# Financial mess



## Peabody (20 Apr 2012)

Advise needed.

My current situation

About to wind up an insolvent company.
Not entitled to social welfare.
€200,000 mortgage on home incl 12,000 arrears. Worth 160000
Partner has an investment mortgage of 135,000 incl 6000 arrears
He has an MBNA credit card of 6000
He has a credit union loan of 6000.

So no income although he will be able to find work abroad with a good salary.

We would be happy to get rid of the investment property but I understand that the balance of the sale price will be owing about 55k. Looking at what I've just typed I feel we should declare ourselves bankrupt.


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## FioBi (20 Apr 2012)

It does look like moving to the uk and declaring bankruptcy is a sensible option for your situation.


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## Peabody (20 Apr 2012)

Oh good God. I wasn't being serious. Now I'm worried.


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## Macstuff (20 Apr 2012)

Don't decide to declare bankruptcy yet... that's crazy advice to give without understanding your situation. 

Can you think about these questions - based on your responses to them, we will have a better understanding of your finances:

Are you saying that you have no income once you wind up your company? 
What are the prospects of you finding employment in the next few months? 
If you can find it what will your salary be likely to be?
What about your partner? Is he earning anything at the moment? How quickly can he move overseas to work and how much and how quickly will he start earning? Is this something that you could both consider?
How much can you rent your house for? Will it leave a shortfall. What about the investment property - how much does it rent for? Does that leave a shortfall on the mortgage?


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## Peabody (21 Apr 2012)

I get childrens allowance, that covers insurances, phone & TV.
There will be no other income.
If we stay at home there is a chance of a part time job for me €120 per week but silly hours.
I would take it. His profession is more specialised & would be UK based. He worked there before and was miserable. His salary would be about 45-50k and work is easily available.

The investment property is being let out and rent is just under 1/2 of the mortgage.
renting out our home would leave a shortfall of 700e

I cant figure out how to clear the backlog of debt. My partner is a musician & today sold a beloved instrument. I hate to see this.

I really dont want to move, the kids are settled in school & the usual family stuff.
We need to decide fast.


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## Bronte (23 Apr 2012)

Peabody you are not giving the full facts and figures.  What money are you using to eat and pay utility bills?

Are you saying that your other half prefers to stay in Ireland broke rather than work in the UK and support his family?  Are you both not miserable at the moment?


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## Peabody (23 Apr 2012)

We currently are running a small business and we are about to wind it up. It never made a profit and we are stuck with VAT etc. Utilities like ESB, mortgages have built up.
We were silly and in denial and it was easier to ignore it. We are meeting with a solicitor tomorrow to discuss things. 
We are very miserable and very scared.


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## Pope John 11 (23 Apr 2012)

Your health is your wealth, look after it, things will work out eventually. We all, including me, have our difficulties. Keep the head up. 

Whilst the business never made a profit, did it break even etc., would someone be interested in taking it over, just a thought.


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## Bronte (24 Apr 2012)

Well Peabody there is no need to be scared for starters.  There are many people going through what you are.  It's just you don't see them but it's the same for lots of your neigbours, people just don't talk about it. 

You've made a couple of first steps, acknowledging that the business is not making a profit is a start, don't discount this failed business, the experience will stand to you.  You have choices.  You've come on here for advice and you're going to your solicitor.  Taking control of the situation is very important.  One can get so bogged down  in the stress of it that somethimes one cannot see a way out.  

How is your husband coping, watch out that he is doing ok, this kind of thing can put a strain on the best of marriages.  Do you have someone you can talk to about the stresses.  It's very important to get it out.

You have options, don't discount the UK because your husband had a bad experience there.  Is it better to be miserable in Ireland with no job and no money or happy in the UK with you both working and making a living?  The UK is not so very far away, easy to return to etc.  Have you both thought about going to the UK for bankruptcy?  You cannot go bankrupt in Ireland.

In relation to social welfare, as you were self employed you didn't pay the PRSI that entitled one to dole, but there is a safety net and if you have no income you are entitled to means tested dole.  Only problem there  is that the 'investment' property will be taken into account.  One of the social welfare guys on here might clarify that for you, or you could ask at your local social welfare office.  

