# Is Insolvency the only option in mortgage debt write off?



## loudrip1 (27 Apr 2016)

I am unemployed, on social welfare, legally separated with no assets. My mortgage for the family home, which has been unoccupied since 2012 was with Ulster Bank and now is being dealt with by Cabot Financial. The mortgage was solely in my name and also the deeds so the responsibility of dealing with it are mine solely. I have had no response from Cabot to two letters send by my Solicitor (one in Nov 2015 and one in Jan 2016) stating my financial situation and enclosing a letter to say I am on a social housing list, looking for debt write off and to proceed with agreed sale on the property. After the sale of the house the debt would be 100,000 euros. So I am considering going down the Insolvency route and have spoken to a PIP advisor. As it seems to progress with this and get a reply from Cabot it is the only option. This is going to cost me 2,000 euros to employ the PIP and I have been advised that I need to offer 5% minimum of the debt to secure a deal on debt write off with Cabot. This is a worry as I don't have the money but could be raised through family help. Would like to get a view from this forum if this seems like the best thing to do or is there anything else I should be aware of in this situation?


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## TLO (27 Apr 2016)

Hi Loudrip1

Your negotiating position is stronger than you think because you have so little, if anything, to lose.  A possible approach is to ask your solicitor to forward your Standard Financial Statement to Cabot Financial and Ulster Bank and inform them that there are only two ways that this is going to get resolved:

1)  A voluntary sale in exchange for a full write-off of the shortfall.
2)  You go bankrupt.

Bankruptcy will cost you €270 in court fees and the Irish Mortgage Holders Organisation will help you prepare the paperwork for free.   After 1 year you are discharged and debt-free.  The family home becomes the responsibility of Ulster Bank and the Official Assignee to sort out, you don't have to worry about it.   Even though it will cost Ulster Bank about €6,000 in legal fees to get a court order allowing for the property sale, your bankruptcy makes it their problem, not yours.  

There are instances where paying €2,000 to a PIP is money well spent, but not this time.  And your relatives should keep their €5,000.


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## loudrip1 (27 Apr 2016)

Hi TLO, 

Thankyou! I'm so appreciative of your advise. I had no idea of this as an option. And it makes sense. I literally have nothing and wa thinking this insolvency is going to cost me money I don't have and I'm trying to survive as a single Mom when at the end of the day when the property is sold Cabot will still make money on my debt presuming they have paid 10-25% of the mortgage from Ulster Bank (UB). UB have send me a interest statement with a zero value on the balance owed and the mortgage has been redeemed as I got a pay back of €69 because of over payment on the redemption! Cabot have not answered letters to date from my Solicitor but I'm presuming they have bought the mortgage from UB. A voluntary sale I agree with and there are people interested in buying. As Cabot are not engaging so far, should I sort out my bankruptcy application first and then contact them? As my Solicitor has already asked for debt write off with a voluntary sale.


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## loudrip1 (2 Jul 2016)

Hi TLO, 

I am writing to tell you that your advise worked, it's taken a couple of months but yesterday I got the call from my Solicitor that Cabot are willing to write off the debt for a voluntary sale.  And I have a buyer who has been waiting in the wings for this for over a year so it will soon be resolved. Thank you again.


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## Brendan Burgess (4 Jul 2016)

Great news. Make sure to get it in writing before the sale goes through


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## loudrip1 (7 Jul 2016)

Brendan Burgess said:


> Great news. Make sure to get it in writing before the sale goes through


Thanks again, good advice


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## loudrip1 (14 Feb 2017)

Dear Brendan.  

It has been over 7 months now since Cabot said they would write off my debt for a voluntary sale.  And having followed your advise re getting it in writing, I have still not got written confirmation.  In this time they asked for a sales offer which I secured.  And since then there has been delays with further requests.  They asked to do another evaluation of the property, which was done in December 2016.  In January they asked for another SFS and 6 months bank account statement because what they had was 3 months old.  They have received this over 4 weeks ago.  Despite my Solicitor sending them reminders, they have yet to respond.  We are unable to progress with a sale until we get the debt write off in writing.  It is frustrating how much time they are taking to bring it to conclusion.  And very difficult to keep easing the buyers mind that it will work out.


