# Walking away from debt



## southside100

Seriously considering walking away from debt. Own an 1 bed apartment that was worth 360k at the height of the boom, still owe circa 315k, current value is 130k. Wife was made redundant from a well paid job and has found a new job but at a fraction of what her previous salary was.

Kid is growing fast and we need to rent a bigger place. Bank will not let me sell and work out a deal to pay off Neg Equity which I would be happy to do. They refuse to let me move with Neg Equity either. If I rent the place out I wouldn't even get 50% of my monthly mortgage repayments so this is not an option.

New Govt have done absolutely nothing to help struggling homeowners and seem to be spending more time jet setting around europe and the US than looking at the state this country is in.

We're running out of time and options and are seriously considering emigrating and posting the keys back to the bank. This is not something we want to do but feel we are not being offered any help from the Banks or Govt.

If anyone has any information on going to the UK to file for bankruptcy could you please PM me and offer some advice.


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## southside100

forgot to mention we're on Interest Only repayments at the moment which is all we can afford for the foreseeable future. Its not a case of, we can afford the full repayments but just don't want to pay. We're just about scraping by every month which is not how I want to live the next 30 years of my life!


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## Codogly

*Walking Away ....*

Unfortunately what you say makes sense ...given the figures involved , the government and bank need to wake up to this fact quick.  People will have no choice but to walk away.


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## colm5

If I were in your situation it would be hard not to contemplate this when the flip side is being swamped in dept for the next 10-20 years or so. Life is too short.


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## krattapopov

Am in a nearly identical situation to yourself, on interest only, scraping by. What is the worst that could happen lol!? Could it be worse than spending the next 30 years doing what we're doing?!


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## Codogly

I can't see how we ( Ireland ) are not going to have thousands of cases of default in situtations like you guys face , what else are these people to do ..." the morally right thing and struggle for the next 30 years " only a fool would take that option like colm 5 said Life is simple to short ... 

The Government and Banks need to allow for this by introducing generation mortgages allowing people to live a decent quality of life while the property market recovers over the next 10/15/20/25/30 etc years ...afterall surely your houses /appartment will have recover some if not all of their value by the time your will is being read out ...


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## ontheedge

Im in the same boat , I would suggest getting professional advise here.But i cant find anybody working in this area day in day out ....who can give practical advise ..

Please pass on any details if you find such a person.


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## iscritto

"We're running out of time and options and are seriously considering emigrating and posting the keys back to the bank. This is not something we want to do but feel we are not being offered any help from the Banks or Govt."

Post the keys... sign the papers.. bank sells house and chases you for the shortfall from sale. They may not be able to find you now however the more people that walk away the better the bank will get at finding people and getting their money. 

I don't think walking away is the right option but can't really offer a better one. 

I presume you have spoken to the bank about repaying less than the interest only amount... another waiting game... leaves you hoping the banks/gov will do something to help however this is a big gamble.


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## Firefly

iscritto said:


> Post the keys... sign the papers.. bank sells house and chases you for the shortfall from sale. They may not be able to find you now however the more people that walk away the better the bank will get at finding people and getting their money.



The interest on the shortfall will also start accumulating.


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## gearoidc

Life IS too short. People were stupid-no doubt about it. But the neg-equity-life-sentence hole people now find themselves in is far too great a punishment .
You are just one of many and what will eventually come down the tracks will make a new approach - both from banks and from govt - unavoidable. Along with the broader European question, the whole thing is an incredible mess
I agree with the notion of extending mortgages indefinitely as suggested above but really don't know how that would play out.


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## Pope John 11

http://www.examiner.ie/ireland/group-casts-off-arrears-stigma-158601.html

Why don't the persons in mortgage arrears come together to discuss matters and options etc. as per the woman on the attached extract, which was in the news recently. There is an e-mail in that extract too.

This is not what the banks or the government want.

They will leave people suffer as long as possible without any help, but with a click of a finger will bail out the developers and the banks who caused this mess in the first place.

There are many persons made redundant too through no fault of their own, the banks, the government and the developers made the mistakes.

Like I have said it before anyone in trouble with their mortgages would have been better off borrowing €100m+


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## random2011

Exactly the same situation

300k mortgage

30 years left

Variable rate almost over 6%

1450 month

Property worth 100k

Love the house, its our family home but even at that had to move away from the city and now spending a fortune on petrol to get to work. Wife is the same. We work hard and have no disposable income.

Dont want to have to emigrate but worked out paying 1450 *360 (30 years) over 500k is depressing on a property worth so little.

Have to say also my broker gave me the worst deal he could. Threw us on a fixed rate mortgage when a tracker wud have suited us obviously. During fixed rate the rates kept dropping. After coming off fixed rate he then advised going to variable when the bank offered a tracker. Although tracker wanst great at that stage. 3% over ECB. The PTSB 1% hike was painful along with the other .25% hikes. That was 18 motnhs ago and the mortgage has gone from 1079 to 1450 and another rate hike at the end of the year looks possible.

Dont know where to go but i dont want to have this debt with me for 30 years. I would be quite happy paying 1200 a month for the duration but the cost now combined with the worth of the property is just ridiclous


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## niceoneted

Random 2011 you have to think though what might the house be worth in 30/40 years. Property prices goes in cycles. Would you save the 500k in the 30 yrs? Probably not. 
What about looking to go interest only for a period or interest only with some capital payments up to €1200. 
You had a responsibility too when borrowing so you cannot put all the blame on the banks/broker. Responsibility lies with all.


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## Sissywish1

Hi all, I'm in the same situation:  Mortgage 288K, worth 130k 2 bed apartment that I own with my ex.  Lovely.  I'm seriously getting depressed thinking I am stuck with this place for the next 20 years.  I even thought about taking the hit for the shortfall just so I don't have the apartment.  I would love to post the keys back, but I live in hope the government will introduce a scheme to help us.   We are the forgotten generation:  labelled as being 'greedy and stuipid'.  Yes we made mistakes, but please let us live our lives.   How do we publiscise our genuine plight?


