# Insolvency forum in decline?



## Steve Thatcher (18 Aug 2014)

I've noticed a huge down turn in viewings and advice sought and given in this forum.
I just wondered if that was as a result of the IT problem a few weeks ago, or that people now don't need an insolvency solution wether it be Eng or Ire, and if not how solutions are being structured.

Steve


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## Kine (19 Aug 2014)

I would say it is somewhat to do with Banks restructuring more (whether its a good or bad deal) and a little info / insolvency fatigue as well. Many people have spent years living with it and may just think they've had enough!

I know personally I am glad to be trying to think about other things - got a boneheaded agreement from the bank ("amend and pretend") where tehy are essentially making a play property prices will increase over the next few years to reduce NE. I did ask could we assume 20% growth per annum so I could get an equity release now....they didn't see the funny side!

But it was better than going bust.


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## Delboy (19 Aug 2014)

House price rises contributing also


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## Gerry Canning (19 Aug 2014)

Steve; 

Banks here are doing a lot of re-jigging accounts. I deliberately do not use the word re-structuring. I think Kines and Delboys answer a lot!

I hope it is not Mr Bank , having waited 5 years and done little , now hopes prices and economy will lift some negative equity!


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## suarez (19 Aug 2014)

Many of my friends - whom, like us, bought at the wrong time - have received restructured arrangements from the banks that are not feasible long term - especially in lieu of the fact that all TRS will be abolished in 2017, adding up to 300 euro per month to their mortgage.  They mistakenly believe that the banks will write off their negative equity at some stage and therefore believe it financially prudent to wait and see - even though they've been technically insolvent for years at this stage. They also seem to believe that the regional property bubble in Dublin will spread to other parts of the country and therefore lift them out of negative equity - even though there is absolutely no reason to believe this.  I've tried to talk sense to them - but they won't listen. It seems like 'magical thinking' has entered the realm of economics once again.


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## Matthew Moore (19 Aug 2014)

I think it may be the calm before the storm. 
There is still very little consequences for not paying your debts in Ireland, houses not being repossessed in any great numbers, seizure orders rarely enforced by the sheriff etc..
People are still carrying huge debt around with them but their assets are slowly increasing in value and maybe they are spending a bit more than they have before.
What will happen when interest rates rise and NE has declined but people still have this debt from pre 2008ish??
I think the coming years will see a more aggressive approach by banks in recouping what they are owed and this in turn will push people into the protection of formal insolvency arrangements.


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## LondonBoy (20 Aug 2014)

Steve

Was present at a meeting last week in Dublin with New Beginnings, at present they are preparing 10+ applications for Irish Bankruptcy per week or for October sitting of Courts.
The feeling around town is that while the new insolvency laws may be unproven the social and financial upheaval for lads to relocate to UK for 6 months + 12 months bankruptcy isn't as attractive as before.
Leave aside any attachment order the Irish system is therefore only 18 months behind UK.
These means the wife + kids not moving and you can still earn a small wage.
Family is huge in Ireland and there support is key in any decision on relocation.
The family home with its Family Home Protection Act in Ireland may stand a better chance of survival with the Official Assignee (OR in UK) in Ireland according to New Beginnings.
I think only time will tell.
The UK was and is only for the guys who can afford it financially and there are less and less of these guys still standing


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## suarez (20 Aug 2014)

From personal experience, the 18 month duration involved in UK bankruptcy is purgatorial enough.  I couldn't even imagine the mental health effects of having to wait a minimum of an additional 18 months - always waiting for the possibility of having an IPO slapped on you - potentially prolonging the period for another 5 years.  If one has a good family with access to cash - the IVA system, and in particular the full and final lump sum IVA, in the UK is the preferred option - no discharge period. (We did not have access to family money so we went with UK Bankruptcy). The strain of the penal Irish system and the timelines involved with it - can do a lot of damage to families that have already been living on the edge for several years.  It's surprisingly affordable to move to the UK - especially when working to defray relocation expenses.  The idea that the UK option is just for the wealthy is untrue. We were (are) as far from wealthy as one could imagine - yet we achieved it!! One must remember that New Beginnings are a commercial concern and are not motivated by altruism.  By the way - how is one supposed to get paid in Ireland, when it's (virtually) impossible for an undischarged bankrupt to open a bank account?   

I believe PAT2 is on the ball re. the calm before the storm.


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## no_moolah (20 Aug 2014)

suarez said:


> from personal experience, the 18 month duration involved in uk bankruptcy is purgatorial enough. I couldn't even imagine the mental health effects of having to wait a minimum of an additional 18 months - always waiting for the possibility of having an ipo slapped on you - potentially prolonging the period for another 5 years. If one has a good family with access to cash - the iva system, and in particular the full and final lump sum iva, in the uk is the preferred option - no discharge period. (we did not have access to family money so we went with uk bankruptcy). The strain of the penal irish system and the timelines involved with it - can do a lot of damage to families that have already been living on the edge for several years. It's surprisingly affordable to move to the uk - especially when working to defray relocation expenses. The idea that the uk option is just for the wealthy is untrue. We were (are) as far from wealthy as one could imagine - yet we achieved it!! One must remember that new beginnings are a commercial concern and are not motivated by altruism. By the way - how is one supposed to get paid in ireland, when it's (virtually) impossible for an undischarged bankrupt to open a bank account?
> 
> I believe pat2 is on the ball re. The calm before the storm.


 
+1


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## Gerry Canning (20 Aug 2014)

I wonder will pat2 be proven right?

