# Impact of more liberal UK Bankrupcy laws on SME's and small creditors.



## Artemis

Nobody wanta to see any SME shafted by people not paying their bills, and this is not why many of us consider bankruptcy. In facr it is the SME sector that is most exposed by the property crash. Most of us used property as a vehicle for a future pension.

The problem is the unwillinginess of banks and government to accept everybody is going to lose money due to the collapse of property prices, but only by a shared responsibility can we minimise the loss. The individual has already lost all of their money in failed property investments. The issue now is how much of the bank's money going to be lost.

On a personal level, the bank loaned me over 1 million when I was on a salary of 30K. In hindsight, I admit I borrowed recklessly but the bank and the regulator accept no responsibility for the current mess.

When I am ready to go bankrupt in the UK, I will contact the bank and offer to pay 100K over 5 years as a settlement to closure on the matter but I expect the bank will refuse this and force me to choose the UK bankruptch option.

Property assets have crashed by 50% to 80%, yet there has been no meaningful solutions proposed by banks and government. We are still in a state of denial and UK Bankruptcy is the only option at the moment. 

The current mortgage crisis has caused more damage to famlies of this generation than  clerical abuse has done to the last generation. Just like we now ask how  could government and society turn a blind eye and let this happen, the  next generation will ask why did the people behave like sheep? We seem to only  know the difference between right and wrong with the benfit of  hindsight, long after the damage has been done.


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## seantheman

Artemis said:


> The current mortgage crisis has caused more damage to famlies of this generation than clerical abuse has done to the last generation.


 
Somehow i feel i'd rather be shafted by a bank and that's not being glib about the situation


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## Artemis

seantheman said:


> Somehow i feel i'd rather be shafted by a bank and that's not being glib about the situation



Not glib, simply realitic. Have considered other options sonce 2009. Bankruptcy is a last resort. 

However, if you have an alternative solution, tens of thousands of us would love to hear it.


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## mercman

Artemis said:


> we now ask how  could government and society turn a blind eye and let this happen, the  next generation will ask why did the people behave like sheep? We seem to only  know the difference between right and wrong with the benfit of  hindsight, long after the damage has been done.




A well written and accurate post.


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## Bronte

Artemis said:


> On a personal level, the bank loaned me over 1 million when I was on a salary of 30K.


 
Yikes, can you tell us how that came about?  On another thread perhaps.


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## Bronte

seantheman said:


> Is the seemingly bankrupcy on demand Uk System the type of setup we would like to aspire to?


 
My view is that what we have now is not working.  So without the government bringing in a proper modern bankruptcy system people have to go the UK route.  We need those that were productive to become productive again.  We do not need people to spend the next 30 or 40 years under stress, committing suicide and bringing this country deeper into depression from recession.  It benefits no one.


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## mercman

Bronte said:


> On another thread perhaps.



What a superb idea ! A thread of listings of Banking mistakes of lending offering or trying to lend money to persons. Personally I could fill a book having been in the scope of personal Banking mistakes, errors and fraud.


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## ClubMan

Artemis said:


> On a personal level, the bank loaned me over 1 million when I was on a salary of 30K. In hindsight, I admit I borrowed recklessly but the bank and the regulator accept no responsibility for the current mess.


Unless there were significant other assets not mentioned here backing the loan(s) then hindsight is not necessary to recognise this as reckless borrowing (and lending).


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## mercman

ClubMan said:


> Unless there were significant other assets not mentioned here backing the loan(s) then hindsight is not necessary to recognise this as reckless borrowing (and lending).



??? In very many cases it wasn't reckless borrowing it was reckless lending. Only recently I saw an instance where a person was loaned millions to invest in a Financial Product with the Product only taken as security, and when the person went to encash recently, the Bank refused to allow him as there is a shortfall in the value of the product versus the outstanding loan balance.


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## ClubMan

mercman said:


> ???


I don't understand the "???" ... How can anybody think that borrowing €1M on an income of €30K is NOT reckless borrowing? Not saying that the lender is not at fault here as well but it takes two to tango.


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## mercman

Maybe -- but that was the order of the day. Banks were literally throwing money at people like confetti. Some took it without offering security and others didn't. Whilst it may take two to Tango, in the main the Banks caused the problem and wish to instill immense pain to a nation of people who in reality knew no better other than to accept the misgivings of others.


