# Can I change the standing orders for payment, and / or walk away, from mortgage?



## munchy (10 Mar 2012)

Hi I am hoping someone can help me?

I have read through the threads and also understand some if the new law about personal insolvency but not know enough to know how to proceed next. 

I have a mortgage on an apartment that I am wanting to walk away from. I havent worked for 18 months and do not live in the apartment but am currently staying at friends houses for free (this is totally unsustainable of course) and so am trying to let rental income cover for the mortgage. This means I have no personal income whatsoever except for job seekers allowance. 

I have had the loan restructured to interest only twice now for 6 month periods at a time with the EBS and still the rent is about 300 euros short every month and I scrape that together to lodge into my account every month. But I have had no spare cash to do this with and my BOI account is now in overdraft and will shortly bounce on the bottom.

I want to stop the repayment standing order with BOI and set up a new standing order with a reduced amount which is sustainable for me, or alternatively just walk away. I am so fed up and willing now to emigrate and will likely to that anyway to find work. I am not yet sure if I can walk away ... the new legislation comes into effect later this year right?
Can the long arm of the banks find me in 20 years time to repay and will my credit rating be in ruins wherever I go? This is so depressing and I have spoken to the bank and yet all they say they can do is interest-only. The interest only payments are still pretty high and dont make much of a difference. I have asked for a mortgage holiday and extended period for the load but they say no even though I have no job or income. 

The idea of someone repossessing my next family home in 20 years time terrifies me although it will likely be in my spouses name (not comm in prop) This current 'home' I said goodbye a long time ago when I decided to hand it over to tenants and live with friends instead so I am free to walk away and start again but dont want that to happen in the future when we settle down eventually.


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## 44brendan (12 Mar 2012)

> Can the long arm of the banks find me in 20 years time to repay and will my credit rating be in ruins wherever I go? This is so depressing and I have spoken to the bank and yet all they say they can do is interest-only. The interest only payments are still pretty high and dont make much of a difference. I have asked for a mortgage holiday and extended period for the load but they say no even though I have no job or income.


 
As you state in your post the mortgage is now unsustainable. Because you don't own another property in the state this mortgage now relates to your PPR and you are entitled to MARP in terms of dealing with the Bank.
However, I acknowledge that interest only or any other repayment agreement will not address the fact that this loan is unsustainable and the fact that it is hanging there unaddressed is causing you much concern.
Write to the Bank advising them of your exact financial position and that you are not in a position to contribute any payment towards this mortgage (assuming that your only income is SW). Tell them that you are prepared to fully co-operate in any sale of the property on the basis that this is accepted as a full and final settlement of your debt. Register the letter.
They will not accept this offer initially, but hold firm as ultimately they have really no choice. Given your financial position legal proceedings will get them nowhere and while the threat of leagl process may sound intimidating the reality is that if you have minimal income and no assets most Banks will not bother progerssing beyond threats. The worst they can do is obtain a judgement against you, which will damage your credit rating, but the effectiveness of all of this will disappear after a couple of years.


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## munchy (12 Mar 2012)

Thanks Brendan!
Well, I dont think the bank is treating it as my primary residence since Im renting it out (Im staying with generous friends at the moment) and I wonder if this will work? Of course they know all of the this and other details as I had to fill in forms before when I went for the interest-only application. But now I think I will write it down again and send it to their head-office by registered mail (I was dealing with someone directly in a branch until now)
I am wondering what the new insolvency law will bring as I am very worried about starting again and getting everything confiscated by the banks in 20 years to come. I am getting married (anc contract) so I could put anything new in my partners name? I wonder if its safe then?
Also, if we head to Aus or Canada or South Africa for a while is that the same as going to the UK where I can declare bankruptcy?