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## Jim2007

niceoneted said:


> Would you save the 500k in the 30 yrs? Probably not.



Actually you'd save more... even in the worst case, depositing interest compounded over 30 years would add a tidy some to it

Jim.


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## potnoodler

those posts are so depressing heart goes out to anyone stuck in those horrible situations, nearly ended up in the same trap myself.
Government will have to do something soon as these defaults which will happen will end up with the tax payer anyway. 

Front page Sindo this morning has an interesting story which could mark the start as it  

http://www.independent.ie/national-...iteoff-gives-hope-2817819.html?from=dailynews


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## southside100

yes, I read that story this morning, great news for that couple but I can see the Banks coming out all guns blazing in response to this tomorrow morning saying they will not be giving any Debt Write Down's. 

The Govt need to do something to force them to do it, seems as though they own all the banks now.


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## Magpie

Questioning your judgement, fine. Trying to live your life with the massive millstone of massive negative equity and the horrors that can go with it is a different matter. And killing oneslef to pay up when those who had a much bigger hand in the mess live happily in their mansions with their fat pensions, just to satisfy the moral outrage of those who got lucky enough to be born a bit earlier and had it easier, well forget that.


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## southside100

people make mistakes in life, unfortunately those that caught up in this mortgage mess have to suffer the consequences for 30-35 years, you only get 7 for murder!

I'm really surprised at the negativity towards people who are genuinely struggling out there trying to make ends meet. I'm barely scraping by each month, its a horrible way to live. Try to live my life for a few months and see if you still feel the same way.

Banks were stress tested and are now overcapitalised to allow for defaults in the coming years, so why not start using it!!


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## Jim2007

southside100 said:


> Banks were stress tested and are now overcapitalised to allow for defaults in the coming years, so why not start using it!!



Sorry to burst your bubble, but the banks are anything but over capitalised, they are in fact just about keeping their heads above water and will be required to raise further capital in the next few years, as will most European banks.

Jim.


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## Time

My heart bleeds for them.


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## millieforbes

I think this is a key quote from the article...

_Mr Joyce said: "I believe that there will only ever be debt forgiveness for individuals who are financially ruined; ie, they have no job, they have no assets and are in negative equity. Otherwise the concept of an across-the-board debt forgiveness regime is not practical."_

I don't think we'll see debt forgiveness for people who don't want to live in their homes and don't want to spend years paying off negative equity but we might see it for those who can't conceivably pay anything


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## JoeB

How can we determine who cannot pay anything?

Would smokers be forced to stop smoking?

Would parents not be allowed to use fee-paying schools?

If smokers are allowed any form of debt forgiveness then they don't fit the criteria 'cannot pay anything'.. they could conceiveably stop smoking and use that money for debts.


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## paperclip

Ouch, that's some serious negative equity op. You must have just bought before the ship went down.

Well they've only left you with 2 choices, walk away, and live your life free of this horrible debt. Or struggle in debt for the rest of your life.

I guess you need to ask yourself, what would be the sane thing to do?

They're not really giving people much choice here. I've been reading a few posts on this topic here, and I can't believe how un co-operative the banks are.

This is a very gray area. Is it right to walk away from debt, no. Is it right what happened to people because of the government, reckless banks and developers, no.

If the banks aren't willing to meet people half way... then why would someone choose to spend the rest of their life paying off huge debts like these?


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## 44brendan

Options and consequences;
No action;- Continue to meet int payments on the loan. Sooner or later this will need to come to a head. I.e. either you commence meeting P&I repayments or the Bank takes some action. Given the extent of negative equity I see no real benefit in looking at this as a long term strategy. 
Walk away (Burn the Bankers):- While morally this may seem to be a major issue it has to be looked upon as a realistic option. The consequences are that the Bank take posession of the property and take legal action against you for the residual debt. This legal action will lead to a judgement being registerd in time and the Bank may decide to proceed for an installment order. Unless your financial position is better than that indicated by you they would be unlikely to obtain anything other than a token instalment which may not be worth their while. Judgement will hold for 6 years but while it will restrict you borrowing further in that time it's not necessarily a millstone around your neck.
My response would be to go for option 2 but you need to consider carefully before making any decision. Also discuss with friends/family.


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## Pope John 11

Yorky said:


> Because they made a decision to purchase property and with that there are inherent consequences.



Yes THEY borrowed the money to purchase the property and THE BANK lent the money to the borrower.

There should be a 50% responsibility on both the part of the borrower and of the lender.


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## JoeB

Pope John 11 said:


> Yes THEY borrowed the money to purchase the property and THE BANK lent the money to the borrower.
> 
> There should be a 50% responsibility on both the part of the borrower and of the lender.



The bank are still upholding their side of the deal, as the borrower has had the money. It's the borrower who is failing to live up to the agreement. So I can't see the logic where the lender has to take responsibility for the borrowers failings.

Having said that if I was in serious negative equity I'd probably look into emigrating.

I think in the future all mortgages should be non-recourse mortgages, where people can walk away at any time. Either that, or it's made clear that if banks suffer losses they will fail, and won't be bailed out.

It seems we had some banks that were too big to fail.. so no we're basing our comeback on two pillar banks.. well, those pillar banks must be gloating, .. as it's unlikely they'll ever be let fail, .. so they can do what they like, with no downside. We've already seen it, with the government unable to insist upon anything, despite nominally owning the banks.


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## hydeman

The banks lent the money to the developers to buy the land, the developers bought the land, the vendors of the land went off to the bank and deposited their money, the bank then lent the money to the developers to build the house, then, they lent the money for the borrower to buy one of these sh1t holes(we wont open a debate about the appalling building standards here). So the bank benefited '4 times' for the one house i.e 3 loans and a deposit.  The bankers were the professionals and knew that property was grossly overpriced(both BOI and AIB sold their headquarters in 05 yet bizarrely continued to lend to people so they could buy the grossly overpriced property). Some people were wise enough to know that property was extremely overpriced and refrained, other people were led to believe by the government and banks that they simply had to get on the ladder(now more of a snake i would say!). Ok, I think I am just ranting now, anyway back to your problem of what to do with the 1 bed.

