# Is there any way of challenging paying negative equity shortfall on sold by-to-let?



## breadandjam (22 Apr 2016)

In summary, my partner went bankrupt in the UK, I was left with the negative equity on a buy-to-let after we sold it. It is about €50k. I will have to pay €550 or more a month over 7 years to clear it. Is that my only option? Also going bankrupt is too extreme an option. We can afford this, but I resent having to pay the bank off for an asset already sold. It just seems crazy. Is there any way we can contest this?


----------



## Brendan Burgess (22 Apr 2016)

You are not paying for an asset already sold. 

You are repaying a loan which you took out jointly and severally with someone who was unable to pay their share of the loan. You can pay your liability, so you should do so. 

If you borrowed €20k for your wedding, you wouldn't refuse to repay it on the grounds that you no longer had an asset worth €20k. 

Brendan


----------



## breadandjam (22 Apr 2016)

Hi Brendan, 

Thank you for the reply, I do appreciate it and I do get your point, but the difference here is the bank has already got back what we initially borrowed (195k) plus another 50k. Since we were paying the mortgage plus interest for 10 years. So it is like we borrowed 20k for the wedding, paid it back, plus 10k and now we still have 10k to pay. I know when you borrow to buy an asset it's value can go up or down, but in this case when the value went down, the banks got to package off the debts to nama and get 70bn from the state. I am not here to moan about my situation, there are plenty in worse. And I'm not here to argue the moral rightness of paying back your debts. I am asking do I have to pay this? On the off-chance someone has taken on the bank in this same circumstance and won. I know the system is stacked to favour the banks, not the borrowers.


----------



## Bronte (22 Apr 2016)

I don't think you actually get the point. 

Let's say the house went up in value, would you think you should share the increase with the bank?

And no there is no way out of this because you borrowed the money and you can afford to pay it back.  You can though save yourself some money by paying it back quicker. 

The stuff about banks having things stacked is wrong, did they cause your partner to go bankrupt?  I presume he has had other debt written off, who do you think pays for that?


----------



## breadandjam (22 Apr 2016)

I guess you're all right: I made my bed, now I have to lie in it. I've already got the paperwork all signed and ready to go back to the bank, I just thought I see if that was really my only option! My partner and I have been going through this for about 3 years and this will mean it is finally over: we've moved to the UK, sold our house and everything we have to get back to zero and paid all we could. 

I just wanted to say this forum was the only place I felt I was getting real, authoritative, unbiased and sympathetic advice so to all of you who contribute here a big THANK YOU


----------



## Bronte (22 Apr 2016)

breadandjam said:


> I guess you're all right: I made my bed, now I have to lie in it. I've already got the paperwork all signed and ready to go back to the bank, I just thought I see if that was really my only option! My partner and I have been going through this for about 3 years and this will mean it is finally over: we've moved to the UK, sold our house and everything we have to get back to zero and paid all we could.
> 
> I just wanted to say this forum was the only place I felt I was getting real, authoritative, unbiased and sympathetic advice so to all of you who contribute here a big THANK YOU


Hold on a second you never said you were in the UK.

Can you tell what are the papers you are about to sign.  How much, over what period and what interest rate.  If it's not reasonable I wouldn't be signing anything.  In other words we need to work out if you got a good deal from the bank, especially as you are in a strong negotiating position as you are outside the country.


----------



## breadandjam (22 Apr 2016)

Thanks Bronte. It is a Letter of Agreement. Which states I will pay off the balance owed on two mortgage accounts. 30k or so it at 5.1% interest and the 20k is at 1.1. It is actually to be paid off over 10 years. I asked for that despite the higher ultimate repayment cost because I wanted to reduce our monthly outgoings. After bills (and this £450 or so a month) we have £1500 or so left. Much more than many people, but I wanted to try and stop it being even less. In the end, we're paying off more like €60k because of interest.

We are permanently out of the country. I've work here etc. We go back to visit friends/family, but we want to put the last 3 years behind us. Ireland just brings it all back up again.

The bank's attitude is we can pay it all, so we must. I don't content that we owe it, I just feel the deal is very bad. We can't ever save, have no safety net, and what about sending the kids to college when they're older? How do we pay for that? We've no credit rating over here yet and I'd never want to borrow again.