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## mf1

"where a person was loaned millions "

This sounds as if the person involved made no decision - i.e. did not borrow of their own free will but "was loaned". Was the person compelled/forced/obliged to borrow or is it their view that, as a borrower, they have no responsibility to make  a decision on whether or not to borrow? 

And when you are talking "millions" as above, I think we are a long way away from the innocent consumer/naive youth or MVS ( I like this - it's Purples- the Most Vulnerable in Society!) - its actually a big commercial decision, made presumably by someone who knew what they were doing. 


mf


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## mf1

"Banks were literally throwing money at people like confetti!"

No. Just don't get that one. No-one makes you borrow. 

"in the main the Banks caused the problem and wish to instill immense pain to a nation of people who in reality knew no better other than to accept the misgivings of others. "

Really? We knew no better than to accept the misgivings of others? No, don't get that one, either. 

No-one makes you borrow. 

mf


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## ajapale

This thread has been split from  's query.

aj
mod


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## Artemis

mf1, as a previous poster said it is about making people who were once productive, productive again. Sitting on your hands and saying tough luck to the ordinary joe, but bailing out banks and developers is why we are in the mess and the problem is getting worse. 50% of society now worries about how to pay bills and 20% of people fear losing their home. We need to bring solutions with problems to the table.

If we force the "once productive people" to move to the UK or suffer on here, we will be left with the civil service  and Social Welface recipients, with nobody to pay for it. If that is allowed to happen the current mess will be just the warm up.

If we follow you logic why dont we scrap social welfare and support for the sick, drug addicts, ect. After all they should/could have done thinks different and therefore have only themselves to blame.

This is a societal issue, it is now about the common good. And those of you who are smug about you being ok, are fooling yourself. If you are in the public sector you need SME's/enterprise to pay your wages. If you work for a private company, the entrepneur running that needs to get rid of his/her property headaches to reinvest, grow the business, keep you employed or give you a pay increase.

The proof is in the pudding. Smugness and saying your problem, not mine is a false economy. It is clearly not working.

How many of you who are smug, took to the streets about the billions poured into Anglo? NAMA, Foreign Unsecured Bond Holders? A fraction of this money would solve the issue for all the rest of society.

Irish solutions to Irish problems. Sure it'll be grand and it's not my problem, I'm grand. I never took a risk in my life but I expect an eduction, health system, job,social welfare if I lose my job, road network ect. However it is enterprise, risk takers who pay for it all.

You will want to solve the issue when your perfect world is affected, but at that stage, it will be too late. However, no doubt you will then complain about what should/could have been done to help job creators who were drowning with property loans.

We all nead to wake up, share the pain, tell banks, government, unsecured bondholders to get real, and take the pain now and move on.

It does not require a greater hit for the tax payer. It simply requires us to use the money differently. 

The VAT, PAYE, PRSI, Capital Gains taxes collected in the boom could solve the problem, but unfortunately its spent, so instead we use the national pension reserve to pay foreign unsecured bond holders. 

History will laugh at our stupidity.


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## Bronte

Artemia, MF1 was not being smug, don't get your point?  His point I think was that people who borrowed recklessly should acknowledge that. 

It would be interesting to hear your story though.  I'd love to know how you got 1 million on a salary of 30K.


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## ajapale

Can we just avoid the _*"smug"*_ word please? Its unneccessary and only makes the discussion personalised and off topic.

aj
modertor


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## Artemis

Use of word Smug was nor directed at any poster specifically. Simply pointing out that those who think we can ignore the mortgage crisis without consequences for society are not being realistic.

Yes I and others borrowed recklessly, but for that to happen, banks had to lend recklessly. Borrowers acknowledge this but banks, government, courts, ECB to not acknowledge this reality.

In terms of how I borrowed 1.1 million, I did not submit false documents. I submitted an application and it was treated as "commercial" so the bank could ignore guidelines and issue the loan. They have since doubled their margin on the Euroibar rate which is a large part of my problem.


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## oldnick

Bronte - regarding how one got loans from banks so easily ..

I wanted a loan of 250k six years ago to convert an old building into apts.  Bank mngr said that  may not be enough to do a good job, why not borrow 300 ? ER, that's kind, thank you I said.
Look, to be sure  ,to be sure , nick, make it 400k- you know what builders's quotes are like....
 I was amazed and said -But I may have trouble re-paying that.
No worries, we'll make it interest only for three years, and when the building's complete you can start paying it off. And it'll all be on tracker...

