# Over €400K in negative equity/debt. Worried sick!



## Trooper (20 Mar 2013)

Personal and income details
Income self:Sole trader currently 0 income as just started up .
Income history: e.g. "Was MD of company that went into liquidation in Dec 2012, currently setting up new business as job hunting was not very fruitful
Income partner/spouseAYE recently got raise from €60k to €65k
Income history:Stable 
number of children: None, but just found out wife is pregnant 
Amount of Mortgage Interest Supplement received: 0
Home loan
Lender: PTSB
Amount outstanding: €625,000 including arrears of €45,000
Value of home: €255,000
Interest rate: specify whether tracker or SVR or fixed rate: SVR 4.34%
Monthly repayment: €2,844
Amount in arrears: €45,000

Summary of discussions and agreements with the bank:
On interest only since 2010 (I think) was keeping on top of it even with interest rate at 5.2% (fixed) Early last year work went bad and knew we would never be able to keep on top of payments so decided to sell it and see if we could do a deal with the bank for the balance, then go and rent. We got an offer agreed at €255,000 in July 2012 and I met with the bank, they recommended I dont sell it as I will always have to repay the money and I will now need to go renting, they suggested they pay what I can and hopefully things will come around, I asked what he meant by that and his reply was..... "the value of the house may rise again or you might win a few quid" To me, that  said it all, so I notified my solicitor that I wanted to sell the house and needed authority from the bank, after 8 months of me chasing my solicitor for an answer they finally came back last month stating PTSB will not agree to sell the house (the interested buyer had long gone now anyway but I didn't inform the bank of this, as if they were to agree I would have put it up for sale again) My solicitors response was that they dont really care, they want the money back. I informed them I havent paid anything in about 8 months and I got the same response from my solicitor "they dont seem to care"


Other loans and creditors - delete those which don't apply to you
Overdraft: BOI €13,500 currently being pursued by banks solicitors
Personal loan: BOI €10,000 currently being pursued by banks solicitors
Credit Card: MBNA €15,500 legal letters sent etc
Family loan: i.e. I borrowed money from my Mother and am repaying her mortgage for this is €32,000 outstanding €500 p/m with 6 years left
Management fees: €4,000

No savings or investments 


How important is retaining the family home to you? Not important

Which of the following best describes your situation?
I don't care about keeping the family home. 


Any other relevant information

What is your preferred realistic outcome? 
As many people on here have said before, I just want to get my life back to some level of normality. My wife has just become pregnant and its scaring the life out of me as to what to do. I have been self employed most of my working life and the main reason of my large debt was remortgaging/borrowing to invest into businesses that have now failed. I am not entitled to any social welfare due to my wife's salary and I am trying  start up a business with no money, I am optimistic about the business however there are costs associated with setting up before I get to see any type of wages for myself, I am funding the business with my wifes wages as my credit history will be terrible by now. My ideal solution would be to come to a reasonable long term solution via the personal insolvency agreement as if I decided to go to the UK bankruptcy route that would mean my wife leaving her job which is our only source of income, whatever we do my wife will have to stay in her highly stressful job until baby is born and hopefully my business will have started to earn money by then. All in all not a great situation but Im not here to moan, I took the loans out, if iot had of worked out I would be laughing, it didn't now I have to face the consequences, Im just looking for some advice on options, I have tried calling some of the experts out there however most charge an upfront fee just to talk to them, I can understand why they do that but I just cant afford it, we have cut back on everything to try make ends meet and am driving around in a 18 year old borrowed car that I reckon will explode any day now. Anyway, thanks for any advice


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## oldnick (20 Mar 2013)

No advice from me ( that others would regard as "correct") except to ask - what ,really, are you worrying about ?

Your only worry should be your wife and  child's health. Nothing else.

So you owe banks money.  And you have none. What do you think they'll do ? Shoot you, throw you in jail ? 
They'll do nothing except huff and puff and eventually get a court order to repossess the house. In which case you find a nice little place to rent.
I don't know where you live but almost anywhere would be cheaper than what you are paying in interest.

Other posters will give detailed advice on each step you should take. There's so many other posts on this that they'll be basically repeating them.

Why don't you now write to every lender and tell them that you are flat broke, earning nothing, borrowing from your Mum, depending on your (now pregnant) wife who soon may be earning nothing - _and that there is no chance of you paying them_ ?

Be as hard as possible. Stop worrying - and see what, really, they will do. I'm betting that end of the day it's very little that will make your life worse than at present.