----------



## dereko1969 (22 Apr 2016)

breadandjam said:


> Thanks Bronte. It is a Letter of Agreement. Which states I will pay off the balance owed on two mortgage accounts. 30k or so it at 5.1% interest and the 20k is at 1.1. It is actually to be paid off over 10 years. I asked for that despite the higher ultimate repayment cost because I wanted to reduce our monthly outgoings. After bills (and this £450 or so a month) we have £1500 or so left. Much more than many people, but I wanted to try and stop it being even less. In the end, we're paying off more like €60k because of interest.
> 
> We are permanently out of the country. I've work here etc. We go back to visit friends/family, but we want to put the last 3 years behind us. Ireland just brings it all back up again.
> 
> The bank's attitude is we can pay it all, so we must. I don't content that we owe it, I just feel the deal is very bad. We can't ever save, have no safety net, and what about sending the kids to college when they're older? How do we pay for that? *We've no credit rating over here yet and I'd never want to borrow again*.



Go bankrupt so.


----------



## Bronte (22 Apr 2016)

breadandjam said:


> It is a Letter of Agreement. Which states I will pay off the balance owed on two mortgage accounts. 30k or so it at 5.1% interest and the 20k is at 1.1.



I do agree with you paying it back.  But I would negotiate hard on the 5.1%.  I'd write back and tell them that you will agree to pay it back if you pay zero interest on both loans.  You tell them you're broke, that you've had a look at your finances and no way can you pay it they way they suggested.  You need to be tough and play hard ball with them.


----------



## breadandjam (22 Apr 2016)

dereko1969 said:


> Go bankrupt so.


I don't want the stigma of that if I can avoid it. My other half has had to do it, it wasn't bad at all actually, but that's because I can earn and keep the family going.


----------



## breadandjam (22 Apr 2016)

Bronte said:


> I do agree with you paying it back.  But I would negotiate hard on the 5.1%.  I'd write back and tell them that you will agree to pay it back if you pay zero interest on both loans.  You tell them you're broke, that you've had a look at your finances and no way can you pay it they way they suggested.  You need to be tough and play hard ball with them.



The only problem is, we're honest, we sent them an SFS so they know what I earn. Once you are over the subsistence threshold they say, that's their money. 

Frankly I'm scared of them.


----------



## 44brendan (22 Apr 2016)

breadandjam said:


> Frankly I'm scared of them.


No need for this at all. We are really quite warm & cuddly creatures (bankers)!!! Your looking at a 50k shortfall so it would be well worth your while to get an intermediary to negotiate with the bank on your behalf. Extremes like paying the full amount demanded plus interest or going bankrupt are rarely necessary. However, you need someone on your side who knows what will wash and can cut a deal for you. Try to get a recommendation as given that you are outside the jurisdiction they will have difficulties in taking any action against you in the UK!!


----------



## breadandjam (22 Apr 2016)

44brendan said:


> No need for this at all. We are really quite warm & cuddly creatures (bankers)!!! Your looking at a 50k shortfall so it would be well worth your while to get an intermediary to negotiate with the bank on your behalf. Extremes like paying the full amount demanded plus interest or going bankrupt are rarely necessary. However, you need someone on your side who knows what will wash and can cut a deal for you. Try to get a recommendation as given that you are outside the jurisdiction they will have difficulties in taking any action against you in the UK!!



You might be, or maybe you're being ironic because the ones I've been dealing with act like demanding, sulky, irrational toddlers who cause you an agony of daily stress and sleepless nights and aren't even aware they do it, all they care about it demanding what they want. Actually, they are like dealing with kids in the terrible twos!

I'll get in touch with Steve Thatcher, he's helped us before. Thanks everyone!


----------



## breadandjam (22 Apr 2016)

breadandjam said:


> You might be, or maybe you're being ironic because the ones I've been dealing with act like demanding, sulky, irrational toddlers who cause you an agony of daily stress and sleepless nights and aren't even aware they do it, all they care about it demanding what they want. Actually, they are like dealing with kids in the terrible twos!
> 
> I'll get in touch with Steve Thatcher, he's helped us before. Thanks everyone!



UPDATE: Steve's advice was to write and tell them you've decided the deal makes no sense and you'll not agree to it. See what they do. Decided to try that.


----------



## Bronte (23 Apr 2016)

Well done you, don't be afraid of them, all the stress is making you act irrationally, no more SFS, do as Steve has told you,and banker 44b has as good as told you you might even be able to negotiate paying less than the full amount never mind interest.

You original post is important for other posters, time and again posters don't give us the full story, it was exceedingly important your omission of being in the uk, and just now another omission, the fact you can go bankrupt - you are in the driving seat, you can dictate to the bank, get tough. 

Why not post us up a draft of your letter and we'll see if you are strong enough.

Those nasty letters from the bank, they're copy paste threats.


