your family and you are wonderful to have tried to keep it all together and to try and pay back your debts.

I think you need to sit down with your solicitor or a financial expert and see what your options are.


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## 44brendan (23 Nov 2015)

Alan this really should be on a separate thread. Mods may change it!
However, you should immediately stop paying any significant amounts to EBS. pay over what you would consider to be a rental equivalent of the property. Forget the pressure and phone-calls. repeat the mantra that you are paying what you can afford. Ultimately EBS will commence re-possession proceedings. However these will take time and once you appear in Court and advise the judge that you are paying what you can, you will likely be granted a stay of proceedings. In the meantime you can continue with your life. However you need to prepare for the ultimate re-possession of the property which may well take a couple of years. Should be regarded as no big deal as you will have prepared for a new life. EBS will ultimately repossess and sell the property which will again take time. Until they have sold the property they are unlikely to take any further proceedings. They may or may not progress for judgment on the balance. may well sell the debt on. However by re-locating to another jurisdiction you will cause them expense in taking any further legal action. Also being located in NI will give you the options of the insolvency legislation there which is more flexible than RoI. With 4 kids and a wife to support even in a worst case scenario there is little that could be taken off you on an installment basis.
IMHO and other PIP's do not tend to offer solutions "outside the box". I.e they will give you no info on UK bankruptcy. You are entitled to re-start your life without having this issue hanging around your neck and by using the system as pointed out above you can give yourself some flexibility to get back on your feet. Losing this house may well be a positive issue I the end. Keep the head up and take care.


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## LondonBoy (23 Nov 2015)

Alan

Your MAD MAD MAD !

Think about what the bank have you doing, your repaying a €2500 per month on a house valued at €130,000

Houses are replaceable,  family time and your health in one time only in all our lives

If you stop repayments now in 12/18 months you will have saved €45,000 euro.... let the bank repro..... then declare bankruptcy 1 year all done clean bill of health

Beware with extra income or savings with Official Assignee in UK Bankruptcy  ...that's another days work but with good advise and  you will be OK

And if anyone starts on about the ethics of protecting yourself and your money remember the banks pay huge money to protect their position ..all far in love and war !!

Nobody can say you will never be able to get buy another home that's rubbish lenders will lend again someday your still young and earning money

Take charge from now on or you the bank will ruin your life for years to come

London Boy
Petitioned For Bankruptcy London 2012

Debt Free
*Best move ever..............*


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## elcato (23 Nov 2015)

LondonBoy said:


> If you stop repayments now in 12/18 months you will have saved €45,000 euro.... let the bank repro..... then declare bankruptcy 1 year all done clean bill of health


Do the first immediately. Save the money and when the bank finally gets a court appearance just turn up and state you case. Just say you cannot afford it. Worst case scenario the judge may ask for vacant possession but highly unlikely. The 50k will be a cushion for you to get on with the next chapter in your life. Good luck. Can you declare bankruptcy and still have 50k in the bank ? Methinks they may want to take that from you so I wouldn't worry about the bankruptcy for now. London Boy has summed up the why's and how's above. Best of luck and don't forget, don't let any threatening letters get to you. Don't answer the phone. Do engage with the courts when that happens.


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## Bronte (23 Nov 2015)

I don't think he should pay nothing until he knows his options, I reckon 44brendan who works in 'banks' is on the right track, pay rental equivalent while exploring the options.


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## LondonBoy (23 Nov 2015)

Bronte

Read the post again , his been thru all this in 2013 
They capitalized his arrears for Christ Sake as a solution 

Repayments went up by 26% in restructuring ....GO FIGURE THAT ONE !


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## TLO (23 Nov 2015)

Folks, Alan (OP) appears to meet all the criteria to utilise the Personal Insolvency (Amendment) Act 2015, which according to a press release from the Insolvency Service of Ireland dated 19 November 2015, is now in operation.

My suggestion would be:
1) In the interim pay EBS the monthly amount that the property would rent for (as per 44brendan above).
2) Engage a Personal Insolvency Practitioner (PIP) to propose via a Personal Insolvency Arrangement (PIA) that the mortgage be written down to the value of the house.
3) EBS will probably reject the PIA (but might not). 
4) The PIP then appeals the rejection to the Circuit Court, and would have a good chance of having the rejection overturned.