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## Luternau (20 Mar 2013)

> Your only worry should be your wife and child's health. Nothing else



Good advice!

While its easy for us to say this to you that is living with the worry etc, if you have not got any money, the banks cant make you pay what you dont have. 

There are others in much better positions than you are - who are avoiding paying what they borrowed back, so this is where the banks will be focusing their attention first.

Best of luck to you!


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## Trooper (21 Mar 2013)

Thanks for the replies guys, it actually helps getting even the slightest bit of perspective. Im just wondering though, would I be better availing of the personal insolvency or bankruptcy. As I said, I am optimistic I can start earning a half decent wage by the end of the year but my fear is that I will be forced to live on a certain amount set out by my creditors. If a set fee is agreed with creditors, how often is this assessed,if your income increases, any amount above that set fee is paid to the creditors. If that is the case, realistically where is the motivation for a self employed person to earn any more than the set fee for the time period in personal insolvency?
Thanks again


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## Boyd (21 Mar 2013)

I would assume any sort of personal bankruptcy/insolvency would not be the best idea if you are starting a business....


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## Bronte (21 Mar 2013)

Like the other posters mentioned you're in so much debt there is really nothing they can do to you. 

Question for you on the sole income of 65K. I presume this is gross, how much is it net?

Are you paying 2844 + 500 out of this monthly. Meaning 40K annually? If you are paying this what are you living on and in addition how does this allow you to start a business?

You've asked what is the best option for you under the new insolvency regime, might be an idea to look at the key posts on this. But in relation to them allowing you a certain amount to live on, well that will be what it means. Even today they are discussing what this exactly means, but it will be rent/mortgage, food, utilities, 1 car, no sky, no holidays etc. 

How that is an incentive for someone self employed to make more money, well if you can come to a complete written agreement with everybody you owe then it will be you to decide whether you want to make a lot of money or not. To decide if the deal is worth it to you and your family.

BTW - the banker saying the won't agree to the sale sure you might 'win a few quid'. Are you in line for an inheritence?


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## Trooper (21 Mar 2013)

Thanks Bronte, yes the 65k is gross, up to now the nett has been €3,200 p.m (based on €60k) however this month should show the €5k rise plus I transferred my tax credits to my wife so that should increase nett. Out mortgage payment has just come off fixed since February and up until then our repayment (capital and interest) was €3,157, I had been paying interest only (aprox €2,500) since around 2010 but in May last year after entering the MARP process I started paying the 3/4 of interest only, then whatever I could for a couple of months (€700/€800 p/m) until eventually I couldn't pay anything so I havent paid anything in about 6/7 months. I have been paying my Mothers mortgage of €500 p/m and using whatever is left from my wifes wages to start the business, pay household bills, pay back some personal loans etc. I read the article in the Indo today about cost of living and I read on other posts here that acceptable income would be €2,050 for a couple,tbh that seems possible too high. We currently dont have health insurance, or life insurance, house insurance or mortgage protection. I have a borrowed car, and no Sky and no holidays, thats fine but what I want is the opportunity to contribute more to society, build a business and start hiring people again and I think that the 6year personal insolvency (from what I read) will not encourage people to do this EG My wife has a very stressful job however she could go work part time and nett 2,500 per month, I could sit on my This post will be deleted if not edited to remove bad language and I could also do nothing for the next 6 years, its not in our nature and we wont be doing this but do you think it will be possible that an agreement might be reached with my creditors that e.g. pay anything you earn over €2,500 p/m over 6 years and if you pay back e.g. €100,000 before the 6 years you are clear?  
Thanks again


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## Trooper (21 Mar 2013)

username123 said:


> I would assume any sort of personal bankruptcy/insolvency would not be the best idea if you are starting a business....



How come? From what Ive read they can only take what you earn after the agreed living expenses, I assume that once Im out of bankruptcy/insolvency I can then continue to earn full wage? Is there another alternative/ Thanks


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## Bronte (21 Mar 2013)

Trooper said:


> I have a borrowed car, and no Sky and no holidays, thats fine but what I want is the opportunity to contribute more to society, build a business and start hiring people again and I think that the 6year personal insolvency (from what I read) will not encourage people to do this
> 
> 
> but do you think it will be possible that an agreement might be reached with my creditors that e.g. pay anything you earn over €2,500 p/m over 6 years and if you pay back e.g. €100,000 before the 6 years you are clear?
> Thanks again


 
Interesting to hear from someone who is facing it and living it that what is being proposed you can live with. 