----------



## breadandjam (26 Apr 2016)

Bronte said:


> Well done you, don't be afraid of them, all the stress is making you act irrationally, no more SFS, do as Steve has told you,and banker 44b has as good as told you you might even be able to negotiate paying less than the full amount never mind interest.
> 
> You original post is important for other posters, time and again posters don't give us the full story, it was exceedingly important your omission of being in the uk, and just now another omission, the fact you can go bankrupt - you are in the driving seat, you can dictate to the bank, get tough.
> 
> ...



I get your point about giving the right details Bronte, here's another one:

The thing is, we've already told them we're in the UK and threatened them with me going Bankrupt, they called our bluff and said they don't care, pay up. 

I'm all for being tough, we tried that, Steve did talk to them too: it didn't work. They didn't re-negotiate except to give us 10 years to pay rather than 7. And I got the 10 years, not Steve.

My feeling is if I reject this offer they will bring me to court eventually and the court will side with the bank and I'll have to pay plus their costs. The moral right/wrong doesn't matter here, just the law and I know I don't have a leg to stand on legally. They know it too. So unless anyone has any other suggestions, I'm going back to just accepting the situation. 

It's not that I'm passively accepting it, I am accepting it because I have no other leverage to bargain with. 

I really don't think they care how strong the letter is, it's all about power, they have it, I don't.


----------



## 44brendan (26 Apr 2016)

breadandjam said:


> I really don't think they care how strong the letter is, it's all about power, they have it, I don't.


I don't agree with this. You are giving in far too easily and I know this from being on the other side of the table. Call their bluff and let them do their worst. This is unsecured Irish debt and you are outside the jurisdiction.
Obviously the decision on how to react is up to you but There is plenty of scope for doing a deal here. Put the 500 payments aside and build up a small fund to eventually facilitate a lump sum offer should circumstances require.
Ideally look at borrowing 25k from friends/relatives/bank and offer this lump sum as a F&F settlement. Take your time about making this offer. Let them stew for a while. use a 3rd party also to make the offer.


----------



## breadandjam (26 Apr 2016)

44brendan said:


> I don't agree with this. You are giving in far too easily and I know this from being on the other side of the table. Call their bluff and let them do their worst. This is unsecured Irish debt and you are outside the jurisdiction.
> Obviously the decision on how to react is up to you but There is plenty of scope for doing a deal here. Put the 500 payments aside and build up a small fund to eventually facilitate a lump sum offer should circumstances require.
> Ideally look at borrowing 25k from friends/relatives/bank and offer this lump sum as a F&F settlement. Take your time about making this offer. Let them stew for a while. use a 3rd party also to make the offer.



Thanks for the encouragement 44brendan. I've got both letters ready to go ("Yes sirs" and "Eff off") one of them has to be posted by the end of the week, and I keep changing my mind!

When you say "let them do their worst" what is that exactly? It is the unknown that means I can't make a rational decision.

I could save to create a F&F amount, but there's no-where I could get 25k unfortunately.


----------



## breadandjam (26 Apr 2016)

Bronte said:


> Well done you, don't be afraid of them, all the stress is making you act irrationally, no more SFS, do as Steve has told you,and banker 44b has as good as told you you might even be able to negotiate paying less than the full amount never mind interest.
> 
> You original post is important for other posters, time and again posters don't give us the full story, it was exceedingly important your omission of being in the uk, and just now another omission, the fact you can go bankrupt - you are in the driving seat, you can dictate to the bank, get tough.
> 
> ...



All the letter says right now Bronte is "Upon further consideration I have decided to reject your Letter of Agreement" and a reference to that letter in the header.


----------



## 44brendan (26 Apr 2016)

breadandjam said:


> but there's no-where I could get 25k unfortunately.


Yet you state that you can afford to pay them back 50k plus interest over 7 years!!! You are considering bankruptcy which in my view is totally unnecessary. before taking any action against you in the UK they will need to get an Irish judgment. In my view a 25k offer would be very attractive and you should look more closely at this option before dismissing it. i.e. Borrow some from bank and look to friends relations if possible. I would also tend to stick to this lump sum and ignore any threats as 25k on an unsecured debt of 50k would be a good return for them. Find a good advisor who can put more time into your case than Steve Thatcher appears to have (no reflection on Steve but you need someone who will take full responsibility from you and give you the right advice & encouragement.)


----------



## breadandjam (26 Apr 2016)

44brendan said:


> Yet you state that you can afford to pay them back 50k plus interest over 7 years!!! You are considering bankruptcy which in my view is totally unnecessary. before taking any action against you in the UK they will need to get an Irish judgment. In my view a 25k offer would be very attractive and you should look more closely at this option before dismissing it. i.e. Borrow some from bank and look to friends relations if possible. I would also tend to stick to this lump sum and ignore any threats as 25k on an unsecured debt of 50k would be a good return for them. Find a good advisor who can put more time into your case than Steve Thatcher appears to have (no reflection on Steve but you need someone who will take full responsibility from you and give you the right advice & encouragement.)