Here is my advice....move out and rent a new place i.e 2 or 3 bed, which is what u need with a family, stop paying the mortgage on the 1 bed entirely, the bank will repossess (dont hand back the keys as ur social housing entitlements will be effected) and sell....eventually. They will then obtain a high court judgement for the residual balance and seek to attach this to any assets you might have - as u are renting u wont have any! Caution - this may not be a suitable plan if u are expecting to inherit ur uncles farm or parents house etc.  Yes your credit rating will be shot, but I think I would prefer to have my credit rating shot then share my bedroom with my wife and teenage son...sorry i am not trying to be disrespectful, i'm just lying it on the line.

The only other thing the bank can do with the judgement is to attach it to ur income, however the banks are taking judgement left right and centre at the moment but are not actively following up on these? Why not u ask? Well they possibly might in the future, just doesn't seem to be a priority right now. The main reason the banks are taking out judgments is to keep the 'loss' on the sale of ur house off their balance sheet, judgments, imho, are nothing more than a means for the bank of hiding losses i.e. taking a judgement means its not actually a loss, technically anyhow!

if u continue to rent, a court will have to leave u with enough of ur income to support ur family and u might end up having to pay a small amount towards the residual balance if the judgement is successfully attached to your income.

The other option is to emigrate. One thing I will say however, the banks certainly do have some dam good investigators so dont think they wont find u overseas if they have to, dont fret however as u are overseas, so while they might find u there is little or nothing they can do to you.

Best of luck, I feel really sorry for ur situation.


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## Mark Pig

I left behind almost half a million in debt, they won't find me. Changed name, revoked Irish citizenship. I wish them the best of luck. Any 2 bit judgement from Ireland would be laughed at here in any event.


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## Jim2007

hydeman said:


> The only other thing the bank can do with the judgement is to attach it to ur income, however the banks are taking judgement left right and centre at the moment but are not actively following up on these?



Only time will tell, but they could seek to have you declared bankrupt, which would put a very different spin on your scenario!!!  



hydeman said:


> there is little or nothing they can do to you.



Only time will tell, but if you live in a country who's law is based on the Napoleonic code, then they could at least register the debt against you, which in itself would make life very difficult, as you are very often required to produce a letter showing that there are no debts registered against you, for example:

get a credit card
take out a bank loan or other credit facility
gain employment in the areas of: Banking, Insurance, Law, Accounting...
other employment involving the acceptance of money: cashier, front office clerks and so on

I expect that it will be a few years before debt collection becomes a big issue, but I would not plan on there being no follow!  

Jim.


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## Pope John 11

Yorky said:


> Wrong. The bank was simply providing a financial service



Yes but it is the banks responsibility to stress test the borrower correctly, this did not happen in the boom times. 

Also persons who have lost their jobs could still have those jobs only for the reckless lending on the part of the banks to developers. The banks have to be held accountable.

If a bank loans the borrower the money, there is a risk that the bank takes on, that the borrower may not pay back some or all of the money borrowed.


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## jetstream

..


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## jetstream

Yorky said:


> Wrong. The bank was simply providing a financial service


 

The Banks provided a financial service outside their terms and conditions (1.5 x earnings). Therefore the banks should be held 50% responsible and liable. Not everybody lies about there earnings to get a morgtage so how can u justify a person earning 60k and getting a mortgage for 500k ??? Sorry but thats just crazy, what kind of financial service is that ??? More like fraud, deception, misguidance even possibly a breach of their own terms and conditions by themselves ?


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## Jim2007

jetstream said:


> The Banks provided a financial service outside their terms and conditions (1.5 x earnings). Therefore the banks should be held 50% responsible and liable. Not everybody lies about there earnings to get a morgtage so how can u justify a person earning 60k and getting a mortgage for 500k ??? Sorry but thats just crazy, what kind of financial service is that ??? More like fraud, deception, misguidance even possibly a breach of their own terms and conditions by themselves ?



Exactly what terms and conditions are you referring to???

With respect to the 1.5 earnings cap, where did this come from???  

Exactly what fraud and deception are your referring to???  Are you referring to a particular case, a court action, an investigation or what???

Jim.


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## rustbucket

A lot of people are in the same position as the OP. It seems the OP has engaged the bank to help find a solution and the bank are not willing/able to do anything about it.

So the OP now only really has two options. 1. Post keys back to the bank.  2. Struggle for God knows how long, get into arrears, possible default, legal proceedings etc.

For me, family is number 1. If I were the OP I would certainly take option 1 if it meant keeping my sanity, putting food on the table etc. 

Despite what some people say, the banks Do need to take some of the hit. Especially as they have themselves been bailed out by the taxpayer.

Yes people bought at overinflated prices but I think the majority of people did not have any conception that the boom would end so suddenly. For most people (like myself) it was not about how much the place was worth, it was getting a place to live!

In relation to the banks, Im wondering why they could not have put a stipulation in when the taxpayer bailed out both AIB and BOI (and the rest) that part of the re-capitalisation would result in a write down on the value of mortgages for people in Negative Equity


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## Jim2007

rustbucket said:


> For me, family is number 1. If I were the OP I would certainly take option 1 if it meant keeping my sanity, putting food on the table etc.



This is not the US and the borrower's obligations do not finish simply by sending back the keys, much as we might like it to be.  The bank could very well sell the house to the highest bidder on day and the borrower would still be liable for the balance, only difference is that he would be minus the house!!!    



rustbucket said:


> Despite what some people say, the banks Do need to take some of the hit. Especially as they have themselves been bailed out by the taxpayer.