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## 44brendan (12 Mar 2012)

As this is the only property owned by you in the State it is your PPR, despite the fact that it is currently rented out. 
New insolvency legislation is due to be finalised by end April. however it will take some time before it is enacted.
You have no fear about any subsequent confiscation by the Banks in 20 years time. An actual judgement only stands for 6 years (statute of limitations). In fact banks do not continually re-visit old judgements on the off-chance that people's financial circumstances have changed, so if you have no assets at present and that remains unchanged for the next 3/4 years you are safe enough from any subsequent action by the Banks.
I wouldn't worry about bankruptcy either. it's not worthwhile, given that this property is your only asset. The bank has enough problems to worry about, so no need to concern yourself about any long-term reprecussions. Follow through with that offer to them and realistically there is nothing else that they can do but to ultimately accept your proposal.


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## munchy (13 Mar 2012)

Thanks again Brendan
Its better than I thought - Im less trapped than I had expected to be
But there is one snag ... I realise that I have 2 x mortgages with them which I always lump together - one was an equity release I used to pay of a bunch of other debts at the time (back in 2006) and I got both of them down to interest only last year and I was going to write to the bank about both but suspect they will treat the equity release morgage payment separately, and not let me write it off?


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## munchy (13 Mar 2012)

So today I went down to my bank with my current account (BOI) to ammend my direct debit with the mortgage provider. I was going to cut down the current outgoing repayment down to about half, which I felt I could afford. I was then going to follow up with the mortgage provider and explain that I was going to pay around 500 euros per month instead of the current 1000. 
But .... when I went into BOI they said that neither they nor I had the authority to amend (or cancel) the amount. They encouraged me to "speak to the mortgage provider" but I have already done that twice and they were adamant that the interest-only was the option etc. It seems that they control my bank account and I have no power to change it.
If I have to 'ask' the building society for their permission to half the direct debit, that could take many months and much wasted money moving out of my account. It is already in deep overdraft.
What to do, please!?


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## demoivre (13 Mar 2012)

You can cancel a direct debit by writing to your bank. See


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## munchy (13 Mar 2012)

OMW .. Thats great, thank you demoivre. The person I encountered today at customer services obviously didnt know any better and presumed I couldnt amend it. Ill write to their headoffice instead


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## munchy (14 Mar 2012)

Hi . So I went to deliver a letter to BOI today to cancel my direct debits for the mortgage and I got quite a frosty response from customer services lady (thats to be expected I suppose except my mortgage is not with them - only my current account) Anyway, when I asked her if they are now definitely cancelled she said that on the date there was a chance that they DD would go through again because "they may _force _payment if its part of your terms and conditions"
So, is it possible that even with my written instructions to cancel direct debits, they can force a payment? In that case I will close that account ...
(Fyi I also wrote a letter informing the mortgage provider today that I have done so and will resume payment in the form of a standing order with reduced amounts that I can afford to pay etc so I will be informing the mortgage provider before they try and request payment from BOI)
What recourse do I have in case they keep paying the direct debit?


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## Bronte (19 Mar 2012)

Your mortgage is unsustainable and you living with friends is also not tenable long term.  You need to speed up the repossession so that you can get started on the road to finishing this situation.  Move back into the apartment and then as you are on social welfare make no repayments and write to the bank that you have no income other than social welfare and that you are willing to do whatever is necessary to sell the property.


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## munchy (19 Mar 2012)

thanks for that
yes, I have written to them and stopped payment (well, reduced payments by half anyway)
I just wonder what they will do next?
Since I am still paying a trickle every month for now, can they still attach a judgement against me and I wonder what a judge would say anyway if I am still trying to pay a little every month?
Ive not suggested repossession to them yet (Im 100k in neg equity) and only suggested a much reduced repayment which cant be sustainable over a longer term as they will never recoup their expenses or loan from me this way. This can only work if I can carry on trickling along for a few years until the property is worth something again.
Then I wonder how on earth we will reach an agreement ito interest on interest with partly paid installments accumulated over time?


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## Bronte (20 Mar 2012)

munchy said:


> Ive not suggested repossession to them yet This can only work if I can carry on trickling along for a few years until the property is worth something again.


 
I'm sure they are already thinking of repossessing.  Only problem is that if you live in the apartment they are forced to go the Marp route,  presumably you can waive your right to this, as there is no benefit to it other than living rent free for a couple of years.  You are on the dole, living with friends and think you should just trickle along until property rises.  You are not thinking straight.  This situation will only get worse and the stress is not worth it.  You've no spouse, no kids and now is the time to sort this once and for all by getting rid of the property.