If successful, OP keeps the house, and the mortgage is sustainable.


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## epicaricacy (24 Nov 2015)

TLO said:


> Folks, Alan (OP) appears to meet all the criteria to utilise the Personal Insolvency (Amendment) Act 2015, which according to a press release from the Insolvency Service of Ireland dated 19 November 2015, is now in operation.
> 
> My suggestion would be:
> 1) In the interim pay EBS the monthly amount that the property would rent for (as per 44brendan above).
> ...



Brian Stafford's post this morning would suggest that the above approach would be expensive, circuitous and will probably ultimately fail in securing a debt write down. Besides, is it worth it for a house with a market vlue of 88K that's beset by major defects?

Alan
Unless your wife and kids are living in the North, your NI putative petition will not be successful. Besides, Ireland is now set to have a 1 year discharge period and a 3 year IPA (same as NI). If a house in your estate sold for 88K, rent in your area must be very affordable.

My wife and I petitioned for bankruptcy in 2013 and even though we could now afford the mortgage (as in just about survive) - we're relieved to be rid of it. The property was poorly built, we had awful long term tenants living next door and it was too far from the city. In addition, we would have lost our TRS this year making the property even more expensive.

If you are considering bankruptcy, it would be an idea to start working fewer hours now in order to reduce the amount you'd have to pay on the 3 year Income Payment Arrangement. Ideally, you should strive to have your income and outgoings 'matching' to avoid the imposition of the 3 year Income Payments Arrangement / Order, thus leading to a 1 year discharge period. It's important to be 'strategic' in approaching potential bankruptcy.


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## HelpingHand (24 Nov 2015)

You could reduce your monthly payments considerably, so that you are paying the interest only and a small part of the capital balance on the house each month. No court in the land will grant a repossession order against you, the EBS know this. Then seek to renegotiate the loan with better terms, ie a split mortgage, lower interest rate, even a dreaded debt write down etc.


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## Alan Eubank (28 Nov 2015)

Does anyone know or have an opinion, if you think the new Bankruptcy Bill that Willie Penrose is pushing through the Dail would make it better for me to stay here to do bankruptcy?

Thank you for all your responses and advice. 
I have to pay the mortgage on Monday its €2500 (including 500 towards arrears) and I have to pay 2500 every month for the next ten months according to a letter we got a week ago, otherwise they will hand our case to their legal department. So I guess thats €5000 in the next 30 days for the bank and all other bills and Christmas on top of it all with four children. The pressure really is building. Apart from being totally wrecked from working I'm finding it hard to sleep, Im self employed and just keep trying to generate work and get the next money in., i find that I'm thinking of 101 things and eventually fall asleep. Usually for 3-4 hours a night.


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## Bronte (28 Nov 2015)

Alan you can not go on like this the strain is too much.  You also cannot think clearly such is the mess you are in combined with non stop work and pressure.  Pay the bank 500 only on Monday.  Give your wife 1k now towards Christmas or whatever. Take the other 1 k and go hire a *good* insolvency expert to take you by the hand step by step to insolvency or bankruptcy, it will be the best money you will ever spend.  If you can not find a good Pip or expert try one of the guys on here.  

There are solutions but you need to go get help instead if thinking by working non stop you will make a way through your situation when it's clear this is not going to happen.


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## epicaricacy (28 Nov 2015)

Hi Alan

I would petition in the Republic of Ireland if I were you (assuming your wife and children are here of course). Northern Ireland is a nightmare to petition for bankrupcty in (see earlier posts from insolvency specialist Steve Thactcher).

The bill which will be enacted soon will mean an identical discharge period (one year) and the 3 year Income Payment Agreement as that which pertains in the UK. Therefore it's a no brainer really.

If you are NOT interested in maintaining the house (again, another no brainer as it's in massive negative equity, crippling repayments  and poorly constructed) - don't pay another cent towards it. EVER!!!