In relation to your question. Think about it from the bankers point of view. They need to get back as much as possible from you. For you to do this you want to make more money but keep some 'extra' from that as an incentive. What you are saying is that without an incentive you would feel like not bothering or giving up. So you need to negotiate. And negotiate hard with the bank. You say to them here is what I have but I can earn X and I'm willing to pay you back half of X if you allow me to do Y (pay off the mothers's loan/keep VHI/buy a car). And I'd certainly try and negotiate some kind of end date if possible.

I understand where you are coming from. What I do not know is whether banks will go for certain things. But some people do know. Probably the experts you mentioned earlier that you cannot afford. 

Did you think of contacting that businessman George M mentioned on here. He's set up some kind of counselling group I think that aims to help people like you dealing with the stress of business and other debts and trying to start again in business and also negotiation with banks. Sounds like the kind of advice you need. I assume he's free but I do not know.


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## Trooper (21 Mar 2013)

Thanks Bronte, It should be an interesting few months  Ill keep my progress posted here. I cant seem to find that guy George M you mentioned, could you point me in the right direction. Thanks for the advice


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## demoivre (21 Mar 2013)

I know of a guy called George who can't work out how to have Sky without the bank's knowledge. Google is your friend.


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## Bronte (21 Mar 2013)

demoivre said:


> I know of a guy called George who can't work out how to have Sky without the bank's knowledge. Google is your friend.


 

I see now you mentioned on the other thread Sky too in relation to this guy, I think that was what you were referring to but I didn't understand. I think now you mean that anyone can have Sky as in you can have it free to air, as I do on the Continent. I'm sure Mr. Mordaunt knows that too but I've a feeling Sky is the least of his problems. 

______________________

Trooper we discussed George Mordaunt on this thread. I do not know him but sometimes anything is worth a try.. 

http://www.askaboutmoney.com/showthread.php?t=177674


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## oldnick (21 Mar 2013)

Trooper, just write to the banks about the credit cards/personal loans (ca. 44.000)and tell them what i suggested. You cannot pay and there is nothing you can do.

Once they realise there's no chance of getting paid  they may(will?) lay off. Will take a few months and you'll be approached and checked out.
But the sooner you get the ball rolling by firmly stating  that you just can't pay, the better for you.

I've suggested that you do the same re your mortgage but I admit this is a bigger deal and you may wish to study this further.


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## demoivre (21 Mar 2013)

Bronte said:


> I see now you mentioned on the other thread Sky too in relation to this guy, I think that was what you were referring to but I didn't understand. I think now you mean that anyone can have Sky as in you can have it free to air, as I do on the Continent. I'm sure Mr. Mordaunt knows that too but I've a feeling Sky is the least of his problems.



No what I am getting at is that even someone who isn't genetically gifted with great matter should be easily able to get one up on a box ticker in a bailed out bank, particularly if that person is self employed.


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## ciarank (28 Mar 2013)

Hi Trooper,

I think you are dealing with your distressed situation with a very positive attitude and I believe this will ultimately get you through it!

Consider asking for a split mortgage debt for equity stake. In other words you pay your mortgage based on about €300k. I haven't worked out the repayments on what that would be but if you can afford it then that is one option PTSB might give serious consideration. Just ensure they don't charge interest on the parked sum but my understanding is that PTSB won't.

If this fails and you feel you're going to lose your house at some stage down the road then don't pay them any more money. They would have clearly demonstrated at that stage that they aren't willing to offer a sustainable solution so offer the same back! At least that way you get to build a small fund before you lost your house. Ultimately the debt will eventually be written of in the form of a debt writedown (although this may be many years away) or if you decide to do some sort of a PIA with the bank or indeed bankruptcy.

Consider setting up a company for your business and putting the shares in trust or in your son or daughters name so that your creditors don't force you to wind up your new business. This is perfectly legal if done right and then you will have very little to worry about. You are leaving yourself a little bit vulnerable setting up a business as a sole trader. 

Good luck in your new adventure, I can only wish you the very best. I've no doubt you will see the world in a totally different light when your new baby arrives and banks will be at the bottom of your priority list.....and so it should be!


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## Gerry Canning (28 Mar 2013)

Hi Trooper, What I see on this is EVERYONE is TELLING you to maximize your energy/ work on your wife and upcoming child. I agree 100% with them.
Your Debt case looks today to be unresolvable , so accept that.
I suggest do income/expenditure and send it to the lenders and ask for THEIR suggestions.  Take it from there , think about it ,they are in a BIG hole !!!