I wish that people would understand the reality of the so called bail out - The state took over a couple of bankrupt banks and for all practical purposes now owns and  operates those banks using the tax payer's money.  Any further write down in their loan books will have to be underwritten by the tax payer once again and so what you are really suggesting is that the tax payer should take yet another hit!  



rustbucket said:


> In relation to the banks, Im wondering why they could not have put a stipulation in when the taxpayer bailed out both AIB and BOI (and the rest) that part of the re-capitalisation would result in a write down on the value of mortgages for people in Negative Equity



There is a big difference between being insolvent and owning a property with negative equity.  And while it might be possible to get the tax payer to agree to providing some support to those who find themselves insolvent, I expect that getting the electorate to underwrite those with negative equity will be a very hard sell!

Jim.


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## jackbetal

Yorky said:


> Because they made a decision to purchase property and with that there are inherent consequences. If house prices had continued to increase exponentially there would not be posts such as these from _current _homeowners despite the affordability implications for would-be purchasers and the wider social implications.
> 
> Anyone who buys property believes in *the free market economy* and the risk of a collapse in prices is an inherent part of that.


 
And the underlined part is exactly why your argument holds no water. As soon as our government decided to socialise the private debts of the banks and therefor creating a knock on effect which has totally destroyed our economy then the integrity of the free market was gone. Most people would not be in the situation they are in if the country was not irreversablly damaged by the negligence of our last governement. 





Yorky said:


> Suggesting or encouraging the abrogation of responsibility for debt is reprehensible. No-one was coerced in to buying property and anyone who didn't see the property bubble for what it was should question their judgement.
> 
> We all make decisions and are responsible for the consequences rather than offloading the responsibility to society writ large.


 
People didn't sign up to the responsibility which they are now burdened with. That was lumped on them by our governement. When they signed up to their mortgages they signed completely different deals.


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## Complainer

jackbetal said:


> When they signed up to their mortgages they signed completely different deals.



What was different?


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## jackbetal

Complainer said:


> What was different?



They didn't foresee that our economy was going to contract more than any other economy ever since records began in the Western world. Surely ordinary working class people were not expected to see that our government would completely destroy our economy through a mixture of complete corruption and incompetence. The average home buyer is not a mixture of one half clairvoyant and the other half top economist. The majority of those currently in this hell which they are in just wanted a home for their family and some other may have got a little extra so as to have a pension waiting for themselves. Is that a crime punishable by what is happening? Certainly not considering they have been cheated by those in power who were paid big money to protect the citizens of the land.


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## Complainer

jackbetal said:


> They didn't foresee that our economy was going to contract more than any other economy ever since records began in the Western world. Surely ordinary working class people were not expected to see that our government would completely destroy our economy through a mixture of complete corruption and incompetence. The average home buyer is not a mixture of one half clairvoyant and the other half top economist. The majority of those currently in this hell which they are in just wanted a home for their family and some other may have got a little extra so as to have a pension waiting for themselves. Is that a crime punishable by what is happening? Certainly not considering they have been cheated by those in power who were paid big money to protect the citizens of the land.



Can't argue with that, but just to be clear - the mortgage deal that they signed up to hasn't changed.


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## JoeB

There is no solution unfortunately. There are simply far more debts than savings, and no-one left has any money for any further bailouts.

The banks have no money left, and can't take any further hits. 

The system is that the people who owe millions are let off first, and millions of people who owe smaller amounts are chased and allowed no leeway.


The problem is the banks making silly decisions and going out of business as a result. This shouldn't be a problem I wouldn't have thought, but apparently banks going out of business is bad. (Why?)


The other fundemental problem is the fact that house prices can fall as well as rise,.. it appears that not everyone understands that fully. So should the government prevent people from purchasing houses on the open market? (That would prevent this problem in the future)


So perhaps people should only be able to buy houses if they have 100%, or 80%, or 50%, rather than 0%, or 2%, or 10% as previously. But people don't want this, they want to buy now, and have everything now... well, the problem there is that they're also taking on the downside risk, which has clearly caught a lot of people.


So can we force the banks to take on these downside risks? Well, yes, through non  recourse mortgages, where the borrower can hand back the keys at any time. The borrower still loses out big time, but the banks take the entire (or a majority) hit for property crashes.

So what's the problem? Well, the non-recourse banks would need a lot of money, and most banks would go out of business during crashes. Bailouts must be ruled out by law, and can only be given after a referendum. I'd prefer to see bailouts for private companies ruled out completely... they must learn to understand that if they fail, they fail, simple as that, it applies to all other industries.



So perhaps the general public myust be prevented from making what might be (might be), silly decisions, by preventing people from spending money on houses. 


Maybe the government should own all houses. If you want to sell, you sell to the Gov, if you want to buy you buy from the Gov. This might prevent speculation.


Rapidly rising house prices are bad it seems.. as people cannot save quickly enough to keep up with prices, so houses get more and more out of reach. Such people should rent and wait for the next crash.


Government intervention to prevent rapidly rising house prices distorts the markets, .. 


The only solution I see amounts to a dictatorship., or communism.. the free market results in winners and losers, people who fluked good timing, and those who didn't. We can't allow the winners to win, and the losers to be bailed out.. that system doesn't work for anyone.


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## jackbetal

Complainer said:


> Can't argue with that, but just to be clear - the mortgage deal that they signed up to hasn't changed.



It is true that the deal has not changed but would the mortgage contract be open to challenge to void it on the basis that one party has created a situation whereby it is making it extremely difficult and near impossible for the other party to honour their side of the contract? Surely that would be a very simple thing to prove in a court. The simple reason people cannot pay is because of the complete social change since the contract was initially signed by both parties brought about by the blanket bank guarantee which was in response to the negligent behaviour of one party of the contract.