We have muddled along for 6 years , and some mortgages have been sorted , some are at best long-fingered.
I can,t see a huge upturn in Repos for several reasons.
1. We won,t allow it , history etc.
2. There are minimal other options for families.
3. Our Courts seem very slow to throw people out.
4. Mortgage documentation is 20% of time unenforceable.
5. We have muddled along for 6 years , so why not continue.
6. I sense no Bank appetite to repo.
7. If Banks see House prices rise and then go for Repo , there will be societal war.
8. Homeowners seem to have dug in?
8. We might strike oil!!!!!


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## dub_nerd (21 Aug 2014)

Judging by the reports of the banks in front of the PAC earlier in the year, there are more voluntary surrenders than repos. The net effect is the same. And the numbers of them will certain increase a lot. If the banks are willing to write off residuals, I'd say a lot of people would prefer to be rid of the millstone round their neck, rather than paying through the nose until retirement and still not owning the asset. I don't think societal resistance really comes into it.


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## suarez (21 Aug 2014)

The idea of the bank writing off the residual (shortfall) - in exchange for voluntarily surrendering or selling the house on the bank's behalf, is wishful thinking. It certainly didn't happen in our case.


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## dub_nerd (21 Aug 2014)

I mean in cases where there's no ability to pay. Certainly all the banks claimed in front of the PAC that they were doing write-offs in those cases. I presume if they think there is ability to pay, they will pursue that.


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## suarez (21 Aug 2014)

Generally, the bank will only suggest / accept a voluntary surrender or issue an agreement to sell recommendation, after its underwriters arrive at the conclusion that the owner of the property does not have the ability to pay in the first place.  The rationale offered to us by our bank when they suggested we sell our home on its behalf, was that we were unable to service our mortgage - as we were both long term unemployed.  The bank still attempted to pursue us for the shortfall after the house was sold - which resulted in us petitioning for bankruptcy.


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## no_moolah (22 Aug 2014)

I wonder if many banks are actually pursuing mortgage holders for the shortfall once a property is sold ?


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## Gerry Canning (22 Aug 2014)

Suarez; #

Given you are long term unemployed , I see no profit in pursuing you.
I would be inclined to leave the Bank at it , if they want.? 

Am I missing something on the above advice? 
.........
no moolah; 
Am Seeing Banks pursue people up to heavy legal threats , but seeing little real action because,
I think Mr Bank squeezes as hard as they can , until they believe and accept Customer has no more funds ; then case effectively dies.

Am I wrong?


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## mark71 (22 Aug 2014)

In my case I voluntary surrendered our buy to let in May 2013 with no payment made on the property since July 2012. I pass the house every day and I'd reckon their has been no effort to sell it.

We haven't heard a word from the bank since handing over the keys.


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## suarez (22 Aug 2014)

Gerry

We are currently undischarged bankrupts and are very content with our decision. We sold our house after being issued with an Agreement to Sell recommendation. After the house was sold, the bank wrote to us with a repayment schedule for the entire shortfall - which included massive amounts of additional interest ( the interest payments amounted to almost 40 percent of the shortfall figure). At the time we decided that we did not want to wait and see whether the bank would actually pursue us for the shortfall and petitioned for bankruptcy in the UK (We had already being there for 6 months in preparation). We had already endured years of uncertainty and felt that we couldn't afford to take a chance on second guessing the bank's intentions.  I suppose it all depends on a person's circumstances and his / her tolerance for ambiguity and future uncertainty. Some people may be able to handle not knowing for years on end. It may suit other people's circumstances to wait and see. My wife and I  were emotionally and psychologically drained from years of drift, inertia and the feeling that we were passive characters in our own biographies. We wanted the certainty and preferential time line that UK Bankruptcy could give us. From time to time, we have asked ourselves if we made the correct decision. The answer is always Yes - which is very atypical for us.


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## no_moolah (22 Aug 2014)

Gerry Canning said:


> Suarez; #
> 
> Given you are long term unemployed , I see no profit in pursuing you.
> I would be inclined to leave the Bank at it , if they want.?
> ...


 
Makes sense. I'm also an undischarged bankrupt so I don't have to worry about the shortfall from my previous property however I do have a co-owner who wouldn't pay the mortgage for years and I wonder if the bank will bother going after him.


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## Steve Thatcher (22 Aug 2014)

Gerry Canning said:


> Suarez; #
> 
> Given you are long term unemployed , I see no profit in pursuing you.
> I would be inclined to leave the Bank at it , if they want.?
> ...



Perhaps the point most are missing is not what the banks decide to do now, it the the fact that they have 12 years to do something. They can also sell on their loan books and leave a foreign debt purchase business to the own and recover the debt.
It is a long time to have a liability hanging over you, with no real understanding of who is going to do what to recover it.
Going bankrupt wherever it is gets rid of that uncertainty

Steve


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## suarez (22 Aug 2014)

Steve

I couldn't agree with you more!! 12 years is a terrifying vista for so many Irish people!! The question that needs to be asked and answered is why WOULDN'T the bank pursue people or sell on the debt to a third party - when it is within their rights to do it? People incorrectly seem to think that the banks consider sums of 100,000 euros plus to be small change. They don't. The present situation of not actively pursuing shortfalls could be explained by the fact that the banks are too busy - due to capacity constraints - working on voluntary surrenders and sales. The next stage - in a few years - could be an active pursuit of people who owe shortfalls. It wouldn't make financial sense on behalf of the banks to write off all of this money.


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## arcamsolo (28 Aug 2014)

I'm inclined to agree with Pat2 - its the calm before the storm, unfortunately


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