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## Gerry Canning (28 Mar 2013)

oldnick said:


> No advice from me ( that others would regard as "correct") except to ask - what ,really, are you worrying about ?
> 
> Your only worry should be your wife and child's health. Nothing else.
> 
> ...


 Dear Old Nick... Don,t be so sure others don,t agree with you. We probably do but phrase our language more {softly} !!


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## CCland (29 Mar 2013)

Hello folks

I have been a regular reader of AAM for some time now and have just registered as I am in severe financial difficulty and will post a money makeover as soon as I get the hang of the techno part.   I have been in serious trouble with for some time now so hope you can help out with advice etc.,


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## CCland (29 Mar 2013)

[Personal and income details
Income self:45,000
Income history: PAYE 
Income partner/spouseAYE €38,000
Income history:Stable 
number of children: 1 dependent
Amount of Mortgage Interest Supplement received: 0
Home loan
Lender: 
Amount outstanding: €220,000 including arrears of €31,000
Value of home: €255,000
Interest rate: specify whether tracker or SVR or fixed rate: tracker 1.9%
Monthly repayment: €1,000
Amount in arrears: €31,000

Investment 1


Other loans and creditors - 
Overdraft: BOI €4,000 
Personal loan: BOI €5,000
Credit Card: 0
Management fees: €4,500



Savings €7,000 in CU as collatteral


How important is retaining the family home to you? 
Very important

Any other relevant information

What is your preferred realistic outcome?

Just want a good nights sleep,  have been worrying myself sick for over a year now,  am in MARP but still unable to meet all commitments.  I don't want to go bankrupt but don;t know if I have any option. I don't care about the investments but would love to keep my home.   Bank has been very good to date but its got to a stage that I cannot afford to put food on the table.   Any advice would be appreciated.   Sorry if I posted this in error, only finding my way around being a user.


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## Joe_90 (29 Mar 2013)

Think you are missing the info about the investment property?


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## RichInSpirit (29 Mar 2013)

Hi Trooper. Like the others say don't worry too much about things. I'm in a slightly similar financial circumstances but not quite as deep.
My new accountant suggested the other day that I should think about personal insolvency to wipe my debts and start again. 
But I'd rather work things through, which I intend to do.
I have to do some firefighting every so often but that goes with the territory. 
You are not alone.


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## CCland (30 Mar 2013)

Thank you Joe90, I did have it in but it got wiped,  as I said I'm only getting used to posting.

Investment 1

Value 135k
O/s    163k
Rate   Tracker 1.5%
Arrears  3k
Rental income   Nil at present
Mortgage  220 Interest only

Investment 2
Value  160k
O/s     330k
Rate    Tracker 1.9%
Arrears 12k
Rental income   1000pm
Mortgage           560 Interest only

Investment 3
Value    60K
O/s     220k 
Rate    Tracker 1.9%
Arrears 40K
Rental income  520pm
Mortgage        380pm Interest only  

As I said in my last post I don't really care about the investment properties.  I would just like to have a life.   Although I do accept I bought these properties and have responsibility for them but at present things are just not adding up.


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## Joe_90 (30 Mar 2013)

What are capital and interest repayments, what are the terms left on each?


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## Joe_90 (30 Mar 2013)

bring a little clarity it might be better to summarise the situation,  



|PPR|Inv1|Inv2|Inv3|Total
O/s bal |220k|163k|330k|220k|933k
Monthly Repay |1,000|220|560|380|2,160

Income |5000|0|1,000|520|6,520


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## CCland (31 Mar 2013)

Joe_90 said:


> bring a little clarity it might be better to summarise the situation,
> 
> 
> 
> ...




Thank you Joe 90, not sure where you got the 5k income on my ppr.  All 3 investments are on interest only with about 18 years left on each.  My PPR had 12 years left but bank increased this to 18 too and reduced the monthly repayment from 1400 to 1000.   Hope this clarifies the matter.  Don't know how much int + cap would be on the investments.   I am hoping the bank will do some deal, maybe selling the inv with €40k arrears  and then I might be able to deal with the other 2.  What do you think?


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## Joe_90 (31 Mar 2013)

It's 83,000 after tax,


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## Trooper (3 Apr 2013)

Sorry, been offline for a while. thanks for all the advice. Ive decided to put the house up for sale again and I have been told by my solicitor that this time they should accept the offer as the Personal Insolvency bill will be in play by the time its sold. So, my ideal situation is sell the house, making mortgage shortfall unsecured along with my other unsecured debts, enter PIA and repay over 6 years. In the meantime I will rent, and in an ideal world I would find a house that would let me rent to buy so that when Im out of the PIA and my credit history is eventually repaired I would have the option of buying said house from owner. (I understand this is a very long shot ) 
@Ciarank, I have considered the transferring shares into my Mothers name but I was afraid this would be deemed fraudulent? Has anyone else any thoughts on this?