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## no money Mo (20 Mar 2012)

Bronte said:


> I'm sure they are already thinking of repossessing.  Only problem is that if you live in the apartment they are forced to go the Marp route,  presumably you can waive your right to this, as there is no benefit to it other than living rent free for a couple of years.  You are on the dole, living with friends and think you should just trickle along until property rises.  You are not thinking straight.  This situation will only get worse and the stress is not worth it.  You've no spouse, no kids and now is the time to sort this once and for all by getting rid of the property.



I think living rent free for a couple of years is of great benefit to you. Dont jump the gun and go the MARP route, it was put in place for a reason. Also apply for the "differed interest scheme", as the apartment is you PPR the bank have to give a repayment of two thirds of the interest for the next five years and add the remainder onto your mortgage without any penalties.


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## munchy (20 Mar 2012)

Many thanks for the help and advise

To be honest I cant quite work out what Marp is and probably trying to get my head around it before I make a decision, and I like the option of deferring interest as No money Mo suggests but wonder why the bank didnt suggest this last year when I went to them twice and they were adamant that interest only for 6 months was my only option. Is the 'deferred interest scheme' new and is it a legislative measure that we can use to protect us, or do we wait for the bank to suggest such an option?

I havent heard back yet from the bank

At the moment I am hoping to get my bank account back into the black and out of overdraft by letting the rental income build a little. I am repaying about 3/4 of the rental income to help bring my account back out of overdraft. This is better for the time being until I decide what to do.


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## no money Mo (20 Mar 2012)

Hi Munchy, the deferred interest scheme was brought in about a year ago. Tell EBS you would like to apply for it, they have to give it too you. Its quite a straightforward application. You may not have heard of it earlier because it only covers the Irish bailed out banks.

Don't get stressed out, it serves no purpose.

Good luck


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## munchy (20 Mar 2012)

Thanks!
This could really make a difference and I wonder if they will suggest it regardless after seeing that it may fit into my range of afforability.
Ill let you know how it goes


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## munchy (14 Apr 2012)

Hi guys
Just to come back with an update. I wrote to my bank some weeks ago informing them of my incomings/outgoings and that my mortgage was wholly unsustainable and that I would be cancelling my direct debit and installing a revised standing order of an amount which is affordable etc. I also wrote quite a long letter saying I was open to any sort of discussion and agreement etc and was very sorry it had come to this. 

Last week I got a reply from them which was surprisingly short and uninformative.

Just "Thank you for writing to us inquiring about your loan. We recommend you contact your nearest branch to discuss your inquiry. We hope this above information is useful etc etc" and that was it. Now every time Ive been into the branch over the past 12 months I have always been told unequivocally that interest-only was my only option and nothing else would be entertained hence my reverting to taking things into my own hands, and writing to their head office instead. 
Their letter seems decidedly vague and their reference to and "inquiry" into my loan is not accurate as I was not inquiring at all but simply telling them of my situation and plan. 
Officially I would be in partial default from this month as I am repaying only 70% of the repayment value (ie the rental amount) and so when I officially default I presume that they will write to me again?
What next?


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## no money Mo (16 Apr 2012)

I'd say they're happy enough getting 70%. A good friend of mine hasnt made any payments on a mortgage he has with PTSB (185k) since last May, they phoned him once last August.


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## Bronte (17 Apr 2012)

They will probably do nothing for now, they are deperate for people to keep paying anything.  This however is of no long term benefit to you, only them.  All you are doing is going more and more into arrears.


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## munchy (17 Apr 2012)

Bronte... can I get a bad credit rating in the meantime, with a judgement or me being aware of it? Since I will be in "partial" default rather than full default. I am almost more worried about a bad credit rating than the property per se


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## 44brendan (17 Apr 2012)

As you are not making the agreed level of repayments to your mortgage you already have a "bad credit rating". This may or may not be registered with the ICB. You can do your own check on this. has a judgement been registered against you? This would not be done in respect of your mortgage!


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