In response to JoeBallantin I will repeat what I kind of mentioned in an earlier post. We live in a capitalist society whether we agree with it or not. Therefore that is what our government policies should adhere to. They did not. They decided to suspend capitalism to socialise the private debts of private banks on September the 29th 2008. Socilaism for a select few. That distorted everything from there on in.


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## Gekko

What about the thousands of families in north county Dublin and surrounding areas whose lives have been destroyed by Pyrite?

There are families who paid €400,000 for homes which are now virtually worthless.  The developers have gone bust so there's no point chasing them.  It transpires that Homebond is useless as many developers never paid the money to them and even if they did only a relatively small amount of money is available per development.

I'm not personally affected by the above scenario but I advocate full debt forgiveness for people unlucky enough to be in this situation.  Someone has to carry the can and it should be the State or the State through the banks it owns and controls.


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## jackbetal

Gekko said:


> I'm not personally affected by the above scenario but I advocate full debt forgiveness for people unlucky enough to be in this situation.  Someone has to carry the can and it should be the State or the State through the banks it owns and controls.



If what you say here then you are a rare enough thing in this country we live in. There are far too many begrudgers and these type of people would rather see the misfortunates live miserable existences for the rest of their lives rather than find a solution.


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## Sissywish1

I agree with Gekko, I notice that the words 'moral hazard' are oft mentioned when the idea of debt forgiveness is brought up.   However tax, by its very nature, is a moral hazard - designed to help those in society who are most in need.   Young people who commited to (unbeknownst to them) unsustainable mortgages, to buy homes with prices encouraged to inflate by the actions of a corrupt and ill-managed government are in need of help.   We all know FF not only ignored multiple warnings about a property bubble, but continued to expand the bubble through ill conceived tax laws, combined with a regulator who didn't perform his most basic duties.   

Debt forgiveness to some degree is a moral hazard, as is social housing, as is rent allowance and free travel for the over 65's - ulitmately tax payers are paying for something that they will not use or benefit from in the immediate future.   The difference though, is that, as a society, we should look after those who most need our help to ensure that quality of life is maintained at all times.   Without that, where does that leave our society?   Whether their situation is brought on by their own actions, or bad luck - they should get help when they need it - the hell that is negative equity is no different.   We're the ones who need help now, so please please let us move on with our young lives.


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## frostie

ontheedge said:


> Im in the same boat , I would suggest getting professional advise here.But i cant find anybody working in this area day in day out ....who can give practical advise ..
> 
> Please pass on any details if you find such a person.



What you are considering is called bankruptcy tourism, and the UK is the most common place where this takes place. 

As simply as I can put it, it involves moving to the UK, and setting up residence there for 3-6 months, before declaring yourself bankrupt which costs around £600 per person max (eg husband and wife). You need to show some sort of income eg benefits or employment and have a UK bank account, and utility bill set up within that time. You must prove that the new jurisdiction is now your centre of main interest (COMI). Within 12 months you should be in the clear completely. There are very few companies in Ireland who know how to do this.

w w w . f r o s t . i e


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## Ms2011

I've been working since I left school 14 years ago, I am not married and I have no children.  However through my taxes I have supported those who do have children, in some cases I have put their school clothes on their backs and a roof over their heads and now if I needed some help with crushing debt I would basically be told - you got yourself into this mess you get yourself out, hardly seems like a balanced, fair social system to me.  If the argument for not helping those in mortgage distress is 'if you can't afford it, you shouldn't had gotten it' well then by the same argument we should stop supporting anyone with children.
I am lucky, I bought in 2009 but I bought off my parents so while I do have some NE I can manage my mortgage each month, even if unemployed but many are not so lucky.
Can't people see that by not helping people with mortgage debt they are not helping Ireland move forward, they are just stalling this country in quick sand.


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## Gekko

David McWilliams talks about "the former elite" (e.g. teachers, journalists etc) who were somewhat left behind from an income and asset perspective during the boom.  In my view it's this constituency that's the principal source of pious ranting about "moral hazard".

A lot of people claim that they predicted our economic collapse.  They're generally bluffing.  If someone's not up to their neck in property related debt right now it's probably as a result of blind luck.

We're primarily a society rather than an economy and we should remember this.  If people are in serious financial difficulty and lying awake at night worrying about themselves and their families then society should try and help them.  I couldn't care less whether those same people used to go shopping in New York every November.

There are hundreds of thousands of people hiding away at home right now and buckling under unsustainable debt.  Until we get these people back out and doing "stuff", we're all fecked.  If people can't do compassion, they should do selfishness and realise that until we solve the problems of those in real trouble (for whatever reason), we can't solve our own problems.


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## Complainer

Gekko said:


> If someone's not up to their neck in property related debt right now it's probably as a result of blind luck.


So is it 'blind luck' that I chose not to invest in property, other than my family home?


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## Gekko

Complainer said:


> So is it 'blind luck' that I chose not to invest in property, other than my family home?


 
I've no idea when you purchased your family home.

If your age and timing issues mean you haven't been utterly devastated by the property collapse, that's blind luck.


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## Complainer

Gekko said:


> I've no idea when you purchased your family home.
> 
> If your age and timing issues mean you haven't been utterly devastated by the property collapse, that's blind luck.


The only people of my generation who have been 'utterly devasted by the property collapse' are the greedy ones.


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## Gekko

Complainer said:


> The only people of my generation who have been 'utterly devasted by the property collapse' are the greedy ones.


 
What about other generations?


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## csirl

frostie said:


> What you are considering is called bankruptcy tourism, and the UK is the most common place where this takes place.
> 
> As simply as I can put it, it involves moving to the UK, and setting up residence there for 3-6 months, before declaring yourself bankrupt which costs around £600 per person max (eg husband and wife). You need to show some sort of income eg benefits or employment and have a UK bank account, and utility bill set up within that time. You must prove that the new jurisdiction is now your centre of main interest (COMI). Within 12 months you should be in the clear completely. There are very few companies in Ireland who know how to do this.
> 
> w w w . f r o s t . i e


 
I'm not sure that this is as easy as suggested. If you move to UK for 3-6 months, you'll still be regarded as domiciled and tax resident in Ireland under Irish Law. While the UK may regard you as 'bankrupt', given that the Irish courts like to judge individual cases on their merits, its hard to imagine that this sort of thing would be looked on favourably and get someone off the hook in Ireland.