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## Negotiator (3 Apr 2013)

There is nothing fraudulent about your mother setting up a company and appointing you as a director of that company to run it. It's just like starting a new business. 

Transferring assets to a third party so that your creditors can't get at them is totally fraudulent!


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## Trooper (4 Apr 2013)

Thanks Negotiator, so I could be a non shareholding director, take minimum drawings, and keep retaining profits until my PIA is up, then have my Mother transfer shares to me? If so, do you know the tax implications on such a transfer from Mother to Son?


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## Negotiator (4 Apr 2013)

I don't know the exact tax implications but there are a number of ways you could acquire the shares.

She could lend you some money to buy the shares at fair market value and you could pay her back over time. Or she could gift you the shares if they're under a certain value. It's important however to get the company valued professionally at the time so no one can dispute it.

Bear in mind of course that it's entirely your mother's decision whether she would like to sell the shares to you or gift them etc.


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## Bronte (4 Apr 2013)

Trooper said:


> In the meantime I will rent, and in an ideal world I would find a house that would let me rent to buy so that when Im out of the PIA and my credit history is eventually repaired I would have the option of buying said house from owner. (I understand this is a very long shot )


 
Well it's good to hear that you have a plan.  In relation to future borrowings and the PIA system.  Maybe your bank will do an arrangement with you that keeps your 'name' out of the PIA system.  After all it's not completely necessary to go through the costs of this process if the bank agrees (in writing) .  In any case even if you go into the PIA and it means your credit rating is shot I believe that eventually banks are going to have to allow lending to people like you despite bad credit ratings as it's the only logical way they will do some future business.  

Hope everything works out for you in your dealings with the bank etc.


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## Bronte (4 Apr 2013)

CCland said:


> As I said in my last post I don't really care about the investment properties. I would just like to have a life. Although I do accept I bought these properties and have responsibility for them but at present things are just not adding up.


 
Welcome to AAM Ccland, it would have been better if you had posted a new thread as it makes it very confusing.  

Some questions

2 of the rentals are earning more rent than mortgage so why are there arrears?

Why is the first investment without rent?

On an income of 83K I also don't understand how you are in arrears on your home, particularly when the mortgages is only 1K monthly.  What are your major monthly outgoings?  

Could you post a new thread and copy and paste the details and clarify a bit further your situation.


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## Trooper (4 Apr 2013)

Thanks Bronte, another reason of going through the PIA is there is my PIP can negotiate other debts, personal loans, credit cards etc. Am I correct in saying that if I, or my solicitor, or MABS negotiate with each creditor, then there is no reason of going into the PIA? What are the advantages of staying out of the PIA system? Is it just avoiding costs? I would assume my credit rating is shot anyway?


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## Bronte (4 Apr 2013)

To be honest Trooper I'm not a bit happy with what is proposed so far with the PIA but won't be fully sure until it's in operation and working for some time whether is is a good thing or not.  I think if you can get agreement now in writing then is saves you costs (apparently 5K) and you start the end game faster.  This PIA so far is very slow in coming.  And the nonsense going on about how much people are going to be allowed have for shoes etc would make you tear your hair out.  Far better to negotiate yourself if you can.  You can surely also negotiate with your creditors that after x amount of years they will take your name off the bad credit rating etc.  I'm assuming that anything can be negotiated, especially if the bank are happy you are playing ball.


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## Trooper (25 Jun 2013)

*Update*

Hi
Just posting a quick update on my situation. I have got a seller for my house and contracts are being sent to the potential buyer. I am now waiting on the consent from the bank to sell. My solicitor has said I have to complete an up to date SFS and a proposal of how I will deal with the shortfall. 
Maybe Im wrong but I thought I saw a sample cover letter/proposal on AAM before? If so, it would be great if someone could show me where I can find it.
I am going to propose a fixed amount towards the debt over a 5 year period however as I can not avail of the DSA yet I am unsure if the bank will agree which will result in not selling the house and putting up the house for sale again at a time when I can avail of the DSA OR should I sell the house anyway, thus un securing the debt and agree to (EG) a fixed amount over the course of the mortgage, then when DSA is in place, apply for that?
Thanks in advance
Trooper


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