Hope you're feeling better today and that your solicitor is able to guide you through your options.


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## Peabody (24 Apr 2012)

Just seems to be getting worse. Liquidator fees, sol fees, acc fees & we haven't a brass penny.
We have a sizable VAT bill. The house & investment property are in negative equity with arrears. We have credit cards, loans and a collection agency ringing us every 2 minutes.
Now we are considering bankruptcy in NI. He will be able to start work there in a few months. I'm just wondering can he live up there and both of us declare bankruptcy while I continue to live here, a commuting bankrupt if you will. I dont want to take the kids out of school.


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## 44brendan (24 Apr 2012)

You need professional advice specific to your circumstances. MAB's is an option, but I've heard mixed reviews from those who availed of their services. Other posters have considered the move to NI/mainland UK to declare bankruptcy. Do a search on the forum & you will probably come across those in similar circumstances. A PM may be appropriate for suggestions. I accept that the calls are a nusiance, but given that you have no income & no equity in property, there is nothing any debt collector can do. Bankruptcy will not solve your income deficit and that needs to be prioritised at present. Start from there & resolve how you can meet your basic living expenses. Do a summary of your financial position & send it on to all your creditors, advising them that you are insolvent & unable to meet any repayments. 
Priority ongoing is to look after the basic needs of yourselves & the children.


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## Bronte (24 Apr 2012)

Peabody did you have a meeting with the solicitor today. Is that solicitor experienced enough to advise you on your options re the UK and your options with your creditors. 

If you are going to do this bankruptcy option you should approach it professionally. How can you go bankrupt if you continue to reside in the 26 counties. It will smell fishy to the courts up there and apparently there is only one court that deals with these cases. I imagine the reason people go the full UK route is that you melt into the crowd more easily. Officially if the reason you go to the UK for bankruptcy then that is allowed, but it looks better if you say you are leaving Ireland for good, and looking for work in the UK, far easier to establish your COEI that way.

You've said you're scared and miserable, do you not think with a new job in the UK for both of you things would be a lot better.  You could start with a clean sheet.  Based on what you've posted there is no way you can pay back any of your creditors.


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## Peabody (24 Apr 2012)

I went to MABS before and the advise I got then was, you know what your situation is and you are informed as to what you can do about it, sorry but there is not a lot we can do about it. 
If we do go down the bankruptcy route I'm pretty sure I technically would have to live there but is there a way I can at least get around this on the qt. We live v near the boarder. Bold I know but its the kids, I cant take them out of that school.


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## Bronte (25 Apr 2012)

Peabody to me you are just looking for trouble. But I'm sure others have done something similar. But what if the bank proves that your kids are in school, not difficult to do and as far as I know there is only one court in the North for these cases so banks no doubt are tracking these things. 

Why can your OH go to the UK and you follow at the end of June when school ends. I understand the kids are happy in school but you've said that you and your OH are miserable. What if you get bankruptcy, what is the game plan after that, think it fully through. 

There was a current affairs programme on bankruptcy a while back, RTE, in it there was a solicitor from the North, that is the person I would contact if I were you. Seemed like a very capable person. Maybe someone else can give you his name.


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## sean.c (25 Apr 2012)

Hi Peabody.

Firstly, unless you have some income you aren't telling us about, you  are entitled to Social Welfare - everyone is.  Speak to your  Community Welfare Officer.  He should be able to help you get some  income going.  You need to apply for Jobseekers Allowance and all that  stuff.  The staff at the local social welfare office should be able to  help.

You need to start work on an assessment of means.  this will show your  creditors that you have no means.  Everyone will require this - teh  banks, the CU, the Revenue.

Let's face it, right now neither of you are ever going to get another  home loan, so there's no point trying to repay 100% of your borrowings  to protect some imaginary credit rating, which you no longer have.   You're probably not even going to get another loan of any kind for the  next few years.  So now the focus is on protecting your home and  children.

1. Contact Revenue re. the outstanding taxes.  You don't want to be  messing about with Revenue.  The VAT wasn't yours to spend in the first  place.

2. Contact the group "New Beginnings" to see if they can help with the  Mortgages.  At the very least, the bank should be able to let you  reschedule your home loan or repay only interest for a time being.