An insolvency specialist advised us to not pay another cent towards our house as we knew we were going to lose it anyway. It was a massive relief and made perfect sense!!!!!!!!!!!!!!!!!! Besides, it will take them a year or more to repossess the house anyway. Use this time to carefully assess your options in conjunction with an insolvency specialist.

So first things first - don't pay anything on Monday. Keep the money for your family. You have the perfect excuse in that the bank are demanding 2.5K per month and you quite simply can't afford it.

The bank may in time ask you to voluntarily surrender the property or sell in on their behalf. You can decide on the course of action that suits you at the time.

Start working fewer hours. Now is the time to work out how many hours you need to work so that your income and outgoings will match if / when you petition for bankruptcy in order to avoid the dreaded (soon to be 3 year) Income Payment Order. Look at the insolvency guidelines re. allowable outgoings and start thinking strategically. One should really be striving to minimise the hurt to the 1 year discharge period. It's soul destroying to hand over all additional earnings to the insolvency service for 3 years.

There is no rush. Just make the decision to never pay them again and then play the strategic game re. gradually reducing hours worked etc. Once you stop paying the clock starts!!! Continuing to pay anything is throwing your hard earned money away.


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## moneybox (28 Nov 2015)

epicaricacy said:


> Hi Alan
> 
> Besides, it will take them a year or more to repossess the house anyway.


 
Well if Brendan's current 'court crawl' on house repossession is anything to go by, I reckon Allen is good for at least another five years and that's without ever paying another cent to the banks.

Your two and half grand to the bank every month is dead money Allen, you are in too much debt, follow the advice above and go give your wife and kids a good Christmas, ye all deserve it.


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## Alan Eubank (22 Dec 2015)

Hi everyone, thank you for your ongoing responses and advice. I just thought I would update this now, and see what you all think so far.
Well I haven't paid the bank any more money - I can't afford to. I sat for a whole night and did some bookwork, and as I am self employed I seem to have run up an extra 12,000 euro debt this year in my business, purely from taking money out to put towards paying my house mortgage.
I rang the bank, told them I was in difficulty and they said - Download a SFS, fill it in and send it back. So I have done that, I filled it in very honestly and after all is living expenses and utility bills we have about 800 euro a month left over to put towards a mortgage or some arrangement.
I sent the SFS by recorded delivery and have yet to send in the requested bank statements, as Im waiting on originals from our own bank, then I can forward them on.
If I had to have been paying 700-800 per month, my business wouldn't be milked dry trying to pay for this creaking curse of a house. I plan to pay the bank 500-800 at the end of this month - should i?

What do you think the bank will say to my figures?
Thank you.


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## TLO (22 Dec 2015)

Just did a search on daft.ie for rental houses in Co Monaghan.  Average rent appears to be €600 per month.  My instinct would be to pay the bank €600 at the end of this month.  Agreeing with Moneybox, repossession is about five years away.  The new bankruptcy legislation going through the Dail/Seanad is pretty powerful.  Suggest maintaining €600 per month until the new legislation is in force, and then plan a more permanent resolution in light of the new landscape.


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## Bronte (22 Dec 2015)

Well done Alan on sitting down and taking back control of the situation.  My advice on the latest question of whether to pay the bank anything this month is no, have a happy family Christmas instead and in January go and use January's extra money to pay an expert so that you have an independant specialist to show you what to do.  List to poster Epicaricary on his experience and see how relieve he and his wife are to have sorted out their bankruptcy.


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## Lone Star (22 Dec 2015)

The banks do look at what local rents are and seek to get at least that by saying he/She'd have to cough up that amount if they had to rent. If the average rent is €600 locally then if I was going to pay them, I'd pay that less the costs of home ownership (ie I'd take off cost of insurance, life policy, property tax and maintenance) and give them around 500 tops. My current arrangement has ended with my bank and high payments recommence on Christmas Day but there's no way I can afford it (I was delayed in renegotiating with them) so for this month they'll get what I can afford and in line with local rent less the costs. Don't go without this Christmas. The bank will take all they can get and people have to stand up to them. Worth watching TV3's documentary aired last night called 'evicted at Christmas' . It's available to view on their website via their app. Best of luck!!