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## Complainer

Gekko said:


> What about other generations?


Your initial was fairly general and all-encompassing, i.e. "If someone's not up to their neck in property related debt right now". Would you like to revise this now?


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## Gekko

Complainer said:


> Your initial was fairly general and all-encompassing, i.e. "If someone's not up to their neck in property related debt right now". Would you like to revise this now?


 
Absolutely not.

Being of a vintage that makes one less likely to have been devastated by the property collapse is the epitomy of blind luck.

You should also have noted my deliberate use of the phrases "a lot", "generally" and "probably" to cover the exceptions that will almost always exist.


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## Complainer

Gekko said:


> Absolutely not.
> 
> Being of a vintage that makes one less likely to have been devastated by the property collapse is the epitomy of blind luck.
> 
> You should also have noted my deliberate use of the phrases "a lot", "generally" and "probably" to cover the exceptions that will almost always exist.


Fair enough - I'll consider your contributions on this thread to be inaccurate ranting so.


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## frostie

csirl said:


> I'm not sure that this is as easy as suggested. If you move to UK for 3-6 months, you'll still be regarded as domiciled and tax resident in Ireland under Irish Law. While the UK may regard you as 'bankrupt', given that the Irish courts like to judge individual cases on their merits, its hard to imagine that this sort of thing would be looked on favourably and get someone off the hook in Ireland.



You are right, it's not that easy, which is why people should get advice on this. Very difficult to fully outline the whole context in one post. You have to be resident in the UK for the 3-6 months before you can declare, but this involves moving lock, stock and barrel to the UK, including your family if applicable. Any assets in Ireland would still be accessible to the creditors, but this is not going to be a concern to the majority who will go down this route, because of negative equity, and the fact that the assets would form part of the bankruptcy.

You must also notify the Official Receiver in the UK if you intend to leave the UK for up to three years after the bankruptcy is entered, although you can leave the country depending on the outcome of the bankruptcy. 

There are terms associated with bankruptcy in the UK such as an income payments order for up to three years on any disposable income. It is not soemthing to be entered into lightly, but in the context of some of the earlier posts on this thread, where people are facing negative equity of 100k + it is definitely something to be considered, but ultimately it is a lifestyle change for a few years until the bankruptcy and any terms are discharged.

Irish courts have no jurisdiction on a bankruptcy declared and discharged in another state - proving your COMI is integral to show that you are now a taxable person in that jurisdiction. Depending on the individual merits of the case, a person may be able to return to Ireland in one year or less with the bankruptcy discharged, and as hard as it may be to imagine, no court or creditor in Ireland can do anything about it.#

It's a fairly common practice now, not only from Irish people going to the UK, German citizens would also do this in numbers, as would any country's citizens within the EU, where bankruptcy legislation in the respective country could be considered 'draconian'

w w w . f r o s t . i e


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## Gekko

Complainer said:


> Fair enough - I'll consider your contributions on this thread to be inaccurate ranting so.


 
Feel free to reach ludicrous conclusions if you so wish.

Be mindful though that it's relatively easy to show compassion for those less fortunate than you...those who bought their family homes at the peak of the boom.


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## Complainer

Gekko said:


> Be mindful though that it's relatively easy to show compassion for those less fortunate than you...those who bought their family homes at the peak of the boom.


My disagreement with you on a matter of fact has nothing to do with any compassion that I may or may not feel for "those who bought their family homes at the peak of the boom". If your claim had referred to "those who bought their family homes at the peak of the boom", it would have got a very different reaction from me.


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## Gekko

Gekko said:


> thousands of families
> 
> families who paid €400,000 for homes which are now virtually worthless.
> 
> I advocate full debt forgiveness for people unlucky enough to be in this situation


 


Gekko said:


> If someone's not up to their neck in property related debt right now it's probably as a result of blind luck


 


Complainer said:


> So is it 'blind luck' that I chose not to invest in property, other than my family home?


 


Complainer said:


> If your claim had referred to "those who bought their family homes at the peak of the boom", it would have got a very different reaction from me


 
As you can see from the above posts, I've always been referring to "home related debt".  It was you that alluded to more traditional property speculators.

Like it or not, historically we've had a culture of home ownership in this country.  Purely for chronological reasons, a large group of people have been devastated by the collapse in property prices.  Had they been a little older or a little younger, they wouldn't have been.  Luck has played a big part in this.  I won't get any help but I acknowledge that we should do something to help such people.  I agree that property speculators (e.g. people who invested in property other than their PPR) don't deserve similar levels of assistance.


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## orka

Gekko, what sort of help do you think should be given and to what categories of people?  

BTW, I don't agree that people who bought family homes at the height of the boom are the most in need of help.  Unless their income has changed drastically, the value of their home (and negative equity) shouldn't matter to them if its going to be their family home for 30-40 years.  It's those who bought shoebox apartments, possibly miles from work and family 'to get on the ladder',  and who now want to have a family (or have already had a baby or two) that I feel sorriest for.  (And indeed, the pyrite house purchasers you mention above).


