# In Arrears with bank loans



## mchugh2008 (1 Apr 2009)

I have a mortgage on a property in Ireland and have other borrowings which are all in arrears now. I spoke to the bank prior to my situation worsing and asked them for a period of interest only on all borrowings. They refused without any explanation. Most of my borrowings are for property abroad. The borrowings abroad have been used to purchase property through Special Purpose Vehicles (stand alone companies) of which I am a shareholder. What can the Irish banks do in my situation. Can they repossess the Irish property, can they lock on to my shareholding in the SPV's. I need to understand the precedence and the powers of Irish banks on foreign assets and shareholdings. I'm sure this is the same for many Irish who have foreign property. Any advise would be greatful


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## UptheDeise (1 Apr 2009)

Hi McHugh2008, I don't mean to be rude but how did you manage to get yourself into this situation without knowing all the ins and outs before you jumped? Anyway, the best thing you can do is go and talk to someone from the Money advice Budgeting service. 

http://www.mabs.ie/


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## Mr DT (1 Apr 2009)

It looks like you have some serious problems to deal with. Don't hide your head in the sand, get profession advice, don't delay.

The longer you leave this mess the worst it is going to get.


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## mchugh2008 (1 Apr 2009)

Thanks for the advice. I am really trying to sort things out quickly but when you have a bank that wont work with you its very difficult. I was willing to pay interest only for a period but the bank refused. One would have thought that paying something is better than not paying anything at all. Doesnt seem to be the way Irish banks think though. Any ideas how banks proceed with repossessing shareholdings in companies abroad and how long it takes. Any precedence cases that you are aware of?


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## Setanta12 (1 Apr 2009)

I think it might be useful for others here if you posted up more details re yourself, these SPVs and the relevant countries in which you've invested, %/euro shortfall etc.

(see Moneymaker Over section)


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## Complainer (1 Apr 2009)

UptheDeise said:


> Hi McHugh2008, I don't mean to be rude but how did you manage to get yourself into this situation without knowing all the ins and outs before you jumped? Anyway, the best thing you can do is go and talk to someone from the Money advice Budgeting service.
> 
> http://www.mabs.ie/


I don't think it is MABS role to sort out foreign property investments. MABS is about helping people to keep food on the table and a roof over their own (not their tenants) heads.


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## mchugh2008 (2 Apr 2009)

Maybe it is MABS I need to speak to because soon it maybe that my family and I wont have a roof over our heads.

UptheDeise, thanks for the advice. Regarding your question about how I got into this mess, I suppose I'm no different to most working class irish people, I did what most people did, looked at investing, got handed money from banks easily and now with the crisis hitting so hard, it is just impossible to meet (capital and interest) payments right now and the banks that were so willing to get money out the door, now dont want to know and dont even want to give people like me breathing space. I really dont know what their intentions are because soon a large proportion of Irish properies will be repossessed by banks it seems and what happens then? Do banks start to collapse having repossessed such a large stock of overvalued property and who then takes over the banks assets thereafter...foreign banks and then where does it go from there. I just can't understand the thought process of the banks...I want to pay money to them (interest only) but they wont accept, they want capital and interest and I just cant afford it right now...it just amazes me. I am certainly not refusing to pay but I need time to get things sorted.


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## Bronte (2 Apr 2009)

If you owe the banks they will certainly come after you for the Irish property.  As you haven't really clarified the foreign property ownership it's more difficult to say.  If you said you had something in Zimbabwe I'd say the Irish bank wouldn't bother but if it was the UK they will go after it.  The kind of ownership you have is very specialist, I don't think Mabs would be able to advise on this but it might help you in dealing with the Irish lender.  As previous poster stated can you give us more details so that you can get better advice.


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## mchugh2008 (2 Apr 2009)

Thanks Bronte. The countries where I have invested through SPV's are France, Spain and Eastern Europe. I dont have any assets in the UK. The Irish property has dropped in value by at least 30%, so the current value is at least 30% less than what I borrowed in the first instance therefore the bank wont even get back what I borrowed for the irish property. I just wonder why they wont work with me and at least take interest only. Seems crazy.
Are you aware of any precedence of Irish Banks locking on to foreign property in the above mentioned countries. Are you aware of any situations where Irish banks can lock onto foreign property shareholdings? The borrowings are all unsecured apart from the Irish property.