Thanks 44brendan. Steve has been always 100% available and his advice has always been incisive and we'd never be where we are now without him, so I have to stick up for him, but in the end it is my problem and my decision. 

So, 25k. We did offer them 10k. My parents could afford to offer us that and the bank rejected it. Because we've just moved to the UK 12 months ago, I don't have enough of a credit rating yet for my new UK bank to loan us money. I asked. I don't have anyone else who could afford to loan me 25k, unless you wouldn't mind ;-)


----------



## 44brendan (27 Apr 2016)

breadandjam said:


> unless you wouldn't mind ;-)


Love to oblige but..........


----------



## breadandjam (27 Apr 2016)

44brendan said:


> Love to oblige but..........



Well, no harm in askin ;-)

If AIB do get a payment order of some kind from the court, can they enforce it in the UK? I've no assets here or back home. We sold everything before my partner's bankruptcy to pay as many debts as we could. Would it just be a meaningless but threatening piece of paper as Bronte put it?


----------



## 44brendan (27 Apr 2016)

Technically yes they can use an Irish judgment to take action in the UK. based on my own experience Irish banks rarely do this unless they can see a clear benefit in doing so. I.e. You have unencumbered assets other than a PDH in the UK or you are earning a very high salary.
To a certain extent a lot of this is like a game of "who blinks first". We are looking at a 50k potential outlay here and in my view it's worth putting up a fight to get this debt down to an acceptable level. I think Steve T's response is a good one. He is an acknowledged expert and you should send them a response in line with his recommendation. 10/15k might work but you will need to play hardball first! 1st offer will always be refused if the bank thinks there might be more funds available.


----------



## Bronte (27 Apr 2016)

breadandjam said:


> All the letter says right now Bronte is "Upon further consideration I have decided to reject your Letter of Agreement" and a reference to that letter in the header.



Come on breadandjam we're talking serious money here you can do better than this.  Upon further consideration I have decided to reject your Letter of Agreement because .... 

Steve Thatcher the expert has told you to negotiate hard, 44brendan who is in a bank has told you the same, me, I've seen loads of posters like you but so far not one that I recall actually got chased by a bank to the UK or America.  They don't go after people for 50k.  50k is nothing.  And the costs of pursuing it outway the chances of getting it from you as:

a) you can go bankrupt
b) you have no assets
c) you can quit your job
d) you can exaggerate your spending and thereby prove you have nothing to pay them with

Your letter should be about how broke and poor you are.  How stressed you are.  You wouldn't believe the letters people write to banks.


----------



## breadandjam (28 Apr 2016)

Bronte said:


> Come on breadandjam we're talking serious money here you can do better than this.  Upon further consideration I have decided to reject your Letter of Agreement because ....
> 
> Steve Thatcher the expert has told you to negotiate hard, 44brendan who is in a bank has told you the same, me, I've seen loads of posters like you but so far not one that I recall actually got chased by a bank to the UK or America.  They don't go after people for 50k.  50k is nothing.  And the costs of pursuing it outway the chances of getting it from you as:
> 
> ...



Thank you everyone for your advice and encouragement.


----------



## Lone Star (1 May 2016)

The bank will quite happily take your money and know you have no savings/safety net ..... Put up a fight and negotiate a deal. If it was me I would tell them where to go!! I'd walk and tell them to stick the residual!!!


----------



## breadandjam (29 May 2016)

So, I'll give y'all an update. I agreed to pay. Decided that my peace of mind was more important than a long fight I expected to lose.

So I sent them the signed contract back and details of my UK account for paying the money off. They wrote back and said my other half had to OK this in writing as they were co-signees on the debt. I told them they were wrong, my partner is bankrupt so the debt is just mine. 

Then they wrote back and said they didn't recognise the IBAN I sent them. I sent them a copy of a statement to prove it was the right IBAN. 

Think about that: a bank that doesn't know what an IBAN is.

Can you believe these muppets have to much power? I'm actually fighting these incompetent idiots to pay them a chunk of my income for 10 years!

It is like being mugged by someone so stupid you are trying to help them rob you.


----------



## breadandjam (10 Jun 2016)

Another update, they've figured out how IBAN's work and have given us only 1.1% interest to pay on the balance. It saves us about 5k over the 10 years. Overall, we survived this. I think it has had some longer term psychological effects: I find if there's a problem of any kind I have to solve I go from relaxed to panicky in 5 seconds. I'm guessing this will level out as normality resumes. Thanks again this forum, it really got us through some tough times.


----------