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## TLO (14 Feb 2017)

Hi Loudrip1

Solicitors love writing letters but sometimes a bit of verbal back and forth is needed to get things over the line.  It might be worth asking your solicitor to telephone Cabot and ask to speak to your "Case Manager".  Your solicitor could ask what Cabot's view of the situation is, and maybe mention that the buyer is getting frustrated, and might pull out, and if this happens, you might, out of sheer exhaustion, petition for your own bankruptcy, and then Cabot would have to deal with the property themselves, and what do we need to do to move this along?


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## loudrip1 (20 Feb 2017)

Thanks Brendan.  

I received a letter this morning from Cabot.  And it appears that they are not going to write off the debt, which is what I was waiting for in a Consent to Sale Agreement.

This is how the, 'Conditions of Sale' reads:

- Upon receipt of the Sale Price less costs associated wit the exercise, enforcement and sale of the Property (the 'Net Sale Proceeds"), the Bank agrees to release the security it holds over the property
-The Bank will only release the property which is held as security in respect of the mortgage, by way of Deed of Discharge/Release.  The Bank will not be vacating the Mortgage Deed until such time as the Shortfall is discharged in full
-An up to date correspondence addresses is required, see overleaf

It seems that the only way to go is to petition for my own bankruptcy now, what do yo think?


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## Catastrophe (21 Feb 2017)

I don't know if you have engaged a PIP, however if I were you I would make a call to IMHO.

As an aside, I personally cannot understand their actions because if you hit the nucleur button, (bankruptcy), they will get nothing anyway.
Good luck.


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## dub_nerd (11 Mar 2017)

It sounds like Cabot have strung the OP along. If she had pressed the nuclear button on day one she would be nearly exiting bankruptcy now. They clearly don't give a fiddler's about her situation and she should respond in kind -- tell them they have a week before bankruptcy gets filed.


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## Brendan Burgess (12 Mar 2017)

loudrip1 said:


> I am unemployed, on social welfare, legally separated with no assets.



So why not agree to their terms? Sell the house and go bankrupt?

Just before going bankrupt, ask for a instant PIA which writes off the shortfall and any other debts. If they refuse, just go bankrupt.

Brendan


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## newtothis (12 Mar 2017)

dub_nerd said:


> It sounds like Cabot have strung the OP along. If she had pressed the nuclear button on day one she would be nearly exiting bankruptcy now. They clearly don't give a fiddler's about her situation and she should respond in kind -- tell them they have a week before bankruptcy gets filed.



I'd agree with this. I'd also question the advice you've been getting from your solicitor, who presumably has been charging you cash you can ill-afford each time they have written to Cabot. You sound more than capable of writing to them yourself, though it would be beneficial as others have suggested to get further help and advice from wherever you can get it.


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## loudrip1 (15 Mar 2017)

Thanks for others you have commented on my thread here.  It is all getting very frustrating.  Yes Cabot have strung me along, a long time now too, and at every step one would think you are nearly there only to be strung along again for another month.  It is very hard to understand why, inefficiency? trying to make it hard for anyone to write of debt so a as not to make a precedent of it? down right don't care about people, full stop?  

On the positive side as buyers come and go, I still will have no problem securing a buyer as there is alot of on going interest.  My Solicitor has been my Solicitor for over two years on this Conveyance matter and as yet hasn't charged me a penny.  They are now dealing with one person on the matter which has been an achievement in itself to get one person to talk to in Cabot.  They said the letter I received (February 20th) was a mistake, standard letter that gets send out and they are in the process of re-wording a letter to get the debt write off included.  Yet to be received.


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## loudrip1 (3 Apr 2017)

I got to speak to the person in Cabot last week myself who explained to me that the sentence in the letter from them that reads as follows: 

"The Bank will only release the property which is held as security in respect of the mortgage, by way of Deed of Discharge/Release. The Bank will not be vacating the Mortgage Deed until such time as the Shortfall is discharged in full "

can't be removed, but this does not mean my debt wouldn't be written off.  They was a hold up as they were awaiting a letter from Ulster Bank, an addendum to this letter, stating the residual debt after the sale would be written off.

Within a few days I received written confirmation of debt write off in a letter from Ulster Bank.  It has stated that 'after the sale of your home, we will not pursue for the residual debt'.   The all important line that I was looking for, but we now have two letters, one from Cabot and one from Ulster Bank.  And my Solicitor says this is the first time she has seen it done like this, that usually a consent letter says it accepts so much in full and final settlement??


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