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## mchugh2008 (6 Apr 2009)

Any feedback to my concerns above??


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## Setanta12 (6 Apr 2009)

I think we're all looking for more information - we cannot advise with what you've posted.


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## mchugh2008 (6 Apr 2009)

What info are you looking for?


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## Bronte (7 Apr 2009)

What exactly do you own, what is it's value, where is it, what interest rate are you paying, how much do you owe, who do you owe the money to......................


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## Sunny (7 Apr 2009)

Bronte said:


> What exactly do you own, what is it's value, where is it, what interest rate are you paying, how much do you owe, who do you owe the money to......................


 
Thats got nothing to do with original query. Thats just nosiness! He wants to know if Irish banks can latch on to his foreign assets on the back of unsecured loans. The simple answer is that they can't without getting a court judgement against you but once that judgement is obtained, they can force you to liquidate or seize assets. No idea how long a legal process that would be. Obviously they can take the Irish property where there is a loan secured against it. How long this takes depends on the lender.  
No lender that I know of will let you go interest only on unsecured borrowing so its no surprise that they refused you.

I am not sure what sort of structure you have invested in but it sounds similar to a property fund. Is there any way you can liquidate your share even if you have to realise a loss and begin to pay down your debt.
To be honest, it is unlikely the Irish Banks can seize any actual property abroad as it sounds like the SPV owns the property, not you. They can go after your shareholding in the fund/spv though (and all your other assets). 

You really do need to get proper legal and financial advice.


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## mchugh2008 (7 Apr 2009)

Sunny, thanks a million for your direct response. I agree with your comments and advise. 
Yes, I really need to get good advice but as I haven't lived in Ireland for the last 8 years, I'm not too sure who I could talk to regarding these matter. Is there anyone who could be recommended and who is versed in this area. 

Much appreciated advice.


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## mchugh2008 (7 Apr 2009)

Bronte, why are you looking for such information? I dont really have difficulty in giving more information but I really need to understand the relevancy of it? Please explain.


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## Guest116 (9 Apr 2009)

posted to wrong post


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## mchugh2008 (9 Apr 2009)

Aristotle25, not sure what you mean. Have I posted it to the wrong post. Please advise if I have. New to forums


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## Hybrid Boss (26 May 2009)

Sounds like to me you are looking to defraud an Irish bank & are trying to research as much information as you can.


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## mchugh2008 (28 May 2009)

No, not at all..I want to work with the banks but the banks are unwilling to work with us. We have offered various payment methods but the bank are only willing to accept their terms and we cant meet these terms right now. So if anything, the Irish banks are defaulting on their customers and putting us into very difficult / bankrupcy positions. As I'm sure you will agree, no one wins, and now especially the people of Ireland who are going to take on all this debt...its an absolutely disgraceful position for the banks to take...its obvious that the bank decision maker have absolutely no understanding of their actions and the impact on the country...mark my words. The sooner the government clears out the bank decision makers and recruit professional business executives, the better.It obvious the banks are rotting with poor and bad management.


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## Bronte (29 May 2009)

I fail to see how a change of bank management will help you in your non payment of your obligations?


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## mchugh2008 (29 May 2009)

Its obvious you dont understand how the banks have worked and are working to sort out the financial situation. In business you work with people and give a little / take a little. The banks in this country headed by weak incapable management have absolutely no idea how to solve the financial crisis hence a change in management. I dont know if you are in business yourself or an entrepreneur, so you may not fully understand the bank procedures and the position they are taking...its certainly not good for irish business and for the irish people. Remember its the banks that have got us all into this situation and now they are not capable of getting us out of it. As for non-payment, you dont seem to understand my position which I have explained above. I have and am not refusing to pay. Simply I need the terms to be slightly changed so that I can pay but the banks are not being flexible and at the end of the day, you can't get blood from a stone. I only hope they will come to their senses soon.