The problem is, I said, I've got my eyes on an overseas investment and..
The bank mngr cut me short. "get to the point,Nick how much do you need?"

To cut a long story short the bank that day lent me 400k euros,plus 400k dollars.
My income was earnings from an increasingly profitless small travel agency and my only security was my home plus the old building I was converting.

that's about 700.000 euros thrown at me.in a 30 minutes chat. Of course I took it. And I was silly. Not so much for taking the money but for investing it in property that has crashed here and in florida.
I'm repaying the loan as it as my fault for taking it. And for being greedy and over ambitious. And  because I have never ever not paid every cent of anything I've owed.

But I'm not quite sure how the bosses of these banks were so well rewarded (and still are on their amazing pay-offs and pensions)  for, basically, using German/French banks' money and throwing at idiots like me.
And ,of course, I'm annoyed at not only repaying my own loans but  ,like all of us, paying off the unpaid loans of bigger borrowers than me.


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## seantheman

Artemis said:


> Not glib, simply realitic. Have considered other options sonce 2009. Bankruptcy is a last resort.
> 
> However, if you have an alternative solution, tens of thousands of us would love to hear it.


 
Dont think you quite got my drift here. I meant I wasn't being glib(not you).
You seem to insinuate in opening post that the rape of children was a lesser evil than a bank manager lending €1m to someone on a €30k salary


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## Jim2007

Artemis said:


> Yes I and others borrowed recklessly, but for that to happen, banks had to lend recklessly. Borrowers acknowledge this but banks, government, courts, ECB to not acknowledge this reality.



Lets say there was a reset option, you hand back all the property etc that you acquired and you can walk a way debt free.  Would you accept such on offer, a simple yes or no?


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## Artemis

seantheman said:


> Dont think you quite got my drift here. I meant I wasn't being glib(not you).
> You seem to insinuate in opening post that the rape of children was a lesser evil than a bank manager lending €1m to someone on a €30k salary



Certainly not, any crime against chidren is the lowest of the low. and bankers are not rapists. By and large they are good people doing a tough job in difficult circumstances.

The point that I make is that the mortgage crisis is not simply a monetary or economic issue. It has wider implications for society and famlies that will be felt for years to come and is not being addressed. It also has a huge impact on mental health and any chance of returning to economic growth. It is harder now to get a business loan/mortgage today than it was in 2009. 

We have money to save unsecured foreign banks but helping our own people is too expensive and socially unacceptable.

Have we considered the cost of not solving the matter?

I believe the next generation will believe we wasted the moeny we had on a solution that did not address the problem.


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## Artemis

Jim2007 said:


> Lets say there was a reset option, you hand back all the property etc that you acquired and you can walk a way debt free.  Would you accept such on offer, a simple yes or no?



Yes sir, gladly.


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## oldnick

Rarely have I agreed with someone as much as I have with Artemis.
Artemis -you may not think it but you are still young still and I would absolutely push you to tell the banks that you just cannot pay. You've evidently tried your best ,you're not well, you have children to look after.
And ,even though you're not even seeking this, if the banks don't let you off, then leave. Leave and start afresh.


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## Jim2007

Artemis said:


> It is harder now to get a business loan/mortgage today than it was in 2009.



Banks have finally started to apply the same lending principles as the rest of the EZ - meaning the loans are based on capacity to repay not just asset value.  So typical mortgages of say 2 or 3 times the salary of the main income earner will be entertained by the banks, but beyond that will be hard to come by.  Similarly, since about 9 out of 10 SMEs fail on average, you can expect that companies will be carefully scrutinized before they are considered for any loans.

Furthermore, as we move closer to an economic union with the other EZ countries you can expect that to remain the case.  Given the fact that most EZ countries do not particularly support the concept of home ownership, I would expect that that will have consequences for Ireland as well going forward.


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## Nermal

Artemis said:


> Property assets have crashed by 50% to 80%, yet there has been no meaningful solutions proposed by banks and government.



Bankruptcy IS the solution. Why is any other solution necessary?

As to opting for the more liberal UK regime - that's your right as a citizen of the EU. It doesn't mean that Ireland is obliged to bring in a similar one, or that it would be in our interest to do so.