3. Your husband needs to forget about his 'investment' property.  The  best situation is that he sells it and the bank writes off the remaining  debt.  This will require some hard negotiating, which is why maybe New  Beginnings can help.

4. Screw MBNA.  That's unsecured debt - which is why the interest is so  high on credit-card debt.  Tell them you're not repaying and ignore  everything unless/until you get a court summons.  Then you'll go to  court with your kids and the judge will throw it out.

5. Work out a repayments plan with the CU.  But at the end of the day,  that's unsecured borrowings too (at least, secured only on your shares).

However the Credit Union might be able to help you out with loans to pay  the insolvency fees, and the Revenue debt.  Maybe also roll your  husbands CU debt into the same loan and work out a repayment plan.

Make it clear that if they can't help you with the Revenue and your  husbands CU debt, you wont' be in a situation to repay the existing loan  as you'll have to pay Revenue first.

6. AFAIK in order to be made bankrupt in teh UK you have to prove your  main interests are there, which you won't be able to as you live in teh  Republic, only have property/bank accounts etc. in the Republic.  It's  one thing if you're a rich developer with lots of accountants to  organise things, it's another if you're Joe Citizen.

hope this helps.


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## Peabody (25 Apr 2012)

Went to the solicitor and the VAT has to be paid. No choice. Dont know where that is coming from. He told us not to discount bankruptcy. Partner is willing to get rid of the investment property, probably has no choice. I've heard of New Beginnings I'd imagine their caseload must be sky high right now. No harm in a phone call though.
Love the idea of screwing MBNA ,what about everyday finance, love to screw them. In fact I'd love to screw them all. I sound mad dont I?
Going to see the accountant tomorrow, can't wait.


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## Peabody (25 Apr 2012)

Also I thought if you were self employed that you were not entitled to welfare.


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## WindUp (25 Apr 2012)

you are - but it is means tested


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## sean.c (26 Apr 2012)

Hi Peabody,

You're not entitled to Jobseekers Benefit and many of the PRSI benefits (dental, eye checks etc.)   But seeing as how the public health system is in bits, that's not such a great loss...

You are entitled to Jobseekers Allowance (this is what I was on when temporarily on the dole).  As you have no income, you should get the maximum allowance, which is equal to the Jobseekers Benefit anyway.  You may also be eligible for help with the home mortage and whatnot.  The staff at the local social welfare office should be able to help.

You will have to wait ages for a means test, so once you've applied, take yourself down to the community welfare officer who will get you on Supplementary Welfare Allowance.

Also apply immediately for a Medical Card.  I didn't get around to it and I'm cursing now.  Not only do you get free medical, you are exempt for paying the Universal Social Charge for the entire year, so when you do get back into thw eorkfoce, that's a nice saving....

Also don't forget to claim tax back on everything;
a) medical expenses not re-imbursed by insurance
b) stay-at-home parent allowance (800 per year)

good luck.


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## Bronte (26 Apr 2012)

sean.c said:


> 6. AFAIK in order to be made bankrupt in the UK you have to prove your main interests are there, which you won't be able to as you live in the Republic, only have property/bank accounts etc. in the Republic. It's one thing if you're a rich developer with lots of accountants to organise things, it's another if you're Joe Citizen.


 
This is not true, ordinary Irish people can and do go to the UK for bankruptcy.  It's not that complicated and you don't need lots of money to do it.  You can hire specialists in the UK to guide you through the process and if you cannot afford that, and their prices are no doubt based on how much you can afford, it's just an ordinary hum drum affair to the specialists then anyone with a bit of intelligence can figure out the process for a DIY job.


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## Peabody (26 Apr 2012)

Spoke with the accountant today. He thinks our position doesn't warrant bankruptcy, but to try and get a write down on the investment property which our sol reckons will be impossible. They both agree write downs will be inevitable but when is anybodies guess.


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## Bronte (27 Apr 2012)

Peabody, what actual concrete advice did you get from the solicitor and the accountant on what to do?

So far the accountant says to ask for a write down and the solicitor says it will not be possible, is that correct?  Is this just the mortgage, what about your other debts?  What experience have they both in relation to people in your situation.  Does the accountant say you will have to pay the VAT?


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