# Debt write down - credit rating implications



## DLG (6 Feb 2012)

I am in co ownership with an ex partner of 2 properties approx. 650 - 700k in negative equity, mortgage is with one of the major Irish banks. I have an offer of 650k from a property investor to buy both these properties now in cash i.e. no mortgage will be needed by her. She is ready to talk to the bank and make them the offer of buying these at this price IF they write off the rest of the mortgage, - she is a personal friend of the co owner and wants the debt written down to help them. If the bank agree to do so - the investor is very experienced at this - will my credit rating be affected due to a write off of the remaining sum. I am currently on an interest only arrangement with bank due to not having the means to pay off the capital and interest and cant see a time when i shall be able to do so. So from the banks perspective they may think a bird in the hand (650k cash now) is better than chasing us for capital payments on a 1.3 million mortgage over the next 20 years. Please advise on the credit rating implications for me as I would eventually like to get another mortgage if this arrangement is agreed to by the bank. I have no other debt or bad credit history.


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## FTBtracker (20 Mar 2012)

This is an interesting post. Im surprised no one responded. How did this go in the end? Are banks agreeing to such deals now and not chasing original mortgage holders for the shortfall? Any posts with real on the ground colour would be useful. Thanks


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## munchy (20 Mar 2012)

I would be very interested in this answer as I am paying back the back what I feel I can afford which is about 70% of the expected monthly repayment.... if they dont come after me to take me to court (not worth their while as I have no other assets in Ireland) and I carry on trickling payment across regularly ..... can they make a judgement and will my credit rating also be affected.
Basically I am in partial default but not full default in this regard


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## DLG (3 Apr 2012)

Hi the investor hasn't been to the bank yet but she will approach them shortly so will see what happens over the next few months, I would say that the bank would register it as a write down with the Irish Credit Bureau therefore it would affect my credit rating for 6 years, however if this investor can negotiate it as part of the terms and conditions that they dont register it as a write down i could be ok, the banks want cash and if they are offered it with some Ts & Cs they may just agree. Will keep you updated over the course of it.


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## DLG (3 Apr 2012)

Hi Munchy, as far as I am aware all you need to pay is 70% of your interest only payments (no capital) and the bank cannot pursue you, check this out with MABS. If you wanted to stay in the house forever maybe you need to clear your loan down but if you can't see a future in it and are just trying to keep your head above  water all you need to give the bank is 70% of interest, as I said check that out.


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## 44brendan (3 Apr 2012)

You may be lucky here and the written off amount may not be registered with the ICB. I have'nt accessed ICB reports recently, but it was not a standard process that all default bank debt was registered on ICB. Hopefully someone with more recent experience on ICB registrations can give you better feedback on current levels of update.


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## DLG (3 Apr 2012)

Thank you Brendan, that gives me hope as I would very much like to start over again. Hopefully some people can come forward with some feedback of their experiences.


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