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## Artemis

Nermal said:


> Bankruptcy IS the solution. Why is any other solution necessary?
> 
> As to opting for the more liberal UK regime - that's your right as a citizen of the EU. It doesn't mean that Ireland is obliged to bring in a similar one, or that it would be in our interest to do so.



Sure, Lets continue as we are. It's working so well, why would we change things? There is certainity and stability in the economy and that can only be a good thing.

We have a clear strategic plan on how to continue on the road to prosperity. We just need to continue to execute and implement the master plan currently in place. The last thing we want to do is change direction mid-course. Look at the progress we have made since 2008. We might undo some of this good work, such as the cheapest bail out ever at no cost to the tax payer, NAMA has succedded in bringing stability to the banks and our national pension reserve is perfectly positioned for the next gereration of homeless pensioners. 

We have never had it so good.


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## seantheman

Might be better to move to LOS because there's a lot of nonsense being posted on this subject just now


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## Bronte

Nermal said:


> Bankruptcy IS the solution. Why is any other solution necessary?
> 
> As to opting for the more liberal UK regime - that's your right as a citizen of the EU. It doesn't mean that Ireland is obliged to bring in a similar one, or that it would be in our interest to do so.


 
The problem is that bankrupty in Ireland is currently not an option for most people, so they cannot get on with their lives, they cannot put an end to the debt and they cannot become productive members of society again, never mind all the psycological harm it is doing to people.


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## Time

It's like the stupid Irish divorce laws, people had to move on so they went to the UK, Europe etc to get closure.


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## Steve Thatcher

After three years of economic meltdown it may not be productive to keep chewing over who is to blame. The truth is everybody shares the responsibility.
Im my opinion people need to decide how they are going to move on. Your Government seems to be stuck between a rock and a hard place. It is asking you as a nation to give up more in austerity so it can pay back to international investors the money it guaranteed they would get as aresult of the failure of your banks. So it does seem that you are getting no where.
If the state is not helping you collectively you need individually to help yourselves. 
If you cannot carry your debt for the rest of your life don't do it go bankrupt.
If you have a moral code that says I borrowed it and so will repay as much as I can then good.
But each must make up their own mind, there is no right or wrong.
Ireland needs its entrepreuners to start creating wealth again. These are also the people with huge debt around their necks.
I am now seeing these people trun up in England, go bankrupt and start the process of being able to begin again.
John Fleming is now discharged from bankrupty and he owed £1b. he is back creating wealth. I can name a string of others who will do so.
These people will come back to your country debt free and hungry to start the economy thriving again


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## Bronte

That's very well said Steve.  It is time the Irish people moved on and realised the government is not going to help them and people need to start helping themselves.  And people should realise they can help themselves.  

Have you seen an increase monthly in Irish people going bankrupt over there?  Or is it a steady trickely, are there any statistics on the numbers?


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## Wishes

Well said.  

I have finally started dealing with a bankruptsy practice in the UK.  It has taken me over a year to realise that the Government will do nothing.  

Hand back the keys and move to the UK.  It's a sinking ship here.  The sheeple or Government will do nothing, only analise it on the the Joe Duffy show.  The day of talking is over; people need to start moving on and end this charade once and for all by filing to go bankrupt.

Bronte, Steve can confirm better than ,I but from what I hear through the company I am dealing with, is it has steadied somewhat but 2009 saw a massive increase.


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## Bronte

Wishes said:


> I have finally started dealing with a bankruptsy practice in the UK. .


 
Wishes can you tell us your experience of dealing with a UK bankruptcy practice and I presume there are costs, can you outline those.  Also how did you pick the particular company and are you happy with them.


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## Wishes

Hi Bronte 

The bankruptcy company I am dealing with are also debt management practitioners.  They came highly recommended by a guy I work with.

As costs go we are talking anywhere from a few hundred pounds to a few thousand depending on the enormity of the debt involved. 

  When you get over making that initial telephone call it feels like a weight has been lifted off your shoulders.  I am a grown man but I sat for hours and cried my eyes out, I am embarrassed to say!

I have been working two low skilled, low paying jobs, to pay 66% off the interest on my mortgage.  The bank was not happy so I took the liberty of contacting the UK.  I doubt they will be happy when they see I am calling it a day and filing for bankruptcy!