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## Mpsox (29 May 2009)

mchugh2008 said:


> Maybe it is MABS I need to speak to because soon it maybe that my family and I wont have a roof over our heads.
> 
> UptheDeise, thanks for the advice. Regarding your question about how I got into this mess, I suppose I'm no different to most working class irish people, I did what most people did, looked at investing, got handed money from banks easily and now with the crisis hitting so hard, it is just impossible to meet (capital and interest) payments right now and the banks that were so willing to get money out the door, now dont want to know and dont even want to give people like me breathing space. I really dont know what their intentions are because soon a large proportion of Irish properies will be repossessed by banks it seems and what happens then? Do banks start to collapse having repossessed such a large stock of overvalued property and who then takes over the banks assets thereafter...foreign banks and then where does it go from there. I just can't understand the thought process of the banks...I want to pay money to them (interest only) but they wont accept, they want capital and interest and I just cant afford it right now...it just amazes me. I am certainly not refusing to pay but I need time to get things sorted.


 
The banks are under no obligaiton to accept interest only payments as I am sure you are aware of. Will time fix your problems? Have you gone into the bank with a plan of action showing how if you pay interest only say for 12 months, that you can dig yourself out of this.? Or is it simply a case that your hoping that things will pick up in the next couple of years. I'm assuming by the way that these are buy to let properties rather then properties you were planning on flipping for a capital gain. 

Problem the bank faces is that the liklihood is that the asset that is used to secure the loan(ie the property overseas) will be worth less in 12/24months times then what it currently is. Therefore unless you are presenting a strong plan to rectify your situation, why should they take that risk?. It may be the best option for them now to cut their losses then settle for less down the line


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## so-crates (2 Jun 2009)

mchugh2008 said:


> I have a mortgage on a property in Ireland and have other borrowings which are all in arrears now. I spoke to the bank prior to my situation worsing and asked them for a period of interest only on all borrowings. They refused without any explanation. Most of my borrowings are for property abroad. The borrowings abroad have been used to purchase property through Special Purpose Vehicles (stand alone companies) of which I am a shareholder. What can the Irish banks do in my situation. Can they repossess the Irish property, can they lock on to my shareholding in the SPV's. I need to understand the precedence and the powers of Irish banks on foreign assets and shareholdings. I'm sure this is the same for many Irish who have foreign property. Any advise would be greatful


 
Just to check, you have 
- a mortgage (s?) on an Irish property (properties?) in arrears
- unsecured other borrowings from Irish banks in arrears used to buy property abroad?
- unsecured? or secured? borrowings abroad?

I think Sunny has answered your specific question regarding banks repossessing foreign assets. But I am not sure what your borrowed profile is. From above is sounds initially as if you have sizeable borrowings from Irish banks, unsecured and used to buy into foreign property via SPVs? But then you refer to borrowings abroad - so I am unsure as to whether you have money borrowed abroad as well. 
Is there a specific debt that you are worried about? Is it a case of you are worried about losing your home because of your unsecured borrowings or losing your foreign assets on the unsecured borrowings?



mchugh2008 said:


> ...Regarding your question about how I got into this mess, I suppose I'm no different to most working class irish people, I did what most people did, looked at investing, got handed money from banks easily and now with the crisis hitting so hard, it is just impossible to meet (capital and interest) payments right now and the banks that were so willing to get money out the door, now dont want to know and dont even want to give people like me breathing space. I really dont know what their intentions are because soon a large proportion of Irish properies will be repossessed by banks it seems and what happens then? Do banks start to collapse having repossessed such a large stock of overvalued property and who then takes over the banks assets thereafter...foreign banks and then where does it go from there. I just can't understand the thought process of the banks...I want to pay money to them (interest only) but they wont accept, they want capital and interest and I just cant afford it right now...it just amazes me. I am certainly not refusing to pay but I need time to get things sorted.