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## 44brendan (22 Dec 2015)

Alan Eubank said:


> What do you think the bank will say to my figures?


To a large extent it is now immaterial what the bank will say. Your loan is unsustainable based on income and valuation information provided. The bank will know this. However, their primary concern is to ensure a high monthly payment is achieved. You appear to have made payments at the expense of your business cash-flow which may well have threatened the ongoing sustainability of your business.
You need to prioritise your health and your family and as such take the broad advice of making only a rental equivalent payment to the bank each month. Both bankruptcy decision and repossession are decisions for well down the road at this stage and I would be inclined to take Bronte's advice re December and pay nothing this month. Experts/specialists are unlikely to give you any better advice than you are receiving in this forum. Stress and panic are the issues you need to be concerned about as these can escalate very quickly. Sit down with your partner in the New Year and make a long term decision on how you intend to deal with the situation. Enjoy Christmas!!


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## Gerry Canning (22 Dec 2015)

Alan,

Sounds like you have let the good advice seep in and lessen your anxiety = a big plus.
Remember you killed no-one !
Remember you and your family are important.
Remember you are far far from the 1st to be caught in this housing mess.
Importantly . Think about this;
Mr Bank has lent you money,
 Mr Bank has a customer who can,t afford mortgage,
 Mr Bank has an asset worth much less than Mortgage; that all adds up to
Mr Bank (not just you) being worried.

So let the brain -cells cool down over Christmas and review with a clearer head in 2016.
Good luck.


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## RichInSpirit (22 Dec 2015)

Hi Alan! I wish you and your family a great Christmas this year.
Try not to let the money worry you.

You have a wonderful family to stand by you.
The money is not important.


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## Alan Eubank (12 Jan 2016)

Hi Everyone, and a Happy New Year to all. 
Wel I thought Id update everyone on my progress with EBS so far. 
I filled in their SFS and sent it back. I filled it in with realistic figures, and wrote an explanatory note for all the figures i provided. I even included various large debts from the business. Ive sent them the required 6 months business bank statements and also paid them 800euro in January, just so they can't say I'm not paying anything. 
Now I have to send them 3 months personal bank statements, and they've been in touch by phone, looking for my UK tax returns (I'm self employed in UK) and my accountants estimate of my future earnings. 
I notice that anytime they write to you any correspondence is just signed off as the Arrears Support Unit, you never get a name on a letter for you to respond to. 
Very cloak and dagger.


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## elcato (12 Jan 2016)

Alan Eubank said:


> Now I have to send them 3 months personal bank statements, and they've been in touch by phone, looking for my UK tax returns (I'm self employed in UK) and my accountants estimate of my future earnings.


Tell them you will only respond to written requests.


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## 44brendan (12 Jan 2016)

You are looking for them to agree to a reduced payment. Arrears Support Units (ASU) are common to all banks/BSocs and there are no names on letters because there will be no 1 individual dealing with your case. Fairly common practice. Tax returns are needed to verify your historic earnings and accountants estimate of future earnings would also be a standard request from self employed borrowers. Easy option is to send them the information requested as this will only help you getting a decision.
In my experience I have found EBS to be extremely slow in coming back with a decision. In the interim just continue to meet a level of affordable payments.


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## Alan Eubank (23 Jan 2016)

An Update:
I have sent the bank the requested bank statements and my Tax Returns. They called me yesterday by phone and asked me for two things:
1. My accountants estimate of my future earnings. (My accountant says he can write a letter, but that he sees no reason why my income should rise in the foreseeable future. 
2. The bank asked me if I had a proposal for them.
Now that they have asked me to make a proposal, which I was never asked the whole time I was in the MARP last time, I feel the tone may be slightly less confrontational.
However, I want to make a realistic proposal, something that will stand up to scrutiny or stress testing, and that won't be dismissed out of hand by the bank.  Reality is the outstanding debt is €395,000 the house value is about €140-150,000, and I can only afford to pay about €800-€850 per month. Similar houses would rent for €600-€700 per month in the area, and the house next door to us, which is of a similar standard has been for sale for over 12 months.
Any advice on what proposal I should make to the bank would be appreciated. 
Thank you everyone.


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