I couldn’t continue the way I was going.  I was getting four hours sleep per night.  My health was beginning to suffer and I felt I Was being treated like a criminal by my mortgage provider.  It was a no win situation.

I have learned a lot from taking these first steps.  It’s been an education to say the least.  Firstly the powers that be done everything they could, by putting rule after rule in place to prevent these UK debt management companies getting a piece of the action over here.  Insolvency and debt management have been going on in the UK since time began so there was nothing these guys couldn’t overcome.

Secondly very little repossessions have occurred in this country anyway, so they expect a surge within the coming months if the banks stop playing ball.

Lastly, the Irish institutions have been lenient on borrowers compared to that of the foreign based lenders in the country, who have every intention of going to court.


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## 44brendan

As a "Banker" I can empathise with many of the comments made above and the prediciment of the OP. I agree that there is a shared responsibility for the high level of borrowings advanced to people with little thought of ability to repay. I would also agree that poor Banking Practises were complicit in the unsustainable debt burdens taken on by both individuals and companies. However, this issue is now a moot point as the resultant problems are currently evident and need to be dealt with.
At present, Irish Banks are not dealing properly with the problems of their overborrowed clients. there are a number of reasons for this; 
1. Absence of a properly functioning property market. I.e. difficulties in selling assets at all or at a level that will not result in singnificant negative equity/residual debt. 
2. Awaiting movement from the Gov'mt on revised insolvency legislation. Nobody at a top level appears to be driving this forward. It appears to be the poisoned chalice that no Minister wants.
3. Inability to make decisions to w/o portion of unrecoverable debt. Since the Bail-out the Irish Banks have procrastinated on decisions that would involve further loan losses, however logical & inevitable those decisions appear to be.
4. Lending impasse within the Banks. For various reasons Banks are currently/unwilling/unable to lend money. This restricts the circulation of funds in the economy and stifles recovery. Given the current funding and structure of the Banks, there is no obvious short term solution to this issue.
I agree with the basic tenets and arguements made by the OP. We need our entrepeneurs to rid themselves of this debt burden & to contribute positively to the economy. There must be an exit strategy for those people who are overburdened by debt and it must be both fair and equitable. Despite the aversion to writing off debts and belief that those who borrowed must be seen to pay for their mistakes, surely the overriding need of this economy is to start the climb out of this pit and for all to contribute towards a future where we can both learn from past mistakes and improve our living standards and those of our children. In order to do this we need to focus on positive action, however unpopular that may be?


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## Jim2007

Bronte said:


> become productive members of society again



What exactly do you mean by that???


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## Bronte

Jim2007 said:


> What exactly do you mean by that???


 
  I mean get back to work, maybe create jobs, lift the cloud from their shoulders, stop the suicides and uplift the Irish mood in general.  There are many bright young Irish people who gained a lot of experience during the boom and yes during the bust too and if they were left have a second chance it might bring an upswing in Irish society.


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## Bronte

Wishes said:


> When you get over making that initial telephone call it feels like a weight has been lifted off your shoulders. I am a grown man but I sat for hours and cried my eyes out, I am embarrassed to say!
> 
> .


 
That's a very honest post Wishes, I'm so glad you are feeling better.  You never know, you having the gumption to write that might inspire others.  

I'm a bit wary of debt consolidation agencies, be very careful.  How do they charge, by a percentage of the debt?  Could you give more details of your experience, you don't need to name the UK company.


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## demoivre

Article in  on new debt settlement scheme.


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## Wishes

This company was recommended to me by a work colleague who uses their  services to rescheduel debts.  Apparantly, when most people were getting  telephone calls, letters and knocks on their hall door this person had  the banks complying with these guys.  

I am unsure what they did to prevent him getting harrassed but  apparantly he pays his debtors a percentage and the banks seem happy to  take it.  I am unsure of the fees he pays them, but it must be very  little, as his wage would not be substantial.   

I did some research myself before I gave them a call, but all seemed  well above board.  They have been in operation for decades in the UK.

So far they have been a dream to deal with.  It's like a weight has been lifted from my shoulders.      

It's still early days so only time will tell how it all goes from here.


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## Steve Thatcher

demoivre said:


> Article in  on new debt settlement scheme.


 

Who thought up that pile of Sh1te. It solves nothing. I give you my house, and then pay off the arrears, whilst trying to keep a roof over my head by renting elsewhere. How does that get anyone out of the mire.