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## csirl

frostie said:


> Irish courts have no jurisdiction on a bankruptcy declared and discharged in another state - proving your COMI is integral to show that you are now a taxable person in that jurisdiction. Depending on the individual merits of the case, a person may be able to return to Ireland in one year or less with the bankruptcy discharged, and as hard as it may be to imagine, no court or creditor in Ireland can do anything about it.#
> 
> It's a fairly common practice now, not only from Irish people going to the UK, German citizens would also do this in numbers, as would any country's citizens within the EU, where bankruptcy legislation in the respective country could be considered 'draconian'
> 
> w w w . f r o s t . i e


 
I'd be inclined to think that the Irish lender would probably proceed with their claim in the Irish courts and would probably obtain a default judgement (due to absence of the borrower) which would be enforced in Ireland, and abroad where possible, regardless of what the borrower did in the UK. I'm not sure that the law in the UK is clear cut enough that their bankruptcy applies to Irish debts incurred by a borrower who was permanently resident in Ireland at the time the debts occured. I'm fairly sure that you'd have to stay out of Ireland for a very very long time - essentially have to emigrate permanently with little chance of ever returning - which is a very high price to pay. And always with the risk that the Irish bank may decide to start proceedings in the UK if it feels that it would be worthwhile and that the bankruptcy rules were being abused.


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## Gekko

orka said:


> Gekko, what sort of help do you think should be given and to what categories of people?


 
This is the $64,000 (or perhaps €64 billion) question.

In my view, the "moral hazard" argument should be disregarded. It's just pious pseudo intellectual justification for doing nothing.

If debt is sustainable, nothing needs to be done (e.g. a family in negative equity with a suitable home and income capable of servicing the mortgage).

If debt is unsustainable, something has to be done (e.g. a family in negative equity with a suitable home and income incapable of servicing the mortgage). Perhaps the State or the lender should take ownership of a portion of the property up to a level at which the family's repayments would become sustainable?

If debt is causing other social issues (e.g. preventing people from starting families) then something should be done. Perhaps negative equity portability, NAMA financed property swaps, debt forgiveness or partial State or lender ownership should be considered?

The fact that the problem is difficult to deal with in an appropriate manner doesn't excuse avoiding it.

In my view some form of commercially minded quango should be established to identify the legitimate cases and deal with them.


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## frostie

csirl said:


> I'd be inclined to think that the Irish lender would probably proceed with their claim in the Irish courts and would probably obtain a default judgement (due to absence of the borrower) which would be enforced in Ireland, and abroad where possible, regardless of what the borrower did in the UK. I'm not sure that the law in the UK is clear cut enough that their bankruptcy applies to Irish debts incurred by a borrower who was permanently resident in Ireland at the time the debts occured. I'm fairly sure that you'd have to stay out of Ireland for a very very long time - essentially have to emigrate permanently with little chance of ever returning - which is a very high price to pay. And always with the risk that the Irish bank may decide to start proceedings in the UK if it feels that it would be worthwhile and that the bankruptcy rules were being abused.



It actually operates according to EU law, and it is happening on a regular basis. It is nothing new or theoretical, it's one thing getting a judgement, a bankruptcy is something completely different. Because of the legislative differences relating to the discharge of a bankrupt in both jurisdictions, it is easy to get the wires crossed about how the bankrupt is actually discharged. Every aspect of the law in the UK relating to bankruptcy is more relaxed than in Ireland, which is why bankruptcy tourism is so appealing. If it were the other way around, you would be right about the difficulties due to the term of bankruptcy, and conditions of discharge in Ireland.


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## Raskolnikov

Pope John 11 said:


> Yes THEY borrowed the money to purchase the property and THE BANK lent the money to the borrower.


Yep, people seem to forget this. The bank took a risk with their capital to lend money to people with the expectation of a profitable return. If the banks exercises poor judgment, they should shoulder the losses. This is how the banking system has always worked.


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## Complainer

Gekko said:


> As you can see from the above posts, I've always been referring to "home related debt".  It was you that alluded to more traditional property speculators.


It was quite unclear to me that your claim related to home-related debt over a limited time period, as opposed to the broad general nature of your claim as you wrote it.


Gekko said:


> Like it or not, historically we've had a culture of home ownership in  this country.  Purely for chronological reasons, a large group of people  have been devastated by the collapse in property prices.  Had they been  a little older or a little younger, they wouldn't have been.  Luck has  played a big part in this.  I won't get any help but I acknowledge that  we should do something to help such people.  I agree that property  speculators (e.g. people who invested in property other than their PPR)  don't deserve similar levels of assistance.


You are overplaying the 'luck' factor. I know of two young couple who purchased property during the boom years and are now in negative equity - one an apartment and one a duplex. Both took a fairly cautious approach - one guy specifically said to me that they chose a property that they could still continue to pay the mortgage of one or other lost their job or had to give up work for family reasons. Both are continuing their lives without any 'utter devestation'. The apartment owner have rented their apartment out to Dublin City Council under the RAS scheme while renting another property for themselves and planning a self-build. The townhouse owners are continuing to pay their -ve equity mortgage without any major difficulty.

It's not just about luck - those who were cautious have minimised the impact of the property crash for themselves.


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## JoeB

It's our government to blame, in my opinion.

Of course the banks displayed incredibly poor judgement, in relation to mortgages. (But they did sell their own property, didn't they, and lease it back?). So of course the banks should have gone bust, and been allowed to do so. ragardless of the consequences.

But the banks were facialited by the Fin. Reg. who was asleep at his post. He is part of the government, so ultimatally the blame lies at Fianna Fail's door. (They even have 'fail' in their name!)



Of course private banks will break the law if allowed to do so. But they haven't broken laws,.. they broke guidelines. The governments fault again, that they issued guidelines, instead of laws. (Is a single person in prison for financial mismanagement?)


The government failed again by bailing out the banks.. they should have taken a stronger stance and allowed the banks to fail, even if that destroyed out economy (in the short term). (they could have created a credible government bank, as opposed to zombie banks dragging it out for years)


Now we have a situation where everybody wants to be bailed out, and those who were cautious don't want to pay any more taxes to see them wasted. The balck economy is rampant.. as our government appears incompetent, and so what's the point in paying taxes to semi-criminals, who will either waste it, or enrich themselves? (That's an opinion)


The country is destroyed, and I'd happily cede sovereignty to the Germans, .. at least we'd be rid of the Healey Rays and their ilk. 