 
On what loans did you look for interest only repayments? On the Irish mortgage only or on unsecured debt? What did you put together as a potential time line for repaying the capital? Did you have a business plan indicating how your approach to your business (because this is or ought to be a business)? 
I must say I disagree with your assessment to some extent. I don't think anyone can deny that the banks have been foolishly "generous" in their disbursement of cash to all-comers (or near enough) but essentially we have a duty of care to ourselves to ensure that we do not borrow well beyond our long term ability to repay. Their business is to sell loans, it is their bread and butter and they have been very good at that. Too good, some would say, but we have to be good at our own business. Plenty of people didn't engage in leveraged speculation, most just borrowed for their own home, even if that was overpriced. I doubt that a "large proportion" of Irish properties will be repossessed, larger perhaps but it isn't likely to suddenly be 50% repossession rate.



mchugh2008 said:


> Sunny, thanks a million for your direct response. I agree with your comments and advise.
> Yes, I really need to get good advice but as I haven't lived in Ireland for the last 8 years, I'm not too sure who I could talk to regarding these matter. Is there anyone who could be recommended and who is versed in this area.
> 
> Much appreciated advice.


 
I think perhaps you need to start with your solicitor and a good accountant. They may be able to point you towards a specialist in this area. 



mchugh2008 said:


> No, not at all..I want to work with the banks but the banks are unwilling to work with us. We have offered various payment methods but the bank are only willing to accept their terms and we cant meet these terms right now. So if anything, the Irish banks are defaulting on their customers and putting us into very difficult / bankrupcy positions. As I'm sure you will agree, no one wins, and now especially the people of Ireland who are going to take on all this debt...its an absolutely disgraceful position for the banks to take...its obvious that the bank decision maker have absolutely no understanding of their actions and the impact on the country...mark my words. The sooner the government clears out the bank decision makers and recruit professional business executives, the better.It obvious the banks are rotting with poor and bad management.


 


mchugh2008 said:


> Its obvious you dont understand how the banks have worked and are working to sort out the financial situation. In business you work with people and give a little / take a little. The banks in this country headed by weak incapable management have absolutely no idea how to solve the financial crisis hence a change in management. I dont know if you are in business yourself or an entrepreneur, so you may not fully understand the bank procedures and the position they are taking...its certainly not good for irish business and for the irish people. Remember its the banks that have got us all into this situation and now they are not capable of getting us out of it. As for non-payment, you dont seem to understand my position which I have explained above. I have and am not refusing to pay. Simply I need the terms to be slightly changed so that I can pay but the banks are not being flexible and at the end of the day, you can't get blood from a stone. I only hope they will come to their senses soon.


 
Okay, I am going to say it, your posts strike me in a few ways. Firstly you seem to blame the banks for your position. You refer to their practices but do not acknowledge the part played by yourself. You seem to refer to yourself as almost an ingenue being led up the garden path by the suave bank. You responses are also quite hostile and dismissive where someone has questioned your actions or viewpoint in this. I appreciate that you are stressed and angry and from your perspective it will add very little value to go into the details. I'd tend to agree, your question was quite specific (if a bit confusing). The answer has been given. But nonetheless I think telling people they don't know what they are talking about as a response to a question that someone has taken the time to think about is a bit rude. 
Secondly you say "the terms to be slightly changed" in reference to going from full repayments to interest only repayments. What you are doing there (and elsewhere through your posts) is attempting to talk down and minimise the significance of the change you are looking for. You are choosing to view it as a minor adjustment for them because it is convenient for you. In reality, especially for unsecured loans, it is a significant change to your repayment terms. Even in the "good times" there would have had to have been a reason for you to do that on a secured debt and little or no chance of doing so on an unsecured debt. Unless you are willing to understand their position and argue from there you aren't going to win. Lambasting the current management and railing against the past behaviour of your loan providers will do no good. New management in the banks will not look any more kindly on your position.
The third thing is that from your posts I am guessing you are saying that you can afford interest-only repayments on all of your debts? Will this continue to be the case over the medium term? Will you be stretched to meet that? At which point do you envisage that changing? Are you at the mercy of interest rate changes?


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