This situation is getting crazier and crazier.

I can also see it fro  the other side as well.

If I was some one who didn't take on an investment say, and simply has  a home and pays their taxes (every increasing each month) how must they view the continual bail out and refinancing of the banks which may also provide debt relief to those who did invest and lost the money.

How long will those who have no debt countenance a bail out for those in trouble.

Those in trouble need a bail out or no one can move on.

The banks can't afford de bt forgiveness as this would make them bankrupt again and need more money.

More money won't be loaned unless it can be guaranteed to be paid back. 

It can't be guaranteed to be paid back unless you get taxed more.....

and so it goes on.

Honestly I don't know how you get out of this..

Steve


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## Time

It is the banks having their cake and eating it. This will not help many.


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## Bronte

Time said:


> It is the banks having their cake and eating it. This will not help many.


 
On one of the radio shows yesterday they mentioned that the reason the government has not brought in a proper bankrupcty system is that the banks have the ear of the government and they, the banks don't want it reformed, so they must be very scared of what is on their books.  So it is the banks that are stopping the new legislation.  And as the new governement has no new ideas and are only continuing what went on before why would anyone be surprised that we are not a democracy but that the country is run by vested interests.  Banks, regulators and governement all well paid, no cuts, fat cat pensions and 'pretend' salary caps.


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## Kerrigan

Only in Ireland, eh.  

Who pays for the private rented accomodation? 

The bondholders must be on their knees laughing.


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## Steve Thatcher

Bronte said:


> On one of the radio shows yesterday they mentioned that the reason the government has not brought in a proper bankrupcty system is that the banks have the ear of the government and they, the banks don't want it reformed, so they must be very scared of what is on their books. So it is the banks that are stopping the new legislation. And as the new governement has no new ideas and are only continuing what went on before why would anyone be surprised that we are not a democracy but that the country is run by vested interests. Banks, regulators and governement all well paid, no cuts, fat cat pensions and 'pretend' salary caps.


 
I suspect that this is the key. Your banks have had a bail out for what is known, the elephant in the room is the billions in property debt that can't be serviced and can't be sold and is yet to be written down.

Just look at the write downs that Nama is doing and that will be the start of what the banks are looking at and they will be starting from a much higher base.

Steve


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## Time

It will be game over for the banks.


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## Kerrigan

Well said Bronte.

It's been game over for the banks for some time now.  They've been spinning a yarn that will surely unravel within the next twelve months.  I shudder to think what the outcome will be.  

As discussing property prices is banned on this forum I will direct people to a repeat of today's J.D Show.  If you put 2 + 2 together you can guess the outcome.


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## ajapale

Topic reminder:

 Impact of more liberal UK Bankrupcy laws on SME's and small creditors.


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## demoivre

demoivre said:


> Article in  on new debt settlement scheme.





Steve Thatcher said:


> Who thought up that pile of Sh1te. It solves nothing. I give you my  house, and then pay off the arrears, whilst trying to keep a roof over  my head by renting elsewhere. How does that get anyone out of the mire.
> Steve



Well it depends on the numbers but I can see how it could work and make life better for someone eg Mary owes 400k including arrears - original mortgage 430 k taken out 5 years ago. Repayments are 2.5k per month which she can't afford - she can only afford 1300 per month. House worth 280k which bank gets after selling. Mary now owes 120k. She needs a roof over her head so she pays 650 per month for rented accommodation and 650 per month back to the bank for five to seven years after which her outstanding debt is written off.  At present Mary is liable for the full 120k - according to the linked article she would only pay back 55k approx. under the new scheme, and then be debt free.


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## Time

A UK bankruptcy would be far more advantageous in that example.


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## demoivre

Time said:


> A UK bankruptcy would be far more advantageous in that example.



Financially it would but whether or not people en masse are prepared to go down that route and establish a COMI in the UK remains to be seen.


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## Gervan

Surely the impact of numerous small businesses going bankrupt easily will be that the creditors, other small businesses, now will have to fold? 
There are old-fashioned business owners trying to keep the trade afloat and pay off their debts at personal cost, but if they are not paid, by the person going bankrupt, that wipes out those trying to survive and keep their employees afloat.
I don';t know what the answer is, but easier bankruptcy will just open the floodgates.


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