I'd also happily cede soveriegnity to a monkey throwing darts at policy documents hung on the wall by civil servents. Why don't we try the dart throwing monkey approach?, could it be worse?


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## Steve Thatcher

*The bankruptcy option*

Hello I am new to your forum. I am a UK based debt advisor, who now spends a fair bit of his time helping Irish citizens understand out English bankruptcy laws. If anyone has any questions I am happy to give you free advice. There is much confusion about how a UK bankrupcty affects you in Eire, I will try to post relevent replies on the threads that I can pick out.


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## Steve Thatcher

ontheedge said:


> Im in the same boat , I would suggest getting professional advise here.But i cant find anybody working in this area day in day out ....who can give practical advise ..
> 
> Please pass on any details if you find such a person.


 
Hello on the edge. I am happy to give you and anybody else some free advice if it would help you.

Steve


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## jackbetal

Gekko said:


> I agree that property speculators (e.g. people who
> invested in property other than their PPR) don't deserve similar levels of
> assistance.


Whilst the majority of what you say I agree with I cannot agree with
this. You cannot have a blanket ruling where by it is PPR's only. I have no
doubt that the majority of those who did purchase a second property did so
for pension purposes only. Just because begrudgers like this lad
"Complainer" want to create this false impression of that groups as greedy
big car driving, 6 holiday a tear type of gluten then no need for you to
follow. Even if you do want to do it for PPrs only how do you sort out the
situation where the people with additional properties have them stacked up
against their PPRs?



Complainer said:


> I know of two young couple who purchased property during the boom years and
> are now in negative equity - one an apartment and one a duplex. Both took a
> fairly cautious approach - one guy specifically said to me that they chose
> a property that they could still continue to pay the mortgage of one or
> other lost their job or had to give up work for family reasons. Both are
> continuing their lives without any 'utter devestation'. The apartment owner
> have rented their apartment out to Dublin City Council under the RAS scheme
> while renting another property for themselves and planning a self-build.
> The townhouse owners are continuing to pay their -ve equity mortgage
> without any major difficulty.
> 
> It's not just about luck - those who were cautious have minimised the
> impact of the property crash for themselves.



And you base your whole opinion on knowing "two young people". It is nice
that the frugality of these two young people have saved them somewhat from
the wrath of this corruptly caused Irish recession. But I am full sure that
they were not being careful in case the Irish economy totally collapsed due
to incompetence and corruption.




JoeBallantin said:


> It's our government to blame, in my opinion.
> 
> Of course the banks displayed incredibly poor judgement, in relation to
> mortgages. (But they did sell their own property, didn't they, and lease it
> back?). So of course the banks should have gone bust, and been allowed to
> do so. ragardless of the consequences.
> 
> But the banks were facialited by the Fin. Reg. who was asleep at his post.
> He is part of the government, so ultimatally the blame lies at Fianna
> Fail's door. (They even have 'fail' in their name!)
> 
> 
> 
> Of course private banks will break the law if allowed to do so. But they
> haven't broken laws,.. they broke guidelines. The governments fault again,
> that they issued guidelines, instead of laws. (Is a single person in prison
> for financial mismanagement?)
> 
> 
> The government failed again by bailing out the banks.. they should have
> taken a stronger stance and allowed the banks to fail, even if that
> destroyed out economy (in the short term). (they could have created a
> credible government bank, as opposed to zombie banks dragging it out for
> years)
> 
> 
> Now we have a situation where everybody wants to be bailed out, and those
> who were cautious don't want to pay any more taxes to see them wasted. The
> balck economy is rampant.. as our government appears incompetent, and so
> what's the point in paying taxes to semi-criminals, who will either waste
> it, or enrich themselves? (That's an opinion)
> 
> 
> The country is destroyed, and I'd happily cede sovereignty to the
> Germans, .. at least we'd be rid of the Healey Rays and their ilk.
> 
> I'd also happily cede soveriegnity to a monkey throwing darts at policy
> documents hung on the wall by civil servents. Why don't we try the dart
> throwing monkey approach?, could it be worse?



A lot of reality spoken here. Pity you will be labelled a left wing nut by
the begrudgers in this country. As ceding sovereignty to the dart playing
monkey though I don't know. I thought that is what we had all along.


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## RabHab

*Another way?*

Hi all,

Sorry im reading this post late. I also find myself in a similar situation to many of you. I was young and naive but worst of all was allowed to buy a house which i simply should not have been given a mortgage for. Yes i now find myself in negative equity on an interest only tracker.

I did read a book recently called "Blank of Ireland this way out" and although it seems a little mad there may be something in it. It may offer another way for people who find themselves in a situation so bad that there doesnt seem to be any other oprion. If you type the book into google you can read it online for free. It seems that the same people who wrote the book are also doing a tour (freedom bus tour i think) which is currently travelling around Ireland offering people free advice and solutions. Might be woth giving it a go.

I think if enough of us stand up against this injustice the gov will have no choice but to listen. After all this is meant to be a democracy and if so we have the power!


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## Bronte

Steve Thatcher said:


> Hello on the edge. I am happy to give you and anybody else some free advice if it would help you.
> 
> Steve


 
Hi Steve, do you belong to one  of those UK based debt consolidation or debt dealing agencies?


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## Steve Thatcher

Bronte said:


> Hi Steve, do you belong to one of those UK based debt consolidation or debt dealing agencies?


 
I am a qualified solicitor, but I no longer practice. I did twenty years in law firms before I set up my own debt advice agency. I spend my working time taking people through the bankrupcty process here in England.

[broken link removed]


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## Bronte

Thanks Steve.

Have you helped Irish people through bankruptcy?  How much do you charge.  There is nothing free.  Is it a percentage?  Or a set fee.  

(you obviously don't have to answer my questions if you